Morning Call by Greg Secker 5th August 2008

The false start of the Dow’s downtrend at the start of May took hold around the 20th and dragged the index down over two thousand points less than two months later. The apparent reversal of this trend has since faltered and initially channelled into a 800-900 point range, now this range is seeming to be tightening and the price action has dived and rallied roughly between the11,600 and 11,100 levels. Seen on the day Chart the pattern forming suggests an ascending triangle. Should this occur and a breakout from resistance be the result at around the 11,600 line, it is unlikely to happen until around the second week of September when the Market is enthused with a resurgence of purpose and urgency as business focus returns to push forward toward the Christmas season peak in late October and early November. Yesterday the Dow Jones again opened to weakness and after a half-hearted attempt to right itself gave up to a lethargic close 42 points lower on the day. Not even the raft of economic news bursts of various kinds today caused much movement, as all was roughly in line with expectation. Today with little to stir this index again, as a whole, until 7.15pm (British Summer Time) when the Federal key interest rate is announced, watch for more indecision throughout the day, but be aware of the potential for volatile reaction at news time. The FTSE closed down at 5,320 by 34 points yesterday with little to show for the movements during the day that ranged over 100 points. Today with a number of indicators out at 9.30 (BST) reaction to them may well be muted ahead of speculation over the Dow’s reaction after this index has closed. Check the Dow movement in its last two hours for potential early direction on the FTSE tomorrow. Good Trading and speak to you Wednesday.