A bit of excitement in the markets on the open as rumours of a big Dutch Bank Fat Finger error at 07.56 this morning sent Cable down more than a big figure in a minute. Sterling fell from 1.5305 to 1.5185 a move which would take many 100’s of millions of pounds to create.  We have now bounced back up to 1.5310 as I write as traders buy back in the hope that the ‘FF’ dealer (if he exists) is forced to cover at higher and higher levels.  We may well go significantly higher if the sums involved were spectacular.

Apple’s results have given another boost to the markets and the reporting season in the States is proving to be rather more exciting than usual.  Company 1st half numbers seem to be much more varied than in recent times.  This said, the pressure on banks is likely to continue into the near and medium term future as politicians realise that their short term need for cash is finding an easy outlet in Bank fines and new taxes as Goldman’s numbers indicate.

The FTSE is opening far higher at 5220 up over 80 points as the ‘swingometer’ moves back towards greed from fear.  Every few sessions these days just seem to be the opposite of the previous few and the contra traders amongst our clients are having something of a field day. Resistance remains at 5250 and then 5300/5310 as it was last week and support at 5150 and 5110/5120 as before as well.

The Dow has rejected the 10000 level again, we hit it ‘bang on’ twice yesterday afternoon but failed to even print 9999 midpoint on our quote.  Traders do not need much of a signal to get going but this was a good one and buying just accelerated throughout the rest of the session.  Today sees us trading unchanged from yesterday’s close which might be a bit worrying as results yesterday might have led us to expect more of a move higher in after hours action.  The chances of another reversal in sentiment cannot be discounted!

As mentioned Cable is flying all over the place but there seems a lack of pressure to move us much above 1.5320/50 after falling back from the highs late last week and also not much appetite for sub 1.5150 either.  At the moment the world is focussed on the woes of the USA but we will probably swing back to worrying about the UK and Europe at some point and dealers would be advised to keep a weather eye on the news flows to get a handle on when this might occur.

Gold managed to rebound from 2 month lows yesterday in afternoon trade as the US, yet again, came in buying the Yellow Metal. As mentioned before there seems to be an almost inexhaustible number of potential buyers in Gold and it will take something very aggressive to seemingly change momentum.  Press speculation is still all about $1400 and $2000 as the target levels and with continual structural fears uppermost in investors’ minds it is not surprising that the safe haven status is still projected.  This said the rebound has still left us underneath the medium term bull trend line and traders should be aware that the price could almost halve and STILL be bullish.

Oil is continuing to follow the equity market around and so we are up a tad this morning on the back of the index reversal yesterday. We are up in top of the recent range territory though so progress 78/78.50 might be more difficult.  News that China had overtaken the USA on energy consumption did, I believe, come as something of a surprise for markets and the knowledge that their growth rate is still verging on the 10pc level bodes ill for supply/demand curve prognosis in the longer term.

Last Updated: July 21st, 2010