Monday Commentary\Market View
Pre-open
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(Uploaded Friday night 11th May for Mon May 14th)
The Markets have had a horrible fortnight in the historical style of sell in May and go away, with the excuse of the Greek\Euro babble back in the media spotlight, yet again.
Oversold now? Yes, for sure but, as they say, markets can stay oversold until you go broke.
The good news is that that the Elliot Wavers are licking lips and predicting imminent armageddon which tells us that a bounce this week is a near cert.
Nonetheless, day trading is the way to play it, as positionally trading is just too dangerous, with no stop level untouchable.
A hard stop loss though remains a must, however painful, because the range is so large, nearly 90 points a day on the Footsie and a wopping 160 on the Dow and the intra day action is erratically multi directional.
Don't listen to "advisers" because advisers run no risks themselves and although trading is a lonely business\vocation\profession\business, it is better to be alone than in bad company.
Pivots (for Today)
Pivots (for the Week)
| S3 | 5381 | S2 | 5429 | S1 | 5470 | P | 5518 | R1 | 5559 | R2 | 5607 | R3 | 5648 |
| S3 | 5230 | S2 | 5336 | S1 | 5423 | P | 5529 | R1 | 5617 | R2 | 5722 | R3 | 5809 |
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Footsie Future weekly Chart (JUNE)
Scalping(1)
Scalping(2)
The clock strikes noon to end this first morning session of the week and a dire affair it has been to boot.
Unable to shake off the seemingly endless political procastination in Greece and its associated ramifications for broader Euroland, the markets continue to grind downhill with not even half a decent rally so far and with all levels of technical support giving way daily. A very poor start to the week and confidence shattering for many buy and holders trying to return to markets which have proven erratic for so long. Shares are all over the shop.
There is an eerie feel to the world arising from a growing sense of general gloom and economic indecision. There must be some good news somewhere but it has yet to surface.
Footsie Future down 81 points on the day so far, perhaps the afternoon will fare better, or less worse. Where markets are concerned, sentiment can turn on a sixpenny bit in the blink of an eye.
DAILY numbers\closing update as at 2100hrs close*
| Open | 5499 |
| High | 5524 |
| Low | 5415 |
| Close | 5421 |
| Volume | 129k |
| Range | 109 |
| Change | (62) |
Official close\settlement time is 4.30pm but Contract trading continues to 9pm which for analysis purposes is the time data used on this page as the close of the day. The Open is now taken from 1am due to the "new normal" of through the night trading activity.
Limp
Some effort at a rally in the afternoon session proved to no eventual avail as it all slid back yet again.
Bad start to the week
It was a dire day for a Monday in the markets and the Footsie Future came down to 5,421, some 62 points down on Friday's final print but right now oversold is an overused and understated term.
Euroland
Greece seems, essentially, to be left without any Government at all, very dangerous, and with the country's politics unable to reconcile with German politics behind the mega bailouts it has had to receive to keep afloat. There is no real problem with an exit from the Euro and a return to the Drachma except for the contingent collateral damage which, shudder the thought, could include a run on the banks, generally, and that is thought by some to be the real cause of the depression of 1929.
A point in time in history
Where we are at is that all major things find their own time and place in history and economic growth has hit the skids. This will correct only when the onset of the next industrial revolution arrives.
As opined in this column over many years this will likely arise from a fusion of technology and medicine but these new railways of the economic next boom seem quite distant at this time, hence the futility of endless money printing and loans to sustain a negative difference between a country's income and its overall public expenditure overhead.
Simple housekeeping
It's quite simple to understand really, think of running a household where the expenditure is 4000 a month yet the income is 1000 a month, the difference has to be borrowed at a cost but for how long can that be sustained? Or cuts have to be made and how much pain is that?
No matter what they tell us, the UK is not far behind, i.e. the public sector overhead is more than twice what the national tax take\revenue is, how long can that go on?
Austerity is a bit of a joke because if taking a sword to the public overhead budget unemployment skyrockets and the economy suffers even more. All the more reason to realise that the public sector is a runaway train that has been allowed to grow out of control.
Revaluation needed
What is needed is a compassionate axe which plays along the lines of ok guys and gals the good news is that you can keep your jobs but the bad news is that you need to take a 40% cut in pay.
Alongside that is the need for a wholescale revaluation of the property market, downwards, and something clever to bring down the "must pay for" expenses of council tax, rent, mortgage, electricity, petrol, heating oil, coal and so and and so forth. Otherwise, we are going to see Tent City arriving.
Oh Well
Same day next week then and remember that trading is sometimes not a matter of holding good cards, but playing a poor hand well.
Public Holidays remaining in 2012:-
June 4 (Spring Monday)
June 5 (Diamond Jubilee Tuesday)
August 27 (Summer Monday)
December 25 (Xmas Tuesday)
December 26 (Boxing Wednesday)
Today's Markets :-