20080922

The WIG Index could not close the gap from last week:

The WIG20 Index looks better, but it's still under Fibo 61.8% level:



Fibo levels can give us some clues, but almost nothing else can be told from those charts. Therefore, take a look at intraday chart:



We have an uptrend line (green line), we also have few gaps above and below current price. Generally speaking the chart is rather neutral in terms of next session. However, taking into consideration low close in US markets I'm guessing (and only guessing in current technical situation) this will be direction for tomorrow. Remember, that in long-term there is still sell signal.

Paulson's rescue plan gives the Treasury secretary the authority to buy $700 billion in mortgage-based assets for the next two years (here). The commentary in private blogs and in forums seems to be rather negative, for a quick summarization take a look here (and please note there is no plan to buy from hedge funds). Take a look at the number from US Bank Derivative Exposure (shamelessly stolen from The BigPicture):



We really don't know terms for the assets exchange and there is too many emotions to have a clear picture now. However, this action will expose US government for additional risk. I'm really curious what impact it will have on US Treasury notes - chart is here.

Sources:
[http://bigpicture.typepad.com/comments/2008/08/us-bank-derivat.html]
[http://futures.tradingcharts.com/chart/NO/W]
[http://www.marketwatch.com/News/Story/treasury-fact-sheet-rescue-plan/story.aspx?guid={2B9D21F6-35BE-4544-A454-3A2A910F59BB}]
[http://www.marketwatch.com/news/story/paulson-urges-quick-approval-rescue/story.aspx?guid={0160DF73-8869-4E13-AADF-5A51B4C37F1A}]
[http://www.marketwatch.com/news/story/us-stock-futures-slip-mortgage/story.aspx?guid={9A2D31C6-CCE6-4786-8D05-93E2391066AC}]
[http://www.marketwatch.com/news/story/goldman-sachs-morgan-stanley-become/story.aspx?guid={CB72201A-A795-4C78-8F68-E64DAA26398D}]