Nortel is having quite an affect on the exchange. It has broken through its 52-week lows. UBS Warburg today is revising its estimates for the company substantially downwards.

The bulls and the bears have been slugging it out for the last day or two in the market and I think some of the bulls went home after the morning and the bears are sticking around to pound the stocks.

There was a sense in the last few weeks that we had seen the worst of the bad news, but the Yahoo's announcement made people look again at the tech sector and wonder what more bad news lurks out there.

We're up 10 percent from the recent bottom, and that's a big bump in a month. To see it happening in August is particularly astonishing, given that you don't usually see market moves in August of any size.

People are starting to believe that we may have seen the bottom of this market, and people are just coming back in.

I think the market may be making the connection that what will happen in the UK today will happen overseas tomorrow. I think that is not necessarily the case.