Technical update for US markets

As expected, the delay of the bailout package causes severe stress in the financial markets before the WE and we will close on a weak bias if the package is not agreed upon before market close, which is very likely. McCain has the intention to gain some hero momentum. Although he rejected to read the 3 page bailout plan of Paulson last week, now he wants to gain from the situation.

A bailout plan will be hammered out this WE or early next week, which makes the very short-term overshadowed by this relief move and the prior downmove today will confirm in weekly charts a negative trend. As stated in an earlier post, the NDX could retest the 1600 support once again before another rally above 1700 occurs but that is basically just an oscillating market, which does not change direction. We still have to pinpoint the SEQ 13's to have some ground beneath our feet for a little while. In week counts, this week is week 4 and usually (likely) week 5 and 6 might carry a countertrend direction up but overall the momentum remains to the downside going forward. The SPX has to make 4-5 weeks of lower weekly closes to reach a more substantial low but that is a matter we will discuss once this bailout mess has cleared. Markets need to get the bailout plan (ironically) now, otherwise we might enter into a panic mode. That's another mistake Bernanke and Paulson made with their ANGST strategy to sell the bailout - they again could have acted more considerately.