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U.S. stocks and bonds tumbled after the Fed altered the language in the policy statement following its last interest rate meeting of the year to a slightly more bullish outlook on the economy. The Nasdaq composite fell 40.53 to 1908.32 S&P down 9.12 to 1060.18 and the Dow Jones down 41.85 to 9923.42. It did make 10,000 for a brief moment Intraday as expected U.K Chancellor Gordon Brown will unveil his pre-budget report today against a backdrop of surging spending and sluggish tax receipts which threaten to bust his own much-vaunted fiscal rules. The Chancellor will need all his political guile to present his worst ever public borrowing total while arguing he is not facing a black hole in the public coffers. Abbey National The FSA said it had fined the bank a total of 2,320,000 pounds for breaches of its money laundering rules and for an inadequate monitoring of key regulatory risks. Kingfisher said it expected tough trading in the last quarter of its financial year as it reported a big rise in third-quarter retail profit. "With an uncertain outlook for consumer spending, combined with strong prior year comparative sales growth figures, the fourth quarter is likely to be challenging,"  Profit rose 21.3 percent to 179.1 million pounds in its third quarter with like-for-like sales up 3.6 percent. Stagecoach Group train and bus operator posted a 20-percent fall in first-half profits to 60.3 million pounds compared with 75.2 million pounds in the previous year and said trading so far in the second half was in line with its expectations. Reg Vardy car dealer posted a 35 percent rise to 24.6 million pounds in first-half profit and said it was on track to have 100 dealerships by April 2005.Telewest Communications and NTL are heading for a merger before the end of 2005 when both groups' hefty bank facilities run out, (The Guardian newspaper) Britsih Airways to get European green light on merger with Iberia

Calendar: United Kingdom	United States (GMT)	Europe & World (GMT
Blick (F), Burndene Investments (F), DS Smith (I), Hardys & Hansons (F), Henlys Group (F), iSoft Group, (I), Kingfisher (Q3), Mentmore (I), Northgate Info Solutions (I), Numis Corporation (F), Photo-Me International (I), Stagecoach (I) BAA Nov Traffic 12.30 Chancellor Gordon Browns Pre-Budget Report	Digex (Q3), Joule (Q3), Novadel Pharma (Q3)	07.00 Nov German Wholesale Price Index flat exp. 07.00 Oct German Trade Balance 13.9bn exp.
Ex Dividend: AbacGroup (6.8), Aberdeen Asset Management (2), Acal (7), Aggregate Industries (1.13), BSS Group (4.15), Bellway (13.8), Business Post Group (5.95), Castings (2.38), Country and Metropolitan (2.6), De La Rue (4.4), Dyson Group (1), East Surrey Holdings (4.75), Emap (7.6), Ennstone (0.35), Fenner (3.85), Fuller Smith & Turner (5.1), Goldshield Group (1), Headlam Group (3.6), Helphire Group (2), Jarvis (4.5), JD Sports (2.86), Luminar (3.67), Northumbrian Water (2.32), Pillar Property (2.4), Quintain Estates (2.75), Richmond Foods (5.5), Telecom Pl(4.5), VP Plc (1.6), Wincanton (3.48), Yates Group (1.65)

Croc@SnappyTrader.com  WWW.SnappyTrader.com

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Morning all

FROM TP The Playboy (On wrong thread.)
STOCKCAHRTS
12/9: 10K target hit today, and as expected is providing resistance.
This pattern should finally have been completed at today's high, and the inability to hold 10K and the technical divergences support that conclusion so far.
We should test 9800 tomorrow if the trend has changed, and judging by the ndx's failure to rally today as well it is highly likely.
So, once again there is a decent aggressive short play with a stop at today's high. Conservative play is to wait for the form of this decline and fade a corrective rally if it looks impulsive.
Key level is the wave 4 low around 9850 as any decline that was part of a larger pattern down should easily breach that level.
Failure to do so is a warning that this 5th wave is extending higher, to be confirmed by new high for the move.
It is truly amazing how long this market has held up without correcting the 2600pt rally from 7400, and has definitely caused me and just about everyone else to call a top early and often.
Note that a 'normal' correction for this size of a pattern is 38% if it's a 4th wave, and that's nearly 1000pts.
By that measure a test of 9K is expected even if it is a new bull market if we've finally completed the rally.



Updated 12/9 for Wednesday's market.
Key DOW Levels for 12/10
UP Above 10,000
DN Below 9,840

Double-Top at 10,000
Dow hits 10,000, then reverses.

From prior commentary, "...The Dow pushed solidly higher off the lower boundary of the wide trading range today, which forced an upside break from the consolidation...The upside break from the range implies continued strength..."
The Dow opened the session higher this morning and made its way toward the 10,000 level. We hit 10,000 early in the session, but were not able to hold above the level. Instead, the Dow set up what would later become a double-top reversal to the downside, seen in the 15 Minute Chart, which led to a 42 point loss for the session.

The fact that the Dow was not able to break through the 10,000 level hints at the likelihood of the index staging another move lower within the longer term uptrend, seen in the Daily Chart. The index may push lower within the trend and test the lower trend line at about 9,750. A downside break through 9,850 will increase the odds of such a move.

Otherwise the index will likely continue to trade between the levels of 9,850 and 10,000 until a break from this range occurs. We realize this is a wide range to watch, but we could experience whipsaw activity if action is taken within the range, which is why we want to wait for a break of either boundary.

Short Term Dow

Short term, the Dow has formed a tight consolidation at the lows of the 5 Minute Chart from 9,917 to 9,935. An downside break is implied, but watch both boundaries for direction at the Open.

Medium Term Dow

In the medium term, we closed Longs today at 9,830, giving us a 33 point gain for the prior trade. We are now out of the market and will watch 9,840 down, and 10,000 up, with 20 point stops.

NASDAQ & S&P

The NASDAQ experienced a "Pop and Drop" today, while the S&P basically did likewise. Each index ended the day near session lows and will likely continue trending lower within their respective ranges. *

Summary

The Dow saw a double-top at 10,000 today, sparking a decline late in the session. The index is likely to continue trending lower toward the major lower trend line from the Daily Chart. A break at 9,850 will indicate continued weakness, while an upside break through 10,000 will spark another move higher.


WED FTSE PP

R2 4430
R1 4405
PP 4382
S1 4357
S2 4335

Close was above Tue r1 but lost 3.2pts in the auction! 2 day ftse chart tricky again, brk out of 4360 on Tue, uptrend off Mon low broken through 4385 on Tue so pos test of s1, positive FED comments will no doubt push ftse back up to the bottom of the TL at 4400!

Testex-Dow is ED Downs i,m afraid but glad I could help! My own pp,s and analysis ftse though, well done! From many a chat on the Traders room Gurus are a no no, but Ed downs provides levels and likely scenarios, he does not pretend to have the Holy Grail, I cannot remember the last time his level brks were wrong, stick with him and avoid the NOISE!

croc-whoops!

Morning all. Thanks Croc & TP. Whot!! - another down day with TH so bullish!!!

mornin all

21st century
we've seen a lot of flipping and flopping. Once again the sentiment picture is trying to show a spark of fear that would presage a more serious decline. As we mentioned yesterday, we've seen buying lately come in when the tank fills to 20%...and if it doesn't come there it could happen at 50%. If, however, this is a bona fide mid-term a**-whipping in the making then the tank will fill past 50%.

Seasonality supports a flat-to-down market only until December 15, and then reverses and gets wickedly bullish. ( 4 more down days and then a reversal would be consistent with buying coming in at 20-50% on the tank.)

While I don't have a cool graphic for this note, it's worth talking about just how frequently the market rises during the much-vaunted Santa Claus rally (which we clearly demonstrated in this past weekend's Closing Bell is most likely to begin on or about December 16). In looking over the data for the SPX since 1962 here's what we found:

In Decembers that actually trade on the 31st of the month (like this year when that date does not fall on a weekend) the market rises in the last 11 trading days of the month 87% of the time. (26 wins, 4 losses). In Decembers that do not trade on the 31st the index rises in the last 10 trading days 73% of the time (8 wins, 3 losses). Combine these two sets and we have 34 ups and 7 downs for an 83% winning percentage.

Yes, Virginia, there is a Santa Claus (though some of us may like to think of him as the Clausenberger Rebbe). He launches his sleigh about 9 days ahead of the holiday, he is extremely likely to bring toys, and his infectious holiday cheer tends to hang around until Jan 6. Betting against his showing up is about as long a shot as you'll find in the stock market.

As Shogun pointed out it is witching next Fri, so above scenario could pan out with weakness into weekend then up into yr end and for the start of the New Year starting next week!

Morning all,

There are some good comments in the above posts, I'll
need to read them again and fit the dates into what
I want to do.

LGEN seems to get a little weaker with each FTSE
up/down cycle. I have to keep dragging my hand off
the 'Buy' button. (Imagine the wheelchair bound Peter Sellars
in that famous film where they bombed Russia by mistake.)

I'm still wondering if this is the effect of AVZ or just profit
taking.

Melnibone.

Morning all

I don't seem to be missing much except ETL - what happened there? (fortunetly I offloaded half of my holding for a quick profit two weeks ago, pity I didn't offload more!)

FTSE clinging to S1 whilst the US is still above what I
have as support levels at 1059/9920.

It doesn't know whether to drop to S2 or head back towards
the PP in an attempt to close the gap open if the US
retraces some of yesterdays losses this afternoon.

Melnibone.

FTSE now at S2 and at the weeks lows.

If it holds here there are some possible intraday
scalps for a retrace towards lunchtime.

Still too early to go for them, 5 min candles are still
trending down, need to flatten out or we'll drop to 4320.

Melnibone.

MKS now below the important 280p level.

It needs to get above this rapidly or the Bears will
take control again as Bulls who bought in at 270p start
to take dwindling profits.

Melnibone.

4330 Uptrend off late Oct low, 4300(yrly) then 4280(spike) but a little Ott imho! If Ed downs 9750 is reached after a pos brk of 850 then maybe! I will be longing into yr end around those levels if reached!

Afternoon, just logged back on after replacing the last
internal piece of my porch ceiling. It's a flat roof that sprang
a leak with the usual results. It's ready for plastering
and painting now.

I see that S2 failed and we got the 4320 plus a spike lower.

I hope TP is right and we get 4280/4300, the bottom of the
trend channel just before the possible start of a Christmas
rally would be ideal.

As usual, need direction from the US now. If it flat-lines
to 1630 Hrs and then moves I'll scream!

Melnibone.

Melnibone-i closed more of a long tern ftse short for a loss today, used liquid stops never a good idea, still running 20%! Closed a few off the low, have had some great daily results! SP doing a lot of work at 1060 would not surprise me to see the dow test 9970 before they sell the rally, ftse already priced these falls in so may well touch 4340 this arvo imho!

Dow Jones could well the 10k a couple more times before a fall sets in

As well as LGEN dropping out of the trading channel,
it looks like Old Mutual(OML) is following it.

I don't think I'll be buying into any speciality finance
shares until this fund trading debacle is done and dusted.

I think traders are looking nervously around trying to spot
the next cockroach. You seldom get one on its own.

Melnibone.

These US markets are looking flat to weak to me.

With a bit of luck they'll drop to 1051/9850
after the FTSE close.

This would give us a FTSE open tomorrow at the
bottom of the trend channel.

We live in hope, but no doubt they're just toying
with us and will leave the FTSE in no-mans land as usual.

Melnibone.

Keeping an eye on SBRY. It's coming down nicely and needs to drop
about another 8 or 10p to hit the bottom of the uptrend channel.

If it hits and holds there is a good chance that a Christmas
rally will bounce it up again. Will watch and see and let the
market guide me as usual.

Melnibone