A narrow-range down day for NQ on Monday, closing right at 4350 key support, setting up a potential opening gap-down day on Tuesday, unless of course they can keep NQ above 4350 by the opening bell on Tuesday.
With the forces of global deflation intensifying, the Fed and other major central banks are fighting a losing battle. On Monday, Moody's downgrades Deutsche banks rating to just above junk. the bank is fast approaching bankruptcy stage, the impact could be very devastating to global financial system because Deutsche bank is one of the biggest holder of derivatives, which will implode in a case of the bank insolvency.
On an intraday timeframe, key price level for NQ on Tuesday will be 4350.
-- Shorts will be kept in check above 4350, implies a consolidation or a rally day.
-- A selloff could occur with NQ trading below 4350, next support is 4330 then of course the well defended 4300 price zone.
On a longer term time frame, the S&P 500 is now at key inflection price zone. A selloff from current price level could trigger the dreaded death cross, a cross under of the 50-ma below 100-ma on the weekly chart.
This “statistically significant” death cross has only happened twice is the past two decades, The first took place in 2001 and was followed by a 37 percent decline in the index, while the second pattern occurred in 2008 and preceded a 48 percent drop.
