Trading Day

Last night we officially entered a bear market for the Dow - 20% down from its peak. Such labels may be merely cosmetic, but must have some psychological effect in that the bears can now look smug. The whole bulls and bears narrative sounds more like some forgotten mythology than a description of financial markets. I don't really give a damn about which way the market moves so long as I can find signals that catch those moves early enough to make a profit. But in the big wide world with lots more money to lose than me, many people have a vested interest in giving their unbiased advice. I really don't trust broker and bank recommendations as they just smell of self interest - there should be more independent monitoring services. Just take General Motors as an example. Two days ago the news was saying that the Dow's 200 point late rally was due to GM's better than expected sales. Their sales figures still sucked big time, but not as much as expected. Actually, that rally looked more like a reaction to oil coming sharply off its highs. Anyway, 24 hours later GM gets downgraded and its shares crumble - no new announcements, just another pump-and-dump play from the oh-so-wise big boys.

Well, last night was interesting in that oil did not retreat late in the day but remained stubbornly high, prompting the Dow to finally give up its bull dream. I expect this is in anticipation of the ECB hiking rates today, which will further weaken the Dollar against the Euro and thereby increase dollar denominated commodities such as oil and gold. Looks too easy a play so we shall see what will happen. I imagine much of the moves have already happened this week.

FTSE

Not so many support levels left to break. Looks like 5300 and 5100. The 5100 level may prove a bouncing off point as was the Feb 2005 high (5080) and then the Oct 2005 low (5130).

The ECB interest rate announcement is at 12:45 BST with a news conference later at 13:30 BST.