A dismal day yesterday after a bright start and today the fear will be that the same thing is going to happen today.

The markets are all called well up on yesterday’s closing levels as the Far East found some strength from rather more hopeful manufacturing numbers out of China and speculation that the various stimulus packages were likely to be expanded once again. While the US and Europe endured a miserable session the Nikkei, Hang Seng and Topix actually managed a rally (the Hang Seng surging 3pc).

The problem for investors is that we seem to be going through the same routine every day with hope in the morning spilling into despair in the afternoon/evening and the FTSE futures have now had 12 down days in the last 13 sessions. If there is any buying pressure left it will have to overcome some significant support levels which will now have metamorphosed into resistance. With the call on the open at 3550 the first target is 3570-80 then 3600 and above here the major support level at 3660. Clients were sucked into the rally first thing in the morning of yesterday’s session and buyers were caught out by the sharp falls after the opening surge and in the late afternoon. Those who held on suffered throughout the day but might be clinging onto some optimism today.

Rumours of cash calls for virtually every other stock in the index are damaging sentiment almost irretrievably as one after another of the Financial, Property and Property related equities gets it in the neck. The problem for many companies is that, in the current fevered environment, a small posting on a chat page can quickly snowball into a massive sell off in value.

Traders will be hoping for some relief even if it is just of the ‘Dead Cat Bounce’ variety. Any kind of rally would be helpful at the moment!

As feared in yesterday’s comment Gold continued lower and at one point looked like having a pop at $900 before recovering to close just 10 bucks lower at $914. The metal is still relying on the perception of absolute worth in a world of increasingly uncertain value but, with wealth deteriorating at an incredible rate, the temptation to exit at least one of your assets at a profit, coupled with the perception that traders are very long might give further momentum to the down side. The long term charts for Gold are still very bullish and would remain so even if we fell to around $715 but unfortunately that gives quite a bit of space for the market to play with. As the Dollar continues to appreciate as well this is also weight on domestic values which gives added momentum to sellers.

ITV’s revenue number for 2008 was actually lower than 2007 and investors hoping for some glimmer of light at the end of the tunnel seem to have been disappointed. With so many calls on the revenue streams of successful shows and with a current squeeze on advertising costs the company seems to be between a rock and a hard place just for the moment. The expensive acquisition of Friends Reunited has added to speculation that the unit might be sold off but the company seems to have scotched the rumour. In the current environment the fear would be that any sale would be at a seriously reduced valuation as the unit has lost ground to the more aggressive networking sites. At 24p on the open it would be a brave buyer to come in at this stage.

On the plus side the Restaurant Group has released much better than forecast figures and the stock (which to be fair seems to have virtually ignored the general fall out over the last six months) is around 10pc up in early action.

On the currency front it is the Yen’s turn for a sell off today as traders seem to be taking turn and turn about over which currency to hammer. As mentioned yesterday (The dollar seems to be having a pause for breath versus the Yen having moved from 87.00 (mid Jan) to over 98.50 in February but is still looking solid at 97.65-97.67 this morning. There is probably some covert BOJ selling of Yen going on as valuations below 100 are pretty ruinous for their exporting base) the Yen is under pressure and punters have been quick to get in on the weakness. Sterling against the currency is struggling to make headway above 141 to 142.00 (currently at 139.67-139.75) having shied away from the level in three or four occasions since the turn of the year. If pressure can build for a break out the target would be 147 initially but, in truth, if confidence does start to drain from the yen there is a long way on the upside for the Pound after last years collapse.

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