NQ Guideline For Friday

The Fed  monetary policy choices has gone into a no-win situation. It is a choice between saving the dollar from total collapse or saving the stock market from total collapse, and neither option is good.

 

With the stock market ready to crash, on Thursday, the Fed decided to let the dollar decline just in order to stabilize the stock market. The market was ready to sell off again at he open but a declining dollar managed to rally the market.

 

NQ has broken below key moving average support, the 20DMA and the 50-DMA. Unless NQ can rally back above those two moving averages, algo will remains in sell mode. Both S&P500 and the Dow futures remains above breakout support which helps keep selling under control. But the forces of global deflation is beginning to overwhelm central bankers. 

 

Key short term price level for NQ on Friday will be 4800, currently acting as resistance.

-- Trading above 4800 should keep selling under control.

-- Selling could resume if NQ failed to break and stay above 4800. Keep an eye on the US dollar index.

Crash Alert - NQ Guideline For Thursday

On Wednesday the stock market consolidated Tuesday major selling activities, setting up another massive selling day.

 

By trying to save the dollar from collapsing the Fed is sacrificing the equity market. Strong dollar is very bearish for the global stock markets simply because there is so much debt denominated in the US dollar. The more the US dollar rally the worse the global economic conditions become.

 

The current market configuration is similar to the pre-1987 stock market crash. Unless the Fed change their policy, selling activities may get so intense that it would overwhelm the Fed buy programs and crash the stock market.

 

Key price level for NQ on Thursday is again 4800.

-- A sustained break below 4800 could quickly tank NQ down to 4700, but the final target of any down move below 4800 is 4450 - 4500, with 4700 price level that may cause a temporarily bounce.

-- NQ should remain either in a consolidation mode or rally if it remains above 4800.

 

Is The U.S. Stock Market About To Crash?

NQ Guideline For Wednesday

The stock market sold off hard on Tuesday, three days ahead of money market reform that's due to come into effect on Oct. 14, overwhelming the Fed buyers. NQ sold off almost 100 points form last Friday closing price. NQ bounced off it very critical support at 4800.

 

Going into Wednesday, a clear and sustained break below 4800 could trigger an avalanche of selling that could quickly crash NQ down to the next major support at 4550, with potential support at 4700 area.

 

NQ key support on the short term time frame is 4800. But keep in mind that NQ daily chart is trying to confirm a massive bearish MACD divergence. A clear break below 4800 on the daily chart is likely to trigger an avalanche of sell orders, a down-move targeting 4450.

 

A $7 Trillion Moment of Truth in Markets is Just Three Days Away

Not since the financial crisis of 2008 has Libor, to which almost $7 trillion of debt including mortgages, student loans and corporate borrowings, is pegged — experienced such a surge. The three-month U.S. dollar Libor rate has jumped from 0.61 percent at the start of the year to 0.87 percent currently — a 42 percent rise — ahead of money market reform that's due to come into effect on Oct. 14.

The new rules require prime money market funds — an important source of short-term funding for banks and companies — to build up liquidity buffers, install redemption gates, and use 'floating' net asset values instead of a fixed $1-per-share price. While the changes are aimed at reinforcing a $2.7 trillion industry that exacerbated the financial crisis, they are also causing turmoil in money markets as big banks adjust to the new reality of a shrinking pool of available funding.

NQ Guideline For Tuesday

On Monday NQ was engineered to opened with a gap-up but without buyers, it simply traded sideways in a very choppy narrow range price action. There was not much selling activities simply because NQ remains above support. The choppy price action is likely to continue unless they are willing to trigger massive buy programs.

 

On Tuesday, the short term 5-minute support will be at 4875.

-- As long as profit-taking selling does not violate 4875 support, the choppy rally should continue.

-- Clearly breaking below 4875 is likely to trigger some selling that could take NQ down to lower support, 4835 - 4845 support zone.

 

Chart Of The Day: Global Stocks-----Hanging By A Thread Of QE, Threatened By Sinking Growth

NQ Guideline For Monday

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.

NQ Guideline For Friday

As expected the market chop around on Thursday as it traded sideways in a vary narrow range all day long. Any attempted selling seems to continue to be bought by the Fed just to hold the market up for the presidential election.

 

The choppy pattern should continue on Friday as long as the market stays above major support, and for NQ that major support is 4800.

 

Important short term balance price level for NQ on Friday remains at 4865.

-- Selling should remains under control with NQ trading above 4865, likely staying in a choppy mode unless they trigger large buy programs for the weekend.

-- There might be some selling below 4865, but as long as 4800 support is not violated, selling should continue to be bought.

NQ Guideline For Thursday

Not much happened in the equity market on Wednesday as all the major indices simply traded sideways in a very narrow range. There is simply no buyers at these level, with the market in overbought territory.

 

There is also not much short-selling activities at these price levels as the Fed continues to buy the bids in order to hold up the stock market until the presidential election is over, hoping for Hilary Clinton to win.

 

Until the major indices have clearly broken below supports, most major selling algos will be in active, and without new buyers, the market could continue to chop around at these levels.

 

Price support for NQ going into Thursday trading will be 4865.

-- NQ is likely to continue to chop around in a narrow range above 4865 unless they could trigger massive buy programs that could overwhelm the forces of deflation.

-- There may be some selling coming in if NQ trades below 4865, but it should remains under control until NQ could clearly break below 4800 key support level.

Famed Investor Gundlach Says Negative Interest Rates Threaten to Decimate Banks

NQ Guideline For Wednesday

The battle between the Fed buy programs and natural forces of deflation continues on. On Tuesday NQ stayed above 4855 key inflection price level in the morning but failed to attract any buyers to help rally the market higher, then in the afternoon NQ broke below 4855, but late day buy program managed to push NQ back up to close right at 4855.

 

Also, n Tuesday the Fed whacked the paper gold market very hard, selling over 1,000 tons of paper gold, a desperate attempt to either save the dollar, or a prelude to either lowering interest rate in the November meeting, or a prelude to QE4 or simply to save the gold bullion bank from their deep under water short positions. Whatever the reason may be, it is a desperate attempt to prevent collapse.

 

For Wednesday 4855 remains key inflection price level.

-- Above 4855, selling should remain under control.

-- NQ would need to break below 4800 in order to trigger massive selling activities. Until then, NQ should remain in a choppy mode.

 

Former Soros Associate Says Fed Responsible For Gold & Silver Smash

NQ Guideline For Tuesday

Not much happened in the market on Monday as it simply traded sideways in a very narrow range. As long as NQ is still trading above its 20-day moving average support on the daily chart, now at about 4810, it could remain in a choppy up trending mode.

 

Short term key inflection price level for NQ on Tuesday remains at 4855.

 

European Bank Perfect Storm

NQ Guideline For Monday

The battles between central banks and deflation continues. On Friday, buy programs managed to push the stock market up, an up day in the market, but the rally momentum on the daily chart is getting really slow, and a sharp selloff may not be too far away.

 

The Fed is going to continue to support the market into the November election in order to get banker-controlled Hillary elected for President simply because Trump is not really a banker-friendly candidate. Whether or not the Fed can really hold up the stock market against intensifying deflationary forces, only time will tell.

 

For Monday, short term key price level to watch is 4855, acting as support as of Friday's close.

-- Staying above 4855 should keep major selling activities at bay.

-- Trading below 4855 is likely to attract selling activities,  next support is at 4800.

 

European banking stocks are dying under the weight of the negative interest rates, stock prices hitting lows