The regular monthly spread trading review from IG Index.
IG Index FTSE Trading - Apr 08
"FTSE 100 stages impressive recovery"
The first quarter of 2008 was the FTSE 100's worst start to a year since its inception back in 1984. So it probably came as a relief and something of a surprise to see relatively strong gains in April.
Towards the end of the month, the blue-chip index had pushed back up above the 6100 mark, managing to reach levels not seen since early January. Throughout April the theme for the market seemed to be to 'buy the dips', with any weakness ultimately proving to be short-lived and the market bouncing back sharply.
This has left many world stock markets poised below what some feel are key barriers. Levels that have, in the past, stopped any further recovery. Going into May, traders and investors alike will be watching to see if the FTSE 100 can continue to build on its April gains, surge further past 6100 and claw back more of the losses suffered since the beginning of the year
(IG Index price data: compiled 30 April 2008)
IG Index Oil Trading
"Crude oil pushes out to reach fresh all-time highs"
As recently as our February Monthly Review crude oil popped up after it broke through the $100 per barrel mark for the first time. The last two months have seen further all-time highs, with the latest one just shy of $119 per barrel for the June US light crude contract (Nymex Crude Oil).
This month OPEC warned that oil prices could rise to as much as $200 per barrel, citing the falling value of the US dollar as a catalyst. Of course, OPEC is an oil-producing cartel, so for the more cynical readers this sort of statement is akin to an estate agent saying that house prices will go up forever. Of course the crude oil price trend of the past few years is plain for all to see.
Over the past couple of months, the $100 zone has proven to be something of a floor. Many chart-based traders would probably only consider that a move below here, at the very least, might suggest that the market is running out of steam.
(IG Index price data: compiled 30 April 2008)
IG Index Forex Markets
"Dollar slips to fresh all-time low against the euro"
US dollar weakness, particularly against the euro, is another trend that has been clear for some time. The EUR/USD hit a fresh high in April, albeit briefly, with the currency pair poking above the $1.6000 level for the first time.
The continued downbeat outlook for the US economy, coupled with the expectation of lower US interest rates, has conspired to make other currencies more attractive to investors and traders.
The $1.6000 area for the EUR USD cross rate has been lost in recent days but the past two months have seen support for the currency pair in the $1.5300 area. Analysts will be closely watching to see if buyers re-emerge to set up another possible attempt on the previous high.
(IG Index price data: compiled 30 April 2008)
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
IG Index provides an execution-only service. The material above does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. IG Index accepts no responsibility for any use that may be made of these comments and for any consequences that result.
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'IG Index Markets April' by IG Index, updated 07-May-08
For related pages also see:
IG Index Review of November, updated 15-Dec-08
While the FTSE 100 managed to hold above its earlier lows, this was not the case for the S&P 500. During November, the broader US index slipped back to...read article. IG Index Review of October, updated 10-Nov-08
The last few months have seen the banking sector in the limelight as the sub-prime drama continued to unfold. But a major casualty of the recent slowdown has been the mining sector which is...read article. IG Index Review of September, updated 09-Oct-08
When the US first announced a $700 billion bail-out of the financial sector, the indices staged significant rallies. But when the initial vote on 29 September failed to pass the bill, the Dow Jones recorded its biggest...read article. IG Index Review of August, updated 10-Sep-08
The strength of the US dollar took its toll on the price of gold. Back in March we saw all-time highs for the yellow metal but since then it has not had the same sort of momentum. In August the price broke below the $850 support level and eventually traded down to ...read article. IG Index Review of July, updated 07-Aug-08
The second half of July saw a significant bounce-back, with the FTSE 100 up around the 5400 level. The big question in the weeks to come is whether...read article. IG Index Review of June, updated 06-Jul-08
The second half of May saw weakness creeping into the UK blue-chip index and this really gathered momentum in June. Although there were brief signs of strength throughout the month, the FTSE 100 still lost more than 400 points and dropped back to levels not seen since...read article. IG Index Markets May, updated 09-Jun-08
The price of oil is seldom out of the news for long and last month was no exception. May saw the multi-year trend for crude oil continue, with the July contract pushing out to $135 a barrel. That is a 35% gain for this year already and more than double...read article. IG Index Markets April, updated 07-May-08
US dollar weakness, particularly against the euro, is another trend that has been clear for some time. The EUR/USD hit a fresh high in April, albeit briefly, with the currency pair poking above the $1.6000 level for the...read article. IG Index Markets March, updated 04-Apr-08
After a period of sideways trading in February, the bearish sentiment returned to the UK stock market in March. By the end of the month, the FTSE 100 was down by more than 11% for the year to date. The worst start to a year since the...read article. IG Index Markets, updated 04-Mar-08
Monthly Review: For much of the month, the 6000 level proved to be a ceiling for the index with successive rallies into this zone bringing the sellers back out. Over the last week, the FTSE staged more of a decisive push through here but we go into March with many still wondering if there is a more sustainable rally to come. Or is this just a...read article. IG Index Spread Betting Markets, updated 01-Feb-08
Monthly Review: Where next for the major world stock markets? During January, the FTSE 100 traded back to levels not seen since October 2005. This has left many concerned that this kind of a decline is not a healthy correction but a sign of things to come. Going into February, the market has regained the 6000 level but it is probably fair to say that ...read article.
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