Tech update – Not bailing out LEH was a catostrphic mistake Paulson and Bernanke

The market bought the rumor and sold the fact – starting with an inside day again, which is not the making of a low. That’s why we need to open weak next week to get a reversal pattern daily and weekly in order to have a chance to turn around this market. That’s in conflict to the urgency the central banks might feel this WE – or they want to see what the outcome of the conference in Europe is according to the bailout package putting the market in more stress.
IT MIGHT COME TO A CAPITULATION AS THE MARKET WANTS TO SEE RATE CUTS THIS WEEKEND If not delivered.
Our overall scenario remains intact we might (at some point will) go for 1450 area NDX and 1050 SPX respectively 10000 area DOW and turnaround sharply if it happens next week. No action from central banks will send markets lower on Monday.

Excerpt
http://www.cnbc.com/id/27004984

Money markets remained largely frozen on Friday after the House of Representatives passed a $700 billion bill aimed at encouraging banks to start lending to each other again.

So-called “term” funding of one month and beyond remains mostly expensive and scarce because banks prefer to hoard cash to bolster battered balance sheets rather than lend to counterparties they fear may be in severe financial distress.

As Bill Gross from Pimco put it today – it’s not about the mortgage market anymore, it’s a broad credit market issue. The FED is always behind the curve – it’s not enough to throw money from helicopters Mr. Bernanke, as you may notice. Again – step up and do your job – you have made so many mistakes, it’s time to turn around the game and be ahead of the curve.

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~ by behindthematrix on October 3, 2008.

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