With volume low today on the Dow the push lower was more a case of no buyers rather that lots of sellers. The panic selling that was expected never occurred and the Dow was simply pushed lower on weak volume.

The FTSE held well at 4000 and briefly scouted below before coming back to settle at 4025. Tomorrow Obama outlines his housing solution and we will see how markets react. I’m confident of a return to 4200 on the FTSE as I think this current drop lacks the real conviction to drive us lower. It’s going to be a testing week but unless someone releases dire news I see us heading back into the trading range.

I think we have established a short term trend between 5500 and 5400. My hope is by openly stating this we break the trend and head either up or down. I don’t care just do something. If we move up I will go short over 5500 and if not I’m not too sure where I stand. My downward conviction is quite strong but at these levels we are very near the lows of the year.

Interestingly the DOW pushed well into bear territory yesterday but if we get another rally today this will lead to more uncertainty. My ideal scenario is down 100, down 150, up 30 and down 200. That would give us the kind of downward momentum we need to sustain this clean out.

This idealistic thinking doesn’t help me now and with no positions open my fear is that I miss a big swing. My mistake was not placing a 2.50 sell yesterday as the FTSE closed at 5512. I need to start evaluating where to go from here.