The regular monthly spread trading review from IG Index.
FTSE 100 Index News
"FTSE reaches 14-month high"
After the FTSE dropped quite sharply at the end of October, some investors started to worry that the market’s recovery was finally running out of steam.
However, as November got underway, the FTSE swiftly reversed its falls and once again started to climb higher. The index eventually came within a whisker of the 5400 level – the highest it has been since early September 2008.
This rally confirmed once more that the 4950/5000 level was a strong area of support for the FTSE – early November saw this zone tested, but the support level stemmed declines for a third time.
After a period of sideways trading for the second half of the month, news that Dubai World planned to postpone its debt repayments sent the markets into something of a tailspin towards the end of November.
However, so far this has also proved to be short lived and sentiment towards shares appears to remain broadly positive.
(IG Index price data: compiled 3 December 2009)
UK Ecconomic News
"Gold goes one way"
During October, gold managed to break out to its best levels ever, trading out to $1070 an ounce. As is sometimes the case with these sorts of breaks, there was a pause after these fresh highs were achieved – and the market gave no indication of what was to come next.
However, for much of November the price of gold moved in only one direction – up.
By the end of the month it had risen by around 13%, moving towards $1200 an ounce.
Several factors played their part here. The weakness of the US Dollar was one major driver for the continued strength of gold, as was a desire by some investors for assets that they perceived as less risky than, for example, shares.
This strength has continued into December and while many technical indicators may show the price as overbought, the trend has remained strong.
(IG Index price data: compiled 3 December 2009)
Currency Trading News
"Euro gains against US Dollar"
Another instrument benefiting from the US Dollar weakness was the Euro. During November, EUR/USD briefly pushed out through $1.5100, hitting levels not seen since early August 2008.
Of course, the main reason was the weakness of the Dollar and it served to extend the recovery that we have seen in EUR/USD for much of this year.
There was a brief wobble towards the end of the month with news of Dubai World’s debt issues, but for many technical analysts the trend remains firmly intact.
Some are suggesting that if this break is signalling that the next leg of the recovery is underway, then a return to the 2008 all-time highs in the $1.6000 region could be the next major target.
(IG Index price data: compiled 3 December 2009)
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 >>
"With IG Index you get all the normal advantages of Spread Betting plus..." >> read
IG Index review.
Risk Warning: Financial Spread Trading and CFDs carry a high level of risk to your capital. You may lose more than your initial investment. They 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.
Article provided / approved by IG Index which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 114059.
'IG Index Review of November 2009' edited by IG Index, updated 08-Dec-09
Index of monthly spread betting reviews from IG Index...see Index.
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more! All Free - Click here!
Risk Warning:
Please note that spread betting and CFD trading carry a high level of risk to your capital. You can lose more than your initial deposit. These products 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.
* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.
