Online Spread Trading
|
|
|
The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Trading 18 Aug 2010
Markets continue to creep higher although they are giving up a little in early action this morning with the FTSE quoted at 5325 having hit 5365 late in the US session.
The FTSE continues to outperform other markets with mining, banking and oil holding steady shrugging off any fears of a slow down. Markets in general seem to be trundling down the path of further Quantative Easing measures, in a variety of forms, from Europe and the US.
‘Old World’ bond and swap markets continue to discount any inflation worries preferring to concentrate on the medium term prospects for the base rate. On the other hand Gold is doing the reverse and seems to be concerned about inflation and the attendant effects of ‘printing money’ creating a bull argument for the Precious metals.
The hunt for some sort of yield is hotting up and there must be concerns that unsustainable valuations in some asset classes, long term sovereign debt for instance, are creating another bubble effect.
As mentioned the FTSE is called at 5325, 25 points off from yesterday’s close but still definitely in the higher half of the recent ranges.
There is precious little information out today with only the Crude Oil inventories to come from the US late this afternoon and so we would expect a quiet session with the likelihood being a minor continuation of current trends.
In general days with no data tend to follow the prevailing wind direction. We made it over the 5305/15 resistance level, and this now turns into support, but could not quite make it through the 5355/65 further barrier. The turn around in the Dow and S&P late in the day has brought us back to the current level.
I seem to have been writing about the Dow spreads being in or around the 10300’s for absolutely ages even though it has only been a week. However, the comment of yesterday still holds good in that the failure to reverse the fall out of last week is beginning to weigh on minds.
We made a spirited attempt to regain 10500 yesterday but late selling, for no discernable reason, has brought us back into the gravity well of the aforementioned 10300 level.
Technically the market is looking solid and Monday’s candlestick formation is generally seen as a bullish indicator it is just the anaemic performance that is beginning to grate. It is almost as though we are just waiting for the next piece of bad news to react to the downside.
The Dow is building a very solid ‘closing’ support level at 10290/10310 having been pinned there for four of the last five sessions.
Currency spread betting markets are still at the lower end of recent trading levels with the Euro recovering from the $1.2720/30 lows but not able to make it over $1.2900.
Sentiment is certainly not Euro friendly, for all of the rally from the pit of June, with most clients continuing to try to short the currency on any upticks and this is also reflected in the Pounds recent sell off from $1.6000.
Cable has, this morning, broken through the bull trend line in place since May although the EUR/USD is still above it having bounced from the line at the aforementioned $1.2720/30 on Monday.
This builds the possibility of, either the Cable break being confirmed with a Euro move lower or the Euro holding steady and dragging the Pound back up.
Gold remains at the top of the trading ranges but failed to make it through the $1225/27 resistance mentioned yesterday.
Today it is drifting lower in light action but there is reasonable support at $1221/23 to be defeated if a more general drift is to be seen.
There are a series of step supports under the current price, $1217.5-1219.5 and $1212/14, before the more solid $1200/04.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Spread Trading 17 Aug 2010
There seems to be a certain amount of nervousness around at the moment with equity markets holding their recent ranges, the FTSE to the middle/top and the US/Dax to the middle/bottom, and Gold pushing for the upside.
In times of concern Gold has frequently been a canary in the coal mine, although not always, warning of imminent but unquantifiable fears around the corner.
The last four weeks have seen something of a hiatus for the Equity markets with tight ranges dominating and the odd day or two day break out giving us some interest.
The drop in the middle of last week came out of the blue and, worryingly for many of the global indices, there has been no significant rebound, the FTSE being the notable exception.
The summer months have been notable for the sudden cessation of news stories about the sovereign fiscal problems of much of Europe but this is likely to change as the political classes of Central Europe return from their extended holidays.
Just because the headlines have gone from the front pages does not mean that the problems have been solved with a €750bn support package.
Not only this but inflation, continually disregarded by the various central banks in their drive to resuscitate growth, now appears to be raising its ugly head. It is proving to be much stickier than hoped in the UK and is now at a near two year high in Europe.
Not that the Bond markets seem to have noticed as the Bund and Gilts hit an all time high yesterday. This is because Base rates are likely to remain very low for quite some time as central banks continue to attempt to stimulate economies through the tried, and one would have thought ‘busted’, route of cheap money. As a result, long dated yields have finally followed the rates lower.
With China and the cheap manufacturing bases now experiencing some considerable inflationary pressures it is difficult to see where any external disinflationary impulses are going to come from. We may find that the ‘new’ era of cheap money runs full tilt into something of an inflationary spiral.
The FTSE is looking to open at the top of the range, again, as investors look for a break above 5305/15 once more. One wonders how many times we can have a go at the same level without success. As with the 5415/25 resistance in Late July/Early August we seem continually of the verge of breaking higher but never quite manage it.
Our spread trading clients are selling at the highs in pre-market trading and are, unsurprisingly, hoping for a repeat of the last three sessions. This is a dangerous game to play with too larger stakes but on past performance is a natural reaction.
There may be an attempt on the open to push us higher and take out some weak shorts but if we have failed to make headway by the US open then sentiment may begin to turn against the bulls.
As mentioned yesterday resistance is at 5305/15 and 5355/65 and support at 5225/35 and 5170/75. Oddly enough the tight support/resistance levels that pretty much exactly defined yesterday’s range and so it is not a massive leap of faith for day traders to try the same today.
Currency spread betting markets are quite stuck as well with the Euro meandering about in the mid $1.28’s and Cable holding its own around $1.5650.
Yen seems stuck in the ¥85’s and it is slightly worrying that the Dollar, which has rebounded versus the Euro and Pound, is still wedded to the lows against the Yen.
The attempt to bounce late last week has been reversed and, while the Yen looks heavily over valued already, the momentum seems to be showing the way to even higher ground. Very strong support for the USD/JPY is at ¥84.90/85.20 which is holding for the time being but longs should be wary of a break lower.
Gold is grinding ever higher and is now at $1225 pretty much its high for a month or so. There is some resistance at $1225/1227 from the previous support level in June and this may well hold us back for the time being.
A break above here though might give the bulls just the reason they need for a push to the highs. On the other hand, of course, pull backs are meat and drink these days and so shorts on our book are finally building as our clients start to come out of long term longs.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Spread Trading 16 Aug 2010
Early action on the UK equity markets rather exaggerates the word ‘action’ with the FTSE rising just some 20 points from the closing levels of Friday.
In truth this is not exactly surprising as there was precious little to get our teeth into over the weekend and the Far East showed no sign post either with the Nikkei slightly lower and the Hang Seng slightly higher.
The one piece of actual information shows Private Equity in its worst light with good trading performances from Saga and the AA swamped by almost usurious lending rates from the companies that actually own them.
Of course this is not the whole story as the underlying bank lending rates are more opaque. However, staff are being expected to take miniscule pay rises when they have done well simply because their company is borrowing at levels far above market rates from their actual owners and those same owners are trying to squeeze every drop for a possible float. The term “unacceptable face of capitalism” springs to mind.
As mentioned the markets are climbing slightly from last weeks closing levels as confidence continues to creep back into investors minds. The question as to whether last Wednesday’s slump would create its own little fear driven bear market seems to have been answered.
While economies across the Western world continue to struggle the fact is that there are precious few places to put your money to achieve any kind of return. Who knows how much you would need to have in a pension fund now to retain a decent standard of living on retirement? The danger in this is that, in chasing yield, we create another unsustainable bubble.
Money Supply numbers and Q2 bank results would indicate that economies are slowing once more as the first flush of post crisis spending dries up and new lending is difficult to engineer. The whole world needs to export its way out of its problems but with domestic demand outside of the Far East anaemic at best one does wonder who we will all be exporting to.
The resistance in the FTSE remains just above 5300 at 5305/10 the same as Friday and support at 52525/35 further out we still have 5355/65 and the biggy, 5415/25, on the up side and 5170/75 and 5110/15 to hold us up.
In reality it is still difficult to gauge an overall direction and as mentioned many times over the last few weeks 5200 to 5400 looks to be set for a while. On the Dow the omens actually do not look so optimistic as the rejection of 10700 has been rather more conclusive.
We are now at 10325 still 400 pips from the recent highs, the FTSE is just 120 away, and the S&P is 50 big figures from last weeks peak. The FTSE has bounced over 100 points from its lows whilst the US markets are still pretty much at them. The failure of the US markets to recover from the mid week falls is rather more worrying. The S&P is at 1080 as I write with strong support at 1069/1072, unnervingly close.
On the currency markets the woes of the EU bloc seem to be raising their head again as the European Central Bank expresses happiness with bad numbers. Tax receipts across the Southern States are worse than hoped and this will be adding to the overall debt level and decreasing their ability to repay in the future.
The recent weakness in the Euro, before the even more recent bounce, aided the big exporting nations, Germany, France etc, as was shown by Q1/Q2 growth numbers. All in all the storm clouds seem to be gathering once again and buyers of the Euro and Pound seem thin on the ground even though they have both dropped 5 cents in the last week. This seems especially true as the Dollar has gone through plenty of angst over that last couple of months.
Crude oil is back at the OPEC favoured price of 75 Dollars and it really is starting to seem as though this is ‘the price’. Since last June the price of Black Gold has effective oscillated about a core range of $75/78, achieving $65 on the down side and $87 on the up.
If the global economy does weaken towards the end of 2010 then we may see a break out to the downside but in any case tax rises across the world are forcing ever more economy on both business and private consumers. In the UK the price of a Litre is now approaching a peak again even though the underlying product is hardly moving.
Gold is moving inexorably higher and is now at a post 1st July, the big 50 Dollar reversal, peak. It has spent a couple of sessions testing the break of the $1212/14 resistance, now support, but has not seen a retracement.
In this environment the upside ‘looks’ the more probable but it is slightly worrying that the bulls have not made more of the break out. Both bulls and bears will be watching the aforementioned support levels as a return and close below here would not be good.
On the up side the target is no doubt the $1250/65 region which has proved a bar to progress in the past.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Spread Trading 13 Aug 2010
The choice as to whether Wednesday was a one off panic or a sign of things to come has, for the FTSE at least, seemingly come down on the side of a welcome buying opportunity.
This opportunity has been gratefully taken by many of our financial spread betting clients as the UK’s senior index has recovered much of its fall but, oddly, this is not universal.
The Dow and S&P are definitely off their lows of yesterday but are still 350 and 40 points respectively off the highs of earlier in the week. This can be explained by the fact that much of the bad news that kicked off the drop came out of the US and therefore it is not unreasonable to surmise that they should have been the heavier hit.
Unfortunately for this argument the US is still a major driver for Europe and the UK. While the old saying that “when the US sneezes, Europe catches a cold” is not so relevant these days, due to the opening of Eastern Europe and the maturing of the Far and Middle East into manufacturing power houses, it is still difficult to see the UK out-performing North America.
The FTSE is trading around 5300 with clients making the most of the choppy trading conditions. While bear markets are generally bad for our traders, small drops and recoveries are usually quite remunerative.
As we oscillate around 5300, our spread betting account holders seem to be getting into the swing of buying after any down days and selling after the ups. This strategy is very frustrating for the market makers but, for a cautious trader who picks his/her levels with care, not unrewarding.
Resistance remains at 5305/10 5350 and 5405/15 and support at 5265/70, which held us back through yesterday’s session, and below here at 5200/10 and 5165/70.
The US markets have recovered from their lows as mentioned but the bounce seems less enthusiastic than in Europe, with the Dow Jones now just some 100 points from its lows. If another general move to the downside starts once more it is likely that the trigger will be this afternoon’s session from over the water.
It has been a frustrating week for investors as we began on Monday hammering at the highs and looking likely to break higher but now end it worrying about the strength of the last month’s rally.
We may well find that the US investors decide that discretion is the better part of valour for the time being and a Friday after a mid week plummet is not a time to be getting too over optimistic.
On the forex spread betting front, the Euro has bounced slightly from the lows but it must be said that it is suddenly looking weaker than virtually every other major. We are looking at support around $1.2830 and $1.2760/80 as with yesterday.
Versus the Yen, the Dollar did bounce off the ¥84.80/85.00 level as speculated and recovered to over ¥86 but selling this morning is building once again ad we are at ¥85.90 as I write.
The Yen is very strong in the face of rising confidence in the East versus the West and one does get the feeling that the Majors remain in a race to the bottom. All OECD nations would, on the quiet, like to see their currencies lower to aid growth and so we find ourselves in a situation where politicians are actually talking down their own currency.
Gold has, finally, managed to get back above $1212/14 and hold there but does not seem to be making much of the break out. Actual highs from July were around $1218 and so traders are probably waiting to see whether we can get over these before getting too enthusiastic.
However, the woes from the equity markets and the possibility of further ‘printing of money’ from the US and Europe are causing some further speculative buying.
Bears will be hoping for a return below $1212 and then an attempt on $1202/04. On the other hand, bulls will naturally be hoping that we remain at these levels for a while and induce confidence for another shift higher.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Spread Trading 12 Aug 2010
Just for a change we can at least say that we did warn everyone yesterday.
We described the recent news as rather worse than that which caused the markets to take a tumble back in May and June and investors seem to have suddenly decided exactly the same thing.
Things were not helped after ‘Merve the Swerve’ echoed the caution of the Fed and we must hope that the various central banks are trying to just be slightly negative and wrong rather than positive and wrong.
Commentators will generally forgive errors to the downside as the economy is doing well but, if the BoE forecasts 3.4% growth next year and only delivers slightly north of 2%, poisoned pens tend to be sharpened as articles pour scorn on the analysts.
Jobs data seems at odds with popular perception and one does worry that the numbers have been affected by companies with staff already on short hours merely employing temps as cover for the holiday period.
Late in the day, in the post session period after 21.00 last night, the US markets actually took an even deeper dive which took quotes for the FTSE down beneath 5200. This has now been reversed and we are seeing a wide range of ‘bottom picking’ going on as traders look to take advantage of cheaper prices this morning.
Aggressive buyers should be slightly cautious though as this might be a small hiatus in a general downward move. There is no getting away from the fact that equities appear incredibly good value versus other asset classes but this has been the case for a while now but bonds and swaps have just continued to increase the gap.
We now have the situation of the 10 yr Gilt yielding less than inflation, not unusual when inflation was at 6,7 or 8% and likely to fall but certainly odd when it is ‘just’ 3% and forecast to hold steady.
The FTSE is now at 5250 up a few points on yesterday’s close, having been quoted as low as 5171 last night. As mentioned we are seeing heavy buying across the board from our spread trading clients in a wide array of equities as traders try to ‘pick up a bargain’.
A bit of caution should be exercised though as unless we get some momentum going there is a chance of a continuation of the falls. We are now back at our comfort level of 5250, as long term readers will know this was our ‘tongue in cheek’ forecast for the year end back at Christmas last year, and the further the year goes the more ‘guru like’ we appear.
We can see support at 5165 and minor resistance at 5260/65 but we are likely to see some quiet contemplation for the morning session as traders try to second guess whether yesterday was just a stupid over reaction panic or a harbinger of things to come.
Forex spread betting markets were just as mad as the equities with the Euro falling over 300 pips versus the Dollar. While this was an aggressive move it can hardly be said to be surprising as the currency has had an extra-ordinarily good run over the last few months.
Today is seeing something of a rebound and the cross is at €1.2925 now with a solid resistance band from €1.2945/1.3020. Support is at €1.2835/60 and €1.2735/50.
The Yen is weakening this morning but again this is hardly surprising as yesterday’s move higher seemed rather overdone. The Euro/Yen spread betting market fell 400 pips in the last two sessions as the Yen actually out did the US Dollar.
¥84.80/85.30 looks to be a move too far for the USD/JPY as each time we have a pop at it the reaction failure takes us back towards, and generally above, ¥86.00 and back in November last year ¥84.80 was also the low before moving back up to ¥95.00.
Japan must be hoping for some relief soon from the never-ending pressure on manufacturing exports but in the short term it must be admitted that all the momentum is on the side of the Yen.
Crude oil, as feared in yesterday’s comment, really went for broke with the price falling at one point by over 3 Dollars. While we have pushed back from the highs bulls will presumably not be too disheartened as the long term trend since Feb 09 remains upward.
It must be admitted though that momentum has been lost over the last nine months and new highs are really needed soon, the next few months, to confirm the trend.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Spread Trading 11 Aug 2010
The FOMC announcement was one of the more impactful moments of the month to date as markets reacted to a supposed new stimulus package.
It appears though that all they are doing is using redemption and interest monies on the purchased treasuries to buy more treasuries, i.e. a neutral stance.
Markets appear in no mood for half way measures though and the initial reading is that the attempt by the Fed to be all things to all men may fall flat on its face.
Once again hard decisions are being put further and further down the line and the consequence of this will undoubtedly be a bigger bill in the end. The immediacy of the political requirement for instantly successful fiscal policy, rather than long term strategic planning, is doing no good either in the US or in Europe and the UK. Trying to formulate policies in which there are no losers is just not realistic.
This morning sees the Far East in retreat with the Nikkei spread betting market closing out down 2.7%, the equivalent of some 150 points in the FTSE if we were to emulate it. This is leading to lower calls across the board this morning with the FTSE actually priced just 30 lower in pre-market action while the Dow has sunk below 10600 after managing a reasonable close in the end last night.
Dealers are not likely to be aggressive buyers this morning until some of the dust settles and we can get a handle on the underlying reasons for both the Fed actions and their rather worrying statements. Implying that interest rates will remain very low for some considerable time indicates real fear that the US is slipping backwards. Maybe not into a recession but certainly into a state of weakness and at the mercy of any global chill wind that might blow.
The FTSE is back at the levels from which it has bounced several times in the last week, the low 5300’s, and so we will probably find a bit of bottom picking from the day traders. Incidentally, those day trading actually made out like bandits yesterday as they were able to sell above 5400 and buy back in the mid 5300’s, twice.
5405/15 remains a barrier and recent activity has done nothing but build the wall even higher. Returns are very attractive but news is getting worse and worse, there is no other way of describing it, and is certainly grimmer than the situation that presaged the falls in May and June.
Bond markets have reacted positively to the FOMC news but it is unclear whether this state of affaires can continue. Analysts look to the Japanese experience of 1995 to today to indicate how low long term yields might go but Japan was, and is, experiencing deflation and a large trade surplus, neither of which apply to the US or the UK.
More QE, even if it is slightly weakened variety, means more debt, printing money. I am afraid that the judges are still out on whether the central banks can continue the tightrope walk of stimulus, low base rates and low inflation.
Gilts are at all time highs as I write with the September future now at 122.92, indicating Yields of just 3.2%, only a couple of months ago we were worrying about the UK sovereign rating.
In all this Gold should be the winning hand but even here we are stuck at recent levels. Yesterday saw a strong attempt to break below major support at $1189/91 but this can to nothing and the rally after the Feds announcement took us back up to near the recent highs at $1208.
Unfortunately for the bulls this just about wrapped up the good news as markets are now slipping down once again below $1200. Worryingly there is always the underlying sentiment that if a market will not move in its expected direction after news then the probabilities start to turn in the other direction.
Crude oil has also slipped under 80 Dollars, after all the effort to get above it, and this looks to be a market to avoid if you have a heart condition.
If other markets start to get very pessimistic we might see some fireworks on the downside. Of course, if some stability gains a hold then the reaction bounce could be just as violent.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
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.
Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.
'Online Spread Trading' edited by Simon Denham, updated 18-Aug-10
Related Articles:
Financial Markets, updated 27-Aug-10
Financial Markets - your daily update on the markets with views and opinions from the insiders, plus a look at...read article.
Online Spread Trading, updated 18-Aug-10
A look at the latest spread betting markets plus company reviews, compare prices and details on where to free charts and free live prices....read article.
Spread Trading 10 Aug 10, updated 10-Aug-10
Currency markets showed the Dollar returning to some strength after Ex Treasury Secretaries Robert Rubin and Paul O'Neill advised against...read article.
Spread Trading 9 Aug 10, updated 09-Aug-10
The Dollar spread betting market has fallen over 10% during the last month or so and, while the rally was equally strong in the first half of...read article.
Spread Trading 6 Aug 10, updated 06-Aug-10
$1.5930 is the immediate hurdle for GBP/USD spreads, then $1.5980 and if we get to $1.6000 I'm sure the psychological level will provide some...read article.
Spread Trading 5 Aug 10, updated 05-Aug-10
The USD/CAD has broken to the downside, assisted by the continued strength in equity markets, so technical analysts are expecting even...read article.
Spread Trading 4 Aug 10, updated 04-Aug-10
Gold has broken back above the major long term bull trend line in a move engineered in the dead hours around 12.00 last night when no major...read article.
First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page
Daily Spread Trading Index
Index of spread trading articles - the regular Spread Trading Update from Financial Spreads...see Index.
|
|
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
|
|
