Betfair Official Blog

Loose lips sink ships as the FTSE plummets on the basis of mere tittle tattle

Daily View - 20th March...

Markets continue to wing all over the place. As mentioned previously, if you discounted the moves induced by the days of Fed action, the story has been pretty dire since the start of the year, yesterday being a classic case in point. Tuesday's rate cut caused a 400 point Dow rally only for Wednesday and this morning to wipe out 75% of it.

The FTSE is called to come in 70 points lower on the off, as the index reacts to the 300 point drop in the Dow. This means that virtually the whole 200 point rally of Tuesday has now been removed and we are back down below 5500 at around 5475. The fragility of sentiment was dramatically shown by the ease with which a small rumour about HBOS managed to snowball into a semi-crisis.

Last week sterling was looking nicely poised for a bit of a return, but in the last few sessions these hopes have been cruelly smashed. The Pound has fallen from 2.0400 to 1.9800 and the rally above two bucks is beginning to look like a dead cat bounce.

On the commodities front it was nice to see after all the press comment on Tuesday regarding how everyone should be buying Gold, the yellow metal has, in just three trading sessions, dropped almost $100. As mentioned in yesterdays comment our biggest and longest term Gold longs all sold out on Monday, well above the 1000 mark. At 936.0-936.5 we are still very much in a bullish momentum move, but as with all big trends there will always be major corrections to shake out the unwary or the overly aggressive. Otherwise we would all be millionaires!