Rick Klusman, head of institutional trading at Aequs Securities, predicts the market will rally sharply early and then fall away because the US is expecting a weaker open on Wall Street.
Fears the $US700 billion financial services industry bailout will fail to solve the global financial crisis have US investors betting that Wall Street will fall when it opens this evening Australia time.
Dow Jones futures are currently down 138 points, according to Bloomberg, to 11,217.
''People don't think it will work,'' he said. ''Generally the view is that intervention won't work but will only delay the problem.''
In fact, the bailout plan overseen by US Treasury Secretary Hank Paulson, must still get congressional approval, where a number of Democrats have voiced interest in attaching protections for US homeowners facing foreclosure and caps on executive pay.