Oversold

There was no shortage of culprits for this weeks selling carnage. From funds being raised for the Facebook IPO to rumours that JP Morgan had been desperately unwinding numerous derivative positions before the regulators arrived ! Not to even mention Europe, that was probably the biggest reason for bids to dry up, so that at certain levels the market hit 'air pockets' and selling became a reason in itself for more selling. A European break-up has unquantifiable consequences. This has left the market short-term, in a technically oversold position, where any short-covering should create a bounce to the 1350 level. On reflection, we were too early with our speculative buy mid-week. We will be averaging down at any price below 1300 this week. However, a stop-loss should be put in place in the region of 1270, to protect some of the monthly gains made.