Trading Day

Another week, another bear market. A bright and sunny morning has quickly clouded over as FTSE heads for 5400 and the DAX 6300. Dow finally comes back into play later, and we shall see if it gives up on 11331. Talking of bears, the FTSE enters bear territory at 5400, hence has been flirting around this level for a week. The investment banks have been issuing conflicting advice of late. On the one hand we hear attempts at bullishness stating that equities are historically cheap and that much of the bad news has been factored in, and yet at the same time we see stocks downgraded on a daily basis. A case of watch what they do, not what they say.

From now on I will also be looking at the DAX. The FTSE and DAX have fairly similar shapes in the long term, but intra-day can behave somewhat differently. The DAX is largely composed of industrials and financials, without the heavy weighting in commodities. Hence, the DAX reactions to commodity and currency movements seems more clear cut than with the FTSE. We shall see if this continues to be the case.