There is a growing sense that progress is being made, but one nasty turn and the DAX could be knocking on 9000.
Update by David Madden, Market Analyst,
[4:12pm] European Stock Markets
With minimal data, most of the day was spent waiting for Jackson Hole in case Fed Chair Janet Yellen in her speech decided to rock markets with overly dovish or hawkish rhetoric.
As it turned out, she carefully walked the line between the two.
There was a sudden sell-off midway through the European trading session when memories came flooding back of just last Friday afternoon, with headlines of a Russian convoy moving into Ukraine.
The FTSE 100 and the German DAX fell sharply but quickly recovered off their lows but hovered in negative territory as caution prevailed while waiting for the Fed Chair's speech at Jackson Hole.
There wasn't too much to the news of Russian aid trucks crossing the border without permission, but it had the potential to escalate quickly and traders didn't hang around to wait for the escalation.
Stocks in Europe have been reflecting worries over the Eurozone recovery with barely a 1/3rd retracement from the highs in the German DAX contrasting with new highs in the S&P 500.
ECB President Mario Draghi speaks after the close of European markets so any reaction will take place after a long holiday weekend in the UK.
Investors are hoping Draghi will indicate extra measures from the ECB at Jackson Hole.
It seems likely Draghi will talk about all the possibilities for easing monetary policy and maybe go into details on how asset purchases / QE could work without announcing any actual plans.
That said, if it appears the ECB are doing extensive work on how an asset purchase program would work that could be interpreted as just one-step away from implementing it if needed.
The FTSE 100 was trading just beneath the three week high made on Wednesday and despite the brief wobble over the Russian aid convoy stayed there up until and Yellen's speech and dipped going into the close.
The Co-operative Bank announced a much narrower loss in the first half of 2014 over the same period last year.
The bank has been cost cutting and shedding assets, much like many in the sector including Barclays but the need was more apparent in the Co-op Bank after needing to be rescued following the discovering a $1.5bn hole in its balance sheet.
It's perhaps a sign of the typical account holder's contempt for their own bank that Co-op only lost 2% of its current account deposits despite drug allegations against its chairman and £1.5bn missing from its accounts.
Update by Jasper Lawler, Market Analyst,
Markets Tentative Ahead of Jackson Hole
With little economic data released today, stocks are waiting for speeches from members of the world's major central banks later this afternoon.
[10:32am] On a day all about speeches from across the Atlantic, the FTSE 100 has made an early beeline for the three-day weekend and is flat at 6775.
In London the prospect of a three-day weekend is no help to the volume chart of the UK's leading shares.
The weeks around the August bank holiday are normally some of the quietest of the year, and this one has been no exception.
Rehashed bid talk in the morning's newspapers in Vodafone (+0.9%) has got a few people excited.
Banking stocks are edging higher, led by HSBC (+0.8%) who has weighed into the imminent Scottish independence referendum, citing the capital flight that will immediately result from a breakup of the union.
The airlines continue to slide as fears over seismic activity in Iceland give investors and travellers déjà vu of the chaos caused in 2010; easyJet (-1.8%), IAG (-1%) and Ryanair (-0.5%) are all lower.
Rounding out the fallers is Petrofac (-2%), with news that its chairman is stepping aside.
Update by Will Hedden, Sales Trader,
FTSE 100 Daily Trading Report
The FTSE 100 is currently trading at 6,775.8.
Overnight, the market closed up 10.4pts (0.15%) at 6,770.5.
30 Minute Chart Analysis
The stock market index is trading higher than the 20 period moving average of 6,773.6 and higher than the 50 period moving average of 6,771.9.
1 Day Chart Analysis
The stock market index is trading higher than the 20 day moving average of 6,700.7 and higher than the 50 day moving average of 6,743.4.
Update by Gordon Childs, Editor,
[7:48am] Asian stocks advanced overnight following a positive session in the US after housing and manufacturing data showed the world's largest economy is strengthening.
With the better than expected data, this helped the Standard and Poor close at a record high.
Following the steep declines at the beginning of August, US equity markets have managed to recoup almost $900 billion in value, helped by easing political tensions in Ukraine and as central banks keep interest rates at record lows even during a strengthening economy.
The dollar weakened against major pairs as investors disregarded upbeat US economic data and ahead of an important speech from Federal Reserve Chairwomen Janet Yellen.
During Janet Yellen's first Jackson Hole meeting, many expect her to remain dovish despite the strengthening US economy.
With gold dropping by over $17 yesterday, the precious metal has slightly recovered this morning, trading $5 higher to $1,281 an ounce ahead of Yellen's speech.
European futures are indicating a lacklustre start as investors tread cautiously ahead of the central bank events at Jackson Hole.
The FTSE is called up 5 points to 6778.
Update by Lee Mumford, Trader,
[7:32am] UK Shares - Crossing Over their 50 Day Moving Average:
AstraZeneca (+2.95% to 4411.5p)
BTG Plc (+0.89% to 621.5p)
Close Brothers (+1.34% to 1283p)
Carillion Plc (+2.3% to 337.6p)
Firstgroup (+0.79% to 127.7p)
Hikma Pharmaceuticals (+2.96% to 1742p)
Intermediate Capital Group (+1.13% to 402.3p)
Standard Life (+1.48% to 376.9p)
UK Shares - Crossing Under their 50 Day Moving Average:
Randgold Resources (-1.86% to 4904p)
[7:32am] FTSE 100 Technical Analysis (30 mins chart)
FTSE 100 pivot point: 6717
Our preference: Long positions above 6717 with targets @ 6790 & 6830 in extension.
Alternative scenario: Below 6717 look for further downside with 6680 & 6650 as targets.
Comment: The RSI is bullish and calls for further advance.
Kazakhmys Beats Cost-Cutting Expectations
The mining firm faces some interesting questions as a fall in the share price has encouraged plans to sell off parts of the business and cut costs.
[4:19pm] Heading into the close the FTSE 100 is up ten points as the feel good factor from the US pulls European equities higher.
In London, the FTSE 100 is eking out a small gain as a lack of negative news from Eastern Europe and a string of positive updates from the US have brightened the mood; the Eurozone stock markets are benefiting the most from the improved relationship with Moscow.
The unimpressive services and manufacturing data from the Eurozone is fuelling speculation that the European Central Bank will loosen its monetary policy this side of Christmas.
You can also use a spreads account to access shorter-term daily FTSE markets. Readers should note that opening such an account is normally subject to suitability and status checks.
If your account application is accepted then, once logged in, you will be able to access the charts and the current prices. Access is normally free, however, the catch is that you could get the odd sales letter or email from your firm.
Of course, if you do decide to trade, be aware that spread trading and contracts for difference carry a high degree of risk and you may lose more than your initial deposit.
Advanced Charts for the FTSE 100
Although the charting packages normally differ from platform to platform, in order to assist you with your FTSE 100 analysis, most charts generally have:
A large range of time intervals - 1 minute, 2 minute, 10 minute, 1 hour, 4 hour, 1 month etc
A variety of chart types - candlestick, line and OHCL charts
Drawing tools and features - Fibonacci Time Zones, Arcs and Fans
If you are interested in a free Test Account which allows users to get a better understanding of financial spread betting, and practice trading markets like the FTSE 100, then you could always take a look at:
All of the above companies provide a Demo Account that lets users practice trading, apply a variety of orders, try out strategies and review charts.
How to Spread Bet on the FTSE 100?
As with many global markets, investors can spread bet on stock market indices, like the FTSE 100, to either rise or fall.
If we log on to Financial Spreads, we can see they are showing the FTSE 100 Rolling Daily market at 5785.3 - 5786.3. This means an investor can spread bet on the FTSE 100 market:
Going above 5786.3, or
Going below 5785.3
When spread betting on the FTSE 100 index you trade in £x per point.
Where a point is one point of the index itself.
Should you choose to invest £4 per point and the FTSE 100 moves 24 points then that would alter your profit/loss by £96. £4 per point x 24 points = £96.
Rolling Daily Index Markets
An important aspect of this Rolling Daily Market is that there is no closing date for your trade. You do not have to close your trade, should it still be open at the end of the day, it will roll over to the next session.
If you allow your trade to roll over and are spread betting on the market to:
Increase - then you will be charged a small overnight financing fee, or
Decrease - then a small payment is normally credited to your account
So, if we take the above spread of 5785.3 - 5786.3 and assume:
You have analysed the indices markets, and
You feel that the FTSE 100 index will rise above 5786.3
Then you could decide that you want to buy a spread bet at 5786.3 and risk, let's say, £2 per point.
With this trade you make a profit of £2 for every point that the FTSE 100 index moves higher than 5786.3. However, it also means that you will make a loss of £2 for every point that the FTSE 100 market moves below 5786.3.
Considering this from another angle, should you buy a spread bet then your profits (or losses) are worked out by taking the difference between the closing price of the market and the initial price you bought the market at. You then multiply that difference in price by your stake.
Therefore, if after a few trading sessions the UK stock market rose, you might want to close your position to lock in your profit.
So if the stock market increased then the spread, set by the spread betting company, might move up to 5849.4 - 5850.4. In order to close your position you would sell at 5849.4. Accordingly, with the same £2 stake:
P&L = (Closing Price - Opening Price) x stake
P&L = (5849.4 - 5786.3) x £2 per point stake
P&L = 63.1 x £2 per point stake
P&L = £126.20 profit
Speculating on stock market indices, whether by spread betting or not, doesn't always work out. In this example, you had bet that the index would go up. Nevertheless, it might go down.
If the FTSE 100 index began to drop then you might choose to close your spread bet in order to restrict your losses.
Should the market pull back to 5731.9 - 5732.9 then you would close your spread bet by selling at 5731.9. If so, you would lose:
P&L = (Closing Price - Opening Price) x stake
P&L = (5731.9 - 5786.3) x £2 per point stake
P&L = -54.4 x £2 per point stake
P&L = -£108.80 loss
Note - FTSE 100 Rolling Daily prices as of 1-Oct-12.
Below we have a simple interactive example from Financial Spreads on how spread betting works when trading the FTSE 100.
This quick example shows how the Stop Loss works and also how your upside is unlimited.
Note that Stop Losses are not guaranteed but you can opt for a Guaranteed Stop Loss with Financial Spreads.
How to Spread Bet on the UK 100 - Example 2
Looking at a spread trading website like Tradefair, we can see that they are showing the UK 100 Rolling Daily market at 5787.8 - 5788.8. This means an investor can spread bet on the UK 100 market:
Rising above 5788.8, or
Falling below 5787.8
Whilst financial spread betting on the UK 100 index you trade in £x per point. So, should you decide to risk £5 per point and the UK 100 moves 27 points then that would make a difference to your bottom line of £135. £5 per point x 27 points = £135.
So, if you continue with the above spread of 5787.8 - 5788.8 and assume that:
You have done your research, and
Your research suggests that the UK 100 index will move higher than 5788.8
Then you might decide that you want to go long of the market at 5788.8 and risk, for the sake of argument, £3 per point.
So, you make a profit of £3 for every point that the UK 100 index moves above 5788.8. However, such a bet also means that you will lose £3 for every point that the UK 100 market decreases below 5788.8.
Looked at another way, if you ‘Buy’ a spread bet then your profit/loss is calculated by taking the difference between the settlement price of the market and the price you bought the market at. You then multiply that difference in price by your stake.
As a result, if after a few sessions the UK stock market started to move upwards then you could choose to close your trade in order to guarantee your profit.
So if the market moved up then the spread might change to 5831.6 - 5832.6. You would close your position by selling at 5831.6. Therefore, with the same £3 stake your profit would be calculated as:
Profits (or losses) = (Closing Value - Initial Value) x stake
Profits (or losses) = (5831.6 - 5788.8) x £3 per point stake
Profits (or losses) = 42.8 x £3 per point stake
Profits (or losses) = £128.40 profit
Financial spread trading doesn't always work out as you would have liked. In this case, you wanted the UK index to rise. Nevertheless, it might decrease.
If the UK 100 index decreased, contrary to your expectations, then you might decide to close/settle your trade to limit your losses.
So if the spread fell to 5751.2 - 5752.2 you would close your trade by selling at 5751.2. Accordingly, your loss would be:
Profits (or losses) = (Closing Value - Initial Value) x stake
Profits (or losses) = (5751.2 - 5788.8) x £3 per point stake
Profits (or losses) = -37.6 x £3 per point stake
Profits (or losses) = -£112.80 loss
Note: UK 100 Rolling Daily spread betting market accurate as of 28-Nov-12.
How to Trade FTSE Futures
If we go to a platform like FinancialSpreads, you can see that they are currently pricing the FTSE 100 March Futures market at 5717.3 - 5721.3.
Therefore, you can speculate on the FTSE 100 index:
Settling above 5721.3, or
Settling below 5717.3
On the expiry date for this 'March' futures market, 15-Mar-13.
As with the daily markets above, with the FTSE futures market you speculate on the FTSE 100 index in £x per point. So, if you decided to have a stake of £4 per point and the FTSE 100 moves 35 points then that would alter your profits (or losses) by £140. £4 per point x 35 points = £140.
FTSE 100 Futures Trading Example
If we think about the spread of 5717.3 - 5721.3 and assume that:
You have analysed the UK stock market, and
Your analysis suggests the UK index will finish above 5721.3 by 15-Mar-13
Then you may decide to buy the futures market at 5721.3 and risk, let's say, £5 per point.
With this contract you make a profit of £5 for every point that the FTSE 100 index rises higher than 5721.3. Nevertheless, it also means that you will make a loss of £5 for every point that the FTSE 100 market moves lower than 5721.3.
Thinking of this in a slightly different way, if you are spread trading and you 'Buy' a market then your P&L is calculated by taking the difference between the settlement price of the market and the initial price you bought the spread at. You then multiply that price difference by the stake.
As a result, if, on the expiry date, the FTSE 100 settled higher at 5749.9, then:
P&L = (Closing Price - Opening Price) x stake
P&L = (5749.9 - 5721.3) x £5 per point stake
P&L = 28.6 x £5 per point stake
P&L = £143.00 profit
Trading UK stock market futures is not always easy. With this example, you thought the index would increase. Nevertheless, the UK stock market could fall.
If the FTSE 100 fell and settled lower at 5696.4, you would end up making a loss on this trade.
P&L = (Closing Price - Opening Price) x stake
P&L = (5696.4 - 5721.3) x £5 per point stake
P&L = -24.9 x £5 per point stake
P&L = -£124.50 loss
Note - FTSE 100 March Futures market correct as of 27-Sep-12.
Financial Spread Betting on FTSE 100 Companies
Simply click on the company you're interested in spread betting on.
As well as broker ratings, indicative prices and charts, we talk you through the most popular spread betting questions for the UK firm:
Below, an old but still useful case study on the UK stock market by Shai Heffetz, InterTrader, 28-Apr-2011.
Being an index of the 100 biggest companies on the London Stock Exchange, the FTSE 100 is considered a quite reliable yardstick of the health of the economy in general.
If one looks at the period since the index started at 1000 on the 1st of January 1984, the picture certainly looks healthy. The current value of 6041 represents growth of more than 500 per cent over the 27-year term.
The fact of the matter is, however, that the index is currently well below the record level of 6950.6 it reached in December 1999, which means that in effect we have seen negative growth over the past 12 years.
FTSE 100 Technical Analysis
If we consider technical analysis of the FTSE 100 then, looking at the Ichimoku Kinko Hyo on the candlestick chart below, everything seems to point to a bull market as the price is far above the cloud.
It is also well above the red Tenkan-Sen (short-term average) and the blue Kijun-Sen (longer-term average). The green Chinkou Span line is also well above the price 26 days ago, strengthening the perception of a bull market.
There are, however, a couple of things that could indicate that we should not jump to conclusions. The red Tenkan-Sen has turned flat, which indicates short-term uncertainty in the market, and the cloud is also very thin, which further points to indecisiveness in the market.
If the price should break through the recent high of 6064.80, we might see it test the previous high of 6106.80 it reached on 8 February. A cautious trader would not enter a medium or long-term position long position before this happens. A potential stop loss level in this case is the red Tenkan-Sen line.
In the current market, traders should wait for further signs of weakness before entering into a short position. If the price drops as far as the Ichimoku cloud, it could be on its way to test the previous low of 5505.30 on 16 March.
A careful trader will wait for the price to break downwards out of the cloud before going short, but this could rob you of most of the profits in the swing trade. An alternative, but riskier, approach would be to go short as soon as the price drops below the blue Kijun-Sen.
The London Stock Exchange (LSE) is one of the world's oldest stock exchanges. It's been trading for over 300 years. According to the LSE website it started life in the coffee houses of 17th century London (pre-Starbucks).
For readers who are not familiar with the term 'FTSE 100' it is simply an index of the 100 largest companies on the London Stock Exchange. The index is maintained and owned jointly by the Financial Times and the London Stock Exchange.
The index came into being on 1 January 1984 with a base value of 1,000. It reached a record level of 6950.6 on 30 December 1999. The financial crisis of 2007–2010 saw it drop dramatically to 3,500. Since then it has recovered to a large extent.
FTSE: Financial Times Stock Exchange. These firms (FT and LSE) are jointly responsible for the compilation and maintenance of the main stock indices reflecting the performance of the UK's top shares
FTSE 100: The index of the UK's top 100 companies, as ranked by their market capitalisation. Also referred to as UK100
FTSE 250 or FTSE MID 250: The index of the next 250 FTSE companies as ranked by their market capitalisation
FTSE 350: The index of the top 350 UK companies by market capitalisation. A combination of the FTSE 100 and FTSE 250 stocks
FTSE ALL SHARE: An index covering about 800 shares representing 98% of UK stock market value
UK 100: In spread betting and CFD trading, the FTSE 100 is often called the 'UK 100'
'FTSE 100 Spread Betting' edited by Jacob Wood, updated 22-Aug-14
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FTSE 100 Spread Betting
FTSE 100 financial spread betting guide with a price comparison and daily analysis. Plus live FTSE 100 charts & prices, where to spread bet on the stock market index commission-free and... » read from top.