Stock Markets Remain Pretty Stable

Today was a pretty average day for the stock markets closing at very similar levels like yesterday. There was some volatility in the indexes but generally the stock markets managed to hold themselves at similar levels to yesterday. Wall Street fell by 8 pips, closing at 6886. The S&P 500 held itself at the 717 level, and actually fell by 0.47 of a pip, closing exactly at 717.11. The FTSE 100 was the biggest mover falling 55 pips and closing at 3665. All these moves were rather modest and it was quite suprising to see the confidence holding up these levels.

Although the markets did not move that much today some might see this as a victory for the stock markets holding their levels after Tuesdays dramatic rally. As I talked about yesterday Wall Street rallied because of the leaked report from the Chief Executive of Citigroup talking about a good start for 2009, and other positive comments in Washington.

My opinion is that this is still a false rally, and that the markets will fall in the coming days. It is a 100 million dollar question to predict what will happen next. Is this the level likely to be the low where we will recover from, or are we likely to see even lower levels? This year is looking exactly like 2003, and I think we are going to test those 2003 low levels. I still believe that there is more bad news to come, house prices will remain to fall, and I still think the general outlook for the economy is very low. I think personally that this will be a short lived rally and that this is in just a temporary bounce, and the markets will correct themselves very soon.

Tomorrow will be interesting to see if the stock markets can continue to rally or even remain at these levels. It is impossible to predict what will happen, but I will be watching with great interest as I am sure you will be too!

Kind Regards

Robert Stewart