On Friday, the stock market again traded sideways in a very narrow range. Unless it ccan break down below key support, the choppy sideways pattern should continue.
NQ has been trading sideways in a choppy narrow range, bouncing off 20-DMA support on the daily chart since the middle of September. Going into Monday trading, the 20-DMA support on the daily chart is around 4830. Absent of major market-moving news, NQ should continue to bounce off its 20-DMA.
Key inflection price level for NQ on Monday will be 4865.
-- Selling should be under control above 4865. However, with the bond market closed for Columbus day on Monday, look for the stock market to remains choppy and in a narrow trading range
-- Some selling may come in with NQ trading below 5865, but 4830 will serve as a powerful support. The stock market would need to be very bearish for NQ to clearly break below 4830 support.
According to JP Morgan’s September 30 Flows & Liquidity report, the pace of global bond issuance has risen significantly this year. According to the report, net bond issuance stands at $2.5 trillion so far this year, up by almost $400 billion compared to last year’s total.
This total excludes emerging market local debt but includes spread products – bonds issued outside central government. JP Morgan is forecasting a 55% rise in spread products supply for 2016 compared to 2015.
