The Stock Markets Are Collapsing Fast

The stock markets went crazy and exceeded the all time lows set on March 3rd 2009. It was a weak day for the markets where we saw the annual report for General Motors (GM) which said they needed a minimum bailout of $16.6 billion by the US Government in order to avoid filing for bankruptcy. This contributed with the general weak state of the economy together with big uncertainty about the financial system. Citigroup shares fell below the key $1 level and this led to more uncertainty about the future of banks, and will probably need another bailout from the US Government.

Wall Street closed at 6632 which was a fall of 202 pips, and now is actually lower than the record low set on the 3rd March. The S&P 500 also fell closing at 686.38 which was a fall of 22 pips from yesterdays closing level at 708.38. This was also lower than the level set on 3rd March of 688.38 which was a record low since October 2006. The FTSE 100 also fell 120 pips closing at another record low at 3504. We also see similar moves in both the Nikkei 225 and German Dax.

I still think we haven’t see the biggest low in the markets and I think they can continue to fall even more. Even the interest decrease of 0.5% from the MPC did very little to inspire any confidence in the economy, and bad news seems to be cropping up everyday.

Tomorrow the Non Farm Payroll Report is released at 1.30PM and this will release details of the employment and I expect it to show that a lot of jobs were lost in the last month. This should contribute to the Stock Markets falling further, but it is very hard to predict whether this will happen in reality.

With my own system - the LS Trader system we trade solely on trends, so markets news is completely irrelevant with our system. However, I do like to follow it out of interest, and it is always fascinating to see what should happen, and what really does happen!

We will have to wait and see how the markets close for the week tomorrow!

Kind Regards

Robert Stewart