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Light.End.Tunnel

Daily View - 9th May...

The FTSE is still struggling to overcome the 6250 resistance, and although we have closed at or around that level several times, traders have shied away from buying above the line. The pressure still appears to be very much on the upside but we are vulnerable at the current level to just one bad piece of news. Mind you, markets do seem to have finally got shot of the reaction of reading every piece of information negatively, and are swinging over to the other side of the equation and are beginning to put on the rose tinted glasses once more.

For the first time in a while, we can finally a sense of spring in the step of shell-shocked investors as the feeling continues to permeate through that the worst may be over. Strange as it might sound, from the view point of the stock exchange, this is not as weird a proposition as you might think. Whilst the actual effects of all of the problems that have reared their ugly head over the past eight months have yet to be felt, professional investors spend their time trying to see a year ahead. There is not much point in waiting for absolute confirmation of a change in the financial landscape, as by then the stock market would have already rallied/fallen in anticipation of the event and you would be buying/selling at the top/bottom of the cycle.

Yesterday saw both the BOE and ECB hold steady on rates and whilst I was slightly surprised (short for 'got it wrong'), if you turn your head sideways and squint through the bottom of a dirty glass you can just about see their point of view.

Gold moved up to the resistance level mentioned in yesterday's comment at $882 and we are opening at that level this morning. With the Dollar weakening badly against both the Yen and the Euro in yesterday's sessions, the rally was not unexpected but we are still struggling to make new highs on the current 'wave', and there are significant resistances at the falling trend-line (currently at 895), and of course, at $900 (just because it is a big number).