120509 FTSE Open

Morning all,

Just going to be very brief over todays brief.

Seeing leads from Asia tampering off from profit taking and risk aversion over valuation, we will probably see this going through to Europe, as futures, again, points downwards. Currency lead is kind of becoming a little ineffective given that dollar continues to weaken from fundamentals. Though we do see crude and commodities to go down the water, which may hint that investors are ready to pull back from the upleg.

We continue to remain bears on banks ever since we started this blog. A key thing to note is that fundamentals have not change dramatically. Banks remain in need of capital, though the stress test is there to "reassure" our confidence. We may see more downside from financials, and I remain to call shorts on HSBC (hsba.ln), Standard Chartered (STAN.ln). RBS will also go down as Credit Suisse called on a sell rating today.

Oil stocks and material stocks will follow its underlying leads, going further south as investors will profit take from recent rally, as concerns over the speed of this "recovery" is questionable.

Defensive names may fair better, and, if, one prefers the equity market over others, this is where I would head my money. Tesco and Sainsbury will be good for holding, but would nota advice a long after the market has rallied so hard.

I personally remain a bull over precious metals, and I would look for longing gold and silver, though I would not attempt to look into gold companies as problems may continue to linger over finance problems.

I would look for ftse to continue to fall for another 0.5% - 1%, after it finished off down 0.6% yesterday.

happy trading!

ongy out.