The Dow bottomed out of its channel around noon (British Summer Time) and finished the day a further 60 odd points down having dropped overall by 180 points this decline was led largely by the banks and Real Estate shares with a few builders thrown in for good measure as speculation grew that the Government intends to bail out Freddie Mac and Fannie Mae. Today look for further selling at the pre-open and open particularly as yesterday’s market catalysts are the most likely to be negatively affected by today’s big news out at 1.30 pm (BST) timed with the pre-open, of Housing Starts. If worse than expected then the sell off could be quite rapid, then watch for a potential buy back as stop losses kick in. The FTSE, writes Greg, yesterday dropped by 4 points to close at 5450 but remains still within the channel of the last five weeks. The small high-test bar created by the tussle of indecision throughout the day sets well for a negative reaction out of the channel’s bottom level should the aforementioned news, signal a drop in the US. Oil is trading at $112.85 a barrel and Gold at $805.00 for 100g. Good trading and I will speak to you tomorrow.
