technical outlook for week of 8 Sep .-Jupiter makes the day

The bailout of Fannie and Freddie was done finally and since it was inevitable amazing that Paulson had to wait for Gross to warn for a financial tsunami ? - I have more the personal impression that Paulson waited for other things as well but that is pure speculation since Goldman was/is short financials which will obviously explode and financials did outperform the last days (short financials long energy did not work out at all the last weeks) - especially the suprising recovery on Friday was driven by financials - hence the information has been leaked to some degree.
Well as stated in the last post the chances were high for a WE trough with Jupiter going stationary on the 7th and into an exact Trigon to Saturn at the same time. we had as ist seems a false break to the downside in the NDX but the 200 weekly MA served as the floor (1740).

The euphoria from the bailout of the GSE's will not last long though since it does not change the fundamental tide which is a deterioration in the US economy and deriving negative momentum in the underlying mortgage market. we will see some short covering going forward especially in financials but lets remember the bailout just changed the fact that we have now a state sanctioned market manipulation. USA is moving to 'communism' it does not trust the free market powers anymore?

This week should be dominated by short covering and hence an upside bias but the gap/lap we have in todays opening will be tested at some point this week but probability is high for more upside into next week. At this point its tricky to say since we did not reach ideal lows for the SPX (1210) to start the short rally we might still see that level tested - it will depend on the NDX if we close back above 1800 we can tick it off as a false break, if not we need to go to the lows again and even a bit lower. The VIX did not reach ideal levels, around 24, we still might need to test 27. Some indicators had a short term extreme level like the RYDEX around .60. We are basically in a positive mode to sum it up for the next 2 weeks (basic effect of Jupiter stationary and Venus in Libra) but at/after full moon which is exactely on Uranus (surprising volatility) things can get out of hand again. since the brokers start to report starting around 16th. what makes the whole thing hard to predict is that at the same time Pluto went stationary as well which can bring Hanna and Ike to turn out bad compared to Gustav.

Technically the market looked like another down week by Friday - lets see if the short covering in financials is all we get for a few days or if real buyers step in - which I doubt since the next earnings season is ahead and expectations are too high we likely will see negative suprises go higher. I will have to update tomorrow after seing how markets deal with the bailout.