Indices Spreads Remain Subdued on Low Volumes

Indices Spreads Remain Subdued on Low Volumes

Recently I was in discussion with a top analyst from one of the major investment banks and the general thrust of the conversation was how fairly valued everything was at the moment.

Aside from individual stocks which an argument could be made for one direction or the other he was rather stumped to come up with any overriding argument for overvaluation or otherwise in any of the major markets.

As the provider of a spread trading platform for retail traders this is obviously not the kind of thing we like to hear as uncertainty and opportunity are grist to the mill for speculative dealing. However, I have to admit that the last few days have rather settled markets in a particular groove from which it is quite hard to adopt a view.

Today sees the Non Farm Payroll number at 13.30 which is expected to come in at minus 85k. It must be remembered that ‘growth’ is generally seen as a positive number north of 150k, and this shows how far we are from a genuine solid return from the recession of last year.

The market has built in quite a bit of negativity over this data so there might be a small relief rally in the Dollar if the number is not too far away from the forecast.

On the index front the FTSE 100 continues to flirt with 5400/15 but with the best will in the world it is difficult to see the momentum to get much above here just at the moment, although of course the opposite could also be said.

We have returned to the mid to low 5300’s. Since returning to plus 5300 level we have seen no appetite for prices under this mark nor for above 5400 and this morning shows no signs of this trend changing. Support is at 5350/60 and 5300/15 and then down at 5250. Resistance is 5400/15, 5450 and 5490/5500.

For the Dow Jones we can almost say the same thing, since finally getting over 10600 there has been no follow through above 10700 but no return into the 10400/10600 range.

Dealers seem almost somnolent and trade volumes on the exchanges are historically very low indeed. July and August are always supposed to be the quiet months but we have become used, over the last five years, to dramatic events unfolding in the spread betting markets over the holiday period. This year the summer seems to be returning to its historical low levels.

Spread Betting Markets - Indices Spreads Comparison


FTSE 100 (UK 100) Daily - Spread Size	1	1	1	1	1	1	1	1
FTSE 100 (UK 100) Daily - Min Stake	£1	£0.50	£2	£1	£1	£1	£1	£1
FTSE 100 (UK 100) Future - Spread Size	4	4-8	6	4	3	4	4	4
FTSE 100 (UK 100) Future - Min Stake	£1	£0.50	£2	£1	£1	£1	£1	£1
Dow Jones (Wall St) Daily - Spread Size	1	1	2	1	2-4	1	1	2
Dow Jones (Wall St) - Min Stake	£1	£0.50	£1	£1	£1	£1	£1	£1
DAX 30 Daily - Spread Size	1	1	1	1	1	1	1	1
DAX 30 Daily - Min Stake	£1	£0.50	£2	£1	£1	£1	£1	£1
S&P 500 Daily - Spread Size	3	4	5	3	5	3	3	8
S&P 500 Daily - Min Stake	£1	£0.50	£1	£1	£1	£1	£1	£1^
NASDAQ 100 Future - Spread Size	3	4-10	4	3	4	3	3	4
NASDAQ 100 Future - Min Stake	£1	£0.50	£4	£1	£1	£1	£1	£1

Comparison Notes.

Under no circumstances are the comments and the information provided herein to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice.

Neither CleanFinancial.com nor Financial Spreads or any contributing author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

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'Indices Spreads Remain Subdued on Low Volumes' edited by DB, updated 06-Aug-10

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