The bloodbath that started yesterday in the United States is set to continue, as the FTSE futures indicate an opening down 5% from yesterdays closing. The SP500 suffered the worst one day loss since October 26th 1987, wiping out almost 800 billion dollars in market cap. While no stock was spared from the sell off as the Advance/Decline ratio on the NASDAQ was at -80. The financials led the way with most companies recording losses in the double digits. The sell off has continued in Asia with the major indices currently down more then 5%. Unless there is a miracle we expect for the FTSE to spend the whole day in the red.
As traders were selling their equity holdings, gold was a huge winner, climbing above the 900 dollars per ounce level. Historically whenever traders felt uncertain in the equities market they would invest in precious metals. We can see that trend to continue as uncertainty and chaos should rule the day. The possibility of a different version of a bailout is not dead and it could possibly slow down the sale off today.
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