NDX technical update

The NDX is about to test the 1600 once again, but that is not a good indication going forward for the bull camp. It adds from the price action to our assumption that we need to drop another leap down within 4-5 months (leap at least another 10%) to get to a point of equilibrium for real buyers to step in. The announcement of a final bailout plan will trigger short covering and, as you can see, we are close to count a seq 13 daily and that very likely will happen around the WE, less likely not before the WE. Once the 1600 has been defended once again, expect another rally above 1700. I am afraid we will break below 1600 in October, though opening the flood gates for a 10% drop. sentiment readings are supporting a short term recovery and we are getting closer to window dressing season. The overwhelming issue once the bailout approval is out, which will be moderated to some degree, will be an unpleasant earnings season and, therefore, a valuation adjustment of the stockmarket in general.