Yesterday the US and German markets made new lows.  The FTSE is not far behind though so far it has not breached the November lows.

I would expect a bounce soon, and the level that used to be considered support will now become the resistance level.  Then the big question will be will the resistance level hold?  My gut feeling at this stage is that it will, but I have been wrong before.  On the S&P500 800 was the support level, so a bounce to this level will be a normal event.

Again it is the financial sector that has provided most of the gloom.  There is still uncertainty as to the valuation of their “toxic assets”.  The headlines today are all doom and gloom. For example, “US Pressed to Add Billions to Bailouts”, “World markets fall amid relentless financial markets”,  “Tide turns against maga buy-out firms”.

Then the other big unknown is CDS’s (Credit Default Swaps).  These were ment to insure the holder, but the problem is that the CDS has been bought and sold many times over.  The real problem is when the holder wants to claim.

With so much uncertainty about market volatility will remain high.  So as usual all will be reveiled with time.