It looks like Euro will complete its 8/4 test to the down side tonight. This could open floodgates to the downside. This could have severe consequences for the broader market. Firstly, it would confirm the down-trend prediction of the global equity index. Secondly, it could push US dollar higher, thus, bringing back the risk-off trade. Thirdly, risk-off trade could fuel another bond rally.
This chain reaction of events could morph into something substantial, especially if DJIA and Russell 2000 break below recent lows because these two indices will then join the Euro in completing the 8/4 test to the downside. As we know, 8/4 test has been a tremendous asset for our trading.
Detailed Euro analysis will be presented later tomorrow.