The Fed comments on Friday, threatening to raise interest rate, rocked the financial market, the Dow, the S&P500 and Nasdaq ended the day with big losses. Unless they change their tone on Monday, the stock market selloff is going to continue, and the Fed may not be able to hold the stock market up..
The Fed monetary policy is stuck between a rock and a hard place. On one hand, the Fed needs to raise interest rate to support the dollar in order to keep capital flowing into the US to support the economy and to support asset prices including the stock market. But raising interest rate when the economy is technically in recession, will cause the economy and the stock market to crash.
On the other hand, not raising interest rate is going to cause global capital to flow out of the US, causing the dollar to crash and that would cause inflation to skyrocket out of control.
At least for now, the Fed seems preferring to crash the financial market, then likely going to use the excuse of a stock market crash to usher in the new world reserve currency, the SDR, world money issued by the IMF, another fiat money that may temporarily prevent the fiat money monetary system from collapsing, but that would not last very long.
Asian market opened Monday in the red, unless central banks can come up with some announcement to calm the market tonight, the equity market selloff should continue on Monday.
Key price level for NQ going into Monday will be 4700.
-- If NQ can trade back above 4700, selling pressure should subside, and the first resistance is 4760.
-- Staying below 4700 could trigger another round of margin selling, with the next support zone not until 4530 - 4560 zone
