With the Fed policy now totally cornered and not knowing what to do next, the best they could do on Friday at the start of Jackson Hole retreat, was to issue confusing and contradictory statement with Janet Yelling talking about broadening asset purchase programs (QE) and then had Fed Vice Chairman Stanley Fisher to talk about interest rate hike.
On Friday the market reacted by selling off hard, then panic Fed aggressively bought the market to stop the market from crashing. With the fed policy stuck between a rock and hard place, the stage is set for wild market swings, until the Fed can provide firm commitment one way or the other, to ease or to tighten. Without the Fed making firm commitment to ease, the stock market should soon start selling off as deflationary forces intensities.
On the short term timeframe however, key resistance price level for NQ on Monday will be 4790.
-- Selling pressure should be under control if NQ can break back above 4790.
-- Sellers is likely to be active if NQ could not clearly break back above 4790, with the next support at 4745 with strong support at 4700.
