The stock market sold off hard after the released of the FOMC policy decision on Wednesday. The panicked Fed took advantage of Facebook better than expected earning reports to trigger massive buy programs to push the market up.
Whether or not the buy programs will continue into Thursday, we just have to wait. But the forces of deflation continues to accelerate, tanking market all over the world.
Key support level for NQ on Thursday will be 4100
-- Trading above 4100 should keep short sellers in check, key resistance is again 4190-4200.
-- Trading below 4100 is likely to trigger another round of sell programs, first support zone is 4040-4050, then 3900.
Here is the weekly chart of high yield bond index compared to the S&P 500. Notice that since the end of 2011, the HYG has been leading the stock market to the upside, then from mid 2015 the high yield bond index has been leading the market to the downside, indicating that the bear market may starts to accelerates to the downside.
