The market chopped around in a very narrow range on Thursday, but there was again a very big down move in the USD threatening to break below major support which could trigger an avalanche of dollar selling.
Declining dollar is very bearish for the US equity market because it will eventually trigger capital outflow from the US dollar denominated assets and into other markets denominated in other currencies. If so, look for the stock market to collapse.
However, the Fed will not allow the dollar to tank so look for the Fed to talk about raising rates again in order to stop the dollar decline. Whether or not that would stop the dollar decline, only time will tell.
Key inflection price level for NQ on Friday will be 4805.
-- Trading above 4805 implies NQ is either going to trade sideways or rally up to above recent high. However, unless the US dollar decline can take a pause look for buy programs to struggle against an avalanche of selling.
-- Trading below 4805 has the potential to attract selling. However, because Friday tends to be choppy, look for buyers to come in at supports, which are 4790, 4770 and 4745.
