New Wave of Government Intervention

Wednesday & Tuesday have seen positive market action since that huge 10% rise in Western Europe Markets. The current consolidation seems to have some momentum!!!

New Wave of interventions have been anounced this week:

• Monday, the UK anounced it will cut VAT to 15% from 1st Dec. 2008
• European Union anounced a $200bn euro recovery plan http://news.bbc.co.uk/1/hi/business/7749382.stm
• Barack Obama began detailing his rescue plans for the economy, http://biz.yahoo.com/cbsm-top/081126/210d57da98961961a24ddd903b6b0cec.html
• China Slashes interest rates by 1.08% (biggest decrease in 11 years) http://biz.yahoo.com/ap/081126/as_china_economy.html

However the crisis is on, and untill any help propagates through the system many months will pass.

Jobless claims remain at recessionary levels, Americans cut back on their spending by the largest amount since the 2001 terrorist attacks, orders to U.S. factories plummeted and homes sales fell to the lowest level in nearly 18 years. [source: http://biz.yahoo.com/ap/081126/financial_meltdown.html]

9.84% Up day

The FTSE-100 opened with an up gap and rallied towards the end of the trading session to close at 4153 points. The psychological price level of 4K is being highly disputed by nervous market participants, as Citigroup receives a bail out package of over 20bl and the UK treasury announces further tax rate cuts in an effort to inspire more consumer spending and pump money into the economy.

Germany and France have also seen over 10% growth, whereas Nikkei 225 performed poorly with 2.7%.

To be honest it seems the 4K level will not be given up without a fight. It is always easier to find reasons for a move after it has occured and I am certain nobody expected such a strong rally on European Markets today.

Monday... the last week of November

Here we are :-), the month of November is comming to an end, and what a month it has been. October 2008 will unquestionably go down in history as black month on world markets.

However November wasn't much brighter either, on the 20th (Thursday) the FTSE-100 fell below the psychological 4000 level and Friday has seen more trading down in these regions. The Dow as well as the just mentioned british index are at their lowest for over 5 years this month.

More falling is to be anticipated, governments around the world however are actively fighting the oncoming avalanches of disaster, such as a sheduled statement in the UK on Monday 24th and plans to reduce VAT to 15%, see http://news.bbc.co.uk/1/hi/business/7739749.stm, http://news.bbc.co.uk/1/hi/uk_politics/7744273.stm

As for the comming week, who knows, it might be a very bad week indeed, however as for tomorrow FTSE-100 will likely open with a positive gap, due to the large Dow Jones gains on late trading hours on Friday, positive intervention plans by UK government and finally 3 continuous days of ~10% drops might call for some new interest from traders.

A lot of hope has been lost and long term or even mid term positive trends are extremely unlikely. But there is still hope, by mid-2010 we might be out of this recession http://biz.yahoo.com/ap/081123/lt_apec_summit.html!

hehe, oh my :-((