Markets are traversing the same range as the last three days once again this morning with the FTSE down at the 5200’s once more having failed to follow through on the rebound rally after yesterday’s humungous growth number. Various corporate releases today have been on the ‘disappointing’ side as well which has not helped matters.

It is easy to be blasé about potential for the future because of the general return to growth across the globe but the story is becoming increasingly patchy as Europe and the US struggle to match the Far East on the numbers. The bull argument is still very much in place and analysts continue to push the equity argument but the basic financials are starting to worry as bank funds become ever scarcer due to regulatory squeezes, first from the US then from Europe and back to the US again and so on and so forth. The politicians and regulators are eventually going to have to settle on what they want. A return to reasonable growth with the potential for the odd ‘blow up’ in the financial markets or absolutely rock solid, conservative, banks but with miserable growth prospects for the Western economies.

The FTSE has returned to the support area from which we rallied yesterday down at around 5200 and punters are doing what they did then .. which is buy everything once again. It worked on Monday and Tuesday so the thinking is that why not today as well? The dangerous factor is that continued attempts on levels generally finally achieve their aim. The rally of 2009 saw repeated resistance levels holding the markets back only for the barriers to be finally broken on every occasion. 5180/5200 has held the markets up all the way from mid November to today. A confirmed failure might be very poorly taken. This having been said it must be mentioned that the whole point about support is that it is, well, ‘support’ and until it fails it does represent a buying level.

Currency markets are continuing to batter at the Euro as the Dollar, Yen and Pound look to break higher. There is very strong support at 1.4000 vs the dollar and 0.8650 vs the pound both within striking distance of current levels and the Eur/Yen cross has penetrated into a new lower range after the falls of yesterday and this morning. We are seeing some buying of the Euro in early action as clients take profits and speculate on some recovery for the euro zone but it must be said that the steady slow grind lower is looking ominous. There is always the underlying fear that the authorities would actually welcome a weaker currency anyway so we are unlikely to get much in the way of comforting homilies from Mssrs Trichet, Merkel and Sarkosy. An intereseting fact is that for the first time in many, many, years the overnight funding for dollars is now lower than that for yen. This might have an undesirable effect on Dollar valuation as the cost of holding the currency moves into reverse.

Gold continues to oscillate between 1090 and 1105 and our clients are having a bit of a fun time playing the range. Rallies are getting tougher though and we are sitting precariously just above the major long term trend support at around 1085. We will almost certainly continue to see strong buying until this event actually occurs but longs should be aware that a break might be gruesome.

Oil is also sitting slightly uncomfortably above recent lows.

As with yesterday’s comment the temptation to go long of virtually everything is proving irresistible to our clients. If the supports across the landscape hold again then we may see the beginning of the next leg of the bull markets if not the going may get a bit bloody.