Against intensifying deflationary forces the equity market simply traded sideways on Thursday as central banks were unable to push the market higher ahead of the employment report on Friday.
Whatever the report may be, the Fed would have to make some kind of announcement regarding monetary easing very soon before the USD breaks out of resistance. A USD break above resistance is bearish for the stock market and could unleash selling that would overrun central banks buy programs.
NQ key support for Friday will be 4435 and NQ would need to stay above 4435 in order to keep sellers at bay, and may even trigger some end of the week short-covering activities.
Trading below 4435 is an indication NQ is potentially going into a larger pullback down move. Next support is back at 4400.
Deflationary forces created by negative interest rates is killing all the major banks, with many on the verge of bankruptcy as their stock price continue to drop. Below is a chart showing banks share price decline over the last 16 years, from the year 2000 to now.
