R.C. Market Report 09.26

• Market Trend: Neutral

• We've come a long way in just two weeks. Fannie, Freddie, Lehman, Merrill, AIG and now WaMu's failures plus the disappearance of the investment banking sector thanks to makeovers at Goldman Sachs and Morgan Stanley. We had a Fed meeting, SEC's banning of shorting, and plenty of congressional hearings. And it's all coming to an end this weekend with the completion of the Paulson's Plan. The plan will pass regardless of what anyone says. Political posturing by J. McCain delayed the inevitable for a couple of days. But enough of that.

• The market needs to take time and digest all of these changes. It's gone through two weeks of hell and everyone is relieved that so much has passed. That is why I am calling for a relief rally from this point going forward. I expect for choppy trading to continue, but the trend should be an uptrend with the initial primary target being 1325 on S&P 500 where 200MA will provide a solid resistance. I don't know how long it'll take to get there but I think it's safe to say that we won't be making new lows for the next couple of months.

• Thursday Oct 2. is when the shorting ban expires. Fast Money mentioned today that we may get a rally because people bought puts in market ETFs when shorting was banned. With the release of the ban, those puts will come off and it can be positive for the market. So keep an eye on that date. And before you know it, the earning season will be here!