The 2012 Olympic Games will open this Friday in London, England. This news article mentions a cost to the British taxpayer of more than nine billion pounds, with a hoped-for return of 13 billion pounds over four years (as suggested by Prime Minister David Cameron). This seems like a pretty big gamble "at a time when Britons are struggling with a double-dip recession, rising unemployment and severe public spending cuts."
Data released on Wednesday shows that Britain's GDP dropped further into negative territory at levels seen in mid-2009, as shown on the graph below.
The Daily chart below of London's FTSE Index shows market action as at Tuesday's close of 5499.23. Major support lies at 5500, at the moment, and market action from mid-2011 is, basically, in a large trading range, defined by a triangle...in fact, this range extends back to 2009-2010 and is forming a large diamond pattern...potentially a topping pattern with a 1300 point range.
A drop and hold below this diamond could very well send London's equity index tumbling, possibly by 1300 points from 5500 down to the 4200 level, or lower...one to watch, along with future GDP data releases, as well as Libor fallout, over the coming weeks.
