NDX - technical update

So far the NDX acted as expected, we had a stronger opening, tested the gap and turned down. If it stays like that the brief snap up rally is over and we slowly will turn around again to test the lows. Make no mistake and get carried away by this bailout hype that just saved the downside panic from going overboard. The basic cure of the underlying weakness is not out of the way. Markets basically should not trade above 10 times earnings going forward, although they will until all market participants recognize that we are heading for a long and severe contraction. But markets are irrational by nature and driven by emotions as much as by facts. In times of turbulence, emotions take over and we just snapped out of hysteria but that does not change that the facts have to be faced. We might have seen the top of wave 4 today but since we have expiration, markets might be kept up for a few more days but basically wave 5 down should start anytime - we will know more by the end of today.