Friday's action was pretty exciting.  At first, FTSE rose.  Dropped from 9.10 am onwards and stopped at about 10.20 am.  Went on to rise a bit after that and then - wham!  Dropped like a brick and kept dropping well into the close with a loss of 122 points.

What was interesting for me was the way the price action was contained within a channel.   In hindsight, it is very clear that the second touch of the upper line of the yellow channel should have alerted me to a very profitable shorting opportunity.  And having drawn this upper line, the lower line would have been easy to draw by cloning the upper line and placing it at the low made on Thursday.  As can be seen, Friday saw price moving down to honour the angle of the lower channel line!  What a trade it would have been!

But how did I actually do?  I actually closed the day with a net gain of 36 points.

Outlook for Monday, 10th Sep 2007  Given the plethora of bad news on the US economy and closer home (UK), one would expect a continuation of the downside action.  That would not be unusual.  But then again, don't we time and again see the markets behave contrary to our expectations?  Which is why I tend to think that come Monday morning, there is a good chance that we will see a bounce.  The current channel on the FTSE certainly seems to suggest that.  But should the market choose to do otherwise, I am not one to argue with it and will short the market at the first safe opporunity.