Real-time Spread Betting Prices and Charts
|
|
|
A regular spread trading update by Simon Denham of Capital Spreads.
For the latest spread trading update from Simon Denham click here.
Spread Trading, 15 Feb 08
The banking sector, which has been pretty hard hit anyway, took a triple whammy this week: UBS reported almost unbelievable sub prime/credit losses, Bradford and Bingley reminded us that there are other parts to banking portfolios that are at risk, the Germans revealed their own efforts to avoid a financial meltdown in the smaller bank sector.
The FTSE rather disappointed yesterday after a very late sell off took us from 30 or so up on the day into negative territory. Today we are looking to come in just slightly to the downside at around the 5875 level. There is hope that with neither Europe nor the Far East following the US weakness that we may be in for a nice and quiet day. There is resistance at 5915 to 5920 which if broken would give the bulls a target of between 6000 to 605. However a failure to close higher yesterday will have the bears looking for a pull back to 5825. A close below here would be short term negative and may give sellers the chance for a battle back down to 5680/5690.
On the currency trading front we are very quiet and with no news expected today it may well remain that way for the early trading session. GBP / USD looks to be quite happy at levels near to $1.9700 but we have made a habit of looking comfortable in recent weeks only for the support to be kicked away and sellers to come in 'big time'. The trend is still not Sterling favourable and so the "Pro’s" are favouring the short side in any volatile period.
With the Sterling Dollar spreadat $1.9684-1.9687 it is difficult to justify buying until we break above $1.9720, and close there. The Capital Spreads Account holders seem content to be short in small size.
Gold bounced once again from the $900 level which is making the support here ever tougher to break down. Support is now solid between $885-$895 and $900. On the other hand every attempt $930 as been brutally put down as well. With the gold spread betting market set at $909.5-$910.0 we look pretty much well poised for an attack in either direction. Any trading is very much of the speculative rather than calculated variety.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 14 Feb 08
Overnight the Nikkei has advanced some 500 points after Japanese growth (far from edging towards recession as was feared) came in at double economists estimates at 3.7% annualised in the forth quarter. With analysts expecting growth to be around 1.7% the question must be asked as to how, with such a massive source of data, the statisticians with all their wonderful models to play with can have managed to get it so wrong.
Today we are calling the FTSE spread to open back up at Tuesday’s closing level at 5915-5916 as all the rushing about of yesterday came to a plate of beans in the end. This week’s price activity in the FTSE 100 index has been quite comforting, as every attempt to take us lower has failed at a higher and higher price. This is a very general indication of a bull market move and (although it is only over a four day period) is giving our clients some confidence that the recent dark days may be drawing to a close for the time being. There is a sharp short term down trend line resistance at 5915 and then solid topside opposition between 5975 and 6020 but this will be the target of the bulls. Do not be deceived though, the bears have not gone away and the overall momentum is still to the downside. The sharp falls have been getting worse over the past six months and we are still very vulnerable to a change in sentiment.
On the FX side the Yen has slipped quite a bit over the past 24 hours (notwithstanding their growth numbers this morning). Heavy resistance at $107.35 failed to hold in yesterday’s action and Yen bulls were forced into some covering of positions which has forced us up the spread to $108.32-$108.34, the high since early January. The pound has gained slightly over the past few days vs both the dollar and euro which has given it a double whammy against the yen, pushing prices from 208.35 to the current 212.70-212.78. The previous move higher failed in the high 213’s and the daily trend lines are showing strong resistance higher at 216.50 to 217.00.
Cable at $1.9643-$1.9646 is experiencing a small bull run and is looking comfortable for the time being. The pound has made a habit of these rallies in recent months which look good but have a tendency to show marked signs of slowing down as they progress. They have each been followed by a sharp shift lower. The current move is likewise showing signs of running out of puff. The longs will be cautious of being caught in a fall out.
Gold bounced neatly off the support level mentioned in yesterdays comment at $895 and the gold spread is now at $908.5-$909.0. The recent strength of the dollar against the yen has probably held it back to some extent but the fact remains that we continue to have an almighty battle around the $900 level. Reading some analysts comments that Gold still had some $1,200 dollars to go, to get it back to the same level, in real terms, as the highs reached in 1981 did make me smile a bit. I am not saying that they are wrong but to compare valuations against a high that was itself ridiculous is just plain barmy. You might as well use that argument for every asset. Gold remains a dead hand. It has rarity value but so do many other things. It is merely used as a measure of wealth. It is not useful like dollars or euros that can be used to buy things or can be put in a bank to breed and make more dollars and euros. You cannot burn it for fuel or eat it and it ‘generally’ costs money to hold and gives very little, or no, return. The only thing you can really say is that it will still be here in another 1000 years. But so will the plot of land on which my house is built and I know which one I would rather own.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 13 Feb 08
FTSE down 100, FTSE up 200, FTSE down 75 etc etc etc...markets continue to blast all over the place on the most tenuous of news. The Sage of Omaha’s offer to kindly reinsure some of the safest debt around (municipal bonds) has met with a swift rebut of ‘thanks a lot’ but ‘no thanks’ probably with a side comment of ‘we have quite a bit of "very attractive", previously triple A rated, stuff that you are quite welcome to. The upshot of the news was to bolster financial stocks across the globe as the sheep followed where Mr Buffet ‘appeared’ to be about to tread. Banks shares do indeed look attractive but there is probably a good deal of nasty stuff still out there just waiting to hit the news wires.
I see that the Tory press is still pushing out the line that the Treasury is blowing £25bn in propping up Northern Rock. I wonder if they really believe that their readership is that stupid. The loans are backed up by mortgages on property worth a good deal more than the debts (not withstanding the odd 100% plus loan). If you believe that they will not get their money back then you should also believe that every building society and bank in the UK is effectively also going bankrupt. In the great scheme of things this loan is a good deal safer than most government loan largesse. AND, rather more importantly, as the ONS has insisted on it being added to the total Public Debt levels it may actually have the beneficial effect of restricting this administration’s predilection for just printing more and more of the folding stuff.
The CPI numbers, whilst rising up a massive 0.1%!, were in fact, rather cuddly compared to the horror stories doing the rounds after the PPI figures of the previous day. CPI data is derided by many but it is a general calculation used across the globe and as such is beyond the control of ministers and bureaucrats. In times past I seem to remember that it was frequently higher than the RPI number and as such I, likewise, cannot remember it being pooh poohed back then. With global domestic demand increasing dramatically (especially in the emerging markets) we may very well have to get used to paying more for finished products. As Mr and Mrs X in Shanghai get rich enough to buy the goods that we take for granted we may well find a bottleneck in supply drives up prices. In the longer term, with raw commodity supply also limited in its potential growth rates, the absolute limit on production may also very well prove a barrier to increased demand.
This morning the FTSE 100 has come in 75 points off, neatly wiping out nearly 40% of yesterdays rally in one go which has left a smile on the Financial Spreads Account holders’ faces as they were heavy sellers going into the close last night. As suggested yesterday, the 5700 support level proved too tough a nut to break and we hit a low at around 5705 before buyers outweighed the bears. The spread betting market is opening at 5830-5831 and it is difficult to think of anything to mention today. It still appears, to me, to be a far too dangerous market to get involved with. Day traders will continue to churn away (as they always do) but for serious investors, aside from locking in a bit of yield, the advice is probably still ‘cash is king’.
FX markets are still stuck in the same range that has permeated activity since the turn of the year and without a signal of some kind they look well set to continue to do so. The GBP USD spread is $1.9553-$1.9553 is off 50 pips this morning. However it is well supported at $1.9390 and resisted at $1.9620 and $1.9900 so punters will probably try to trade these limits. The Euro continues to hover just under 0.75 vs the pound at £0.7435-£0.7437 and vs the dollar is mid range at $1.4540-$1.4542.
Gold was the big loser yesterday as investors scrambled for equity. We have now slapped straight back down below $900 once more (rather backing up our comments about an almighty battle going on at these levels). The Gold spread is now $30 off Monday’s high at $896.8-$897.3. The last attempt to go further down failed at $895 so buyers will be hoping for support here. If the support at $895 fails, the bulls will then be looking at the stronger support at $885.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 12 Feb 08
And the world is shocked by tip top UK Producer Input and Output prices and will no doubt somehow managed to be surprised by the CPI numbers out today at 09.30.
hmm....let me see...base metals double...oil double...wheat treble...corn blah blah blah. And on the other side Sterling is now lower than it has been for a year. I do not have a degree in Economics but even I can see that this does not add up to falling input prices. Output prices are also suffering, as there is a limit as to how much producers will absorb in margin, but the diminishing effect of raw material prices on the finished product can be deduced by the fact that whilst input prices are at around 18% output prices are below 6%.
Retailers will absorb their share of these rises as well so this will probably translate into shop floor increases of between 2.5 and 3.5%.
No doubt these same economists will be stunned in a year’s time by the fact that these same numbers will somehow reduce as magically as they arrived in the first place (assuming commodity prices do not continue to rise at this rate). The Bank of England will get plaudits for holding interest rates high and only a few people will sit around wondering why manufacturing investment continues to drift towards cheaper borrowing environments. When manufacturing margins are so low every quarter point on interest rates matters and the UK has had borrowing levels some 2% above Europe since the advent of the Euro even though our inflation rates have, in general, been similar.
With money growth (M4) in the region of 12% (as it has been for several years) we should be surprised that inflation is not at much more frightening levels. It is not the blunt instrument of interest rates that we ought to be looking at but more the nail studded club of tighter money supply. Of course the credit crunch may well do this job for us!
This morning the FTSE looks to be reversing yesterday’s falls as we call the market 50 points up on the off with the FTSE 100 spread at 5755-5756. This means that we have bounced off the 5700 level once more and this support will become increasingly important. Of course this is something of a double edged sword. Although it will give buyers some confidence to come in and pick up a bit of stock, it also gives the bears a target, that is quite close, to attack. The weakness was most evident in the banking stocks once again and the reduction in capital values of the financial sector might become a cause for concern as the economy tries to climb out of the current slowing effect of the credit crunch and, raw material inspired, inflationary spiral.
Talking to some market makers yesterday there seems to be some solid selling of Equity Put Options at prices that afford current good value. If the Puts get exercised presumably the buyers will want to own the stock at those levels anyway.
Sterling is also holding on to the recent lows with more buying in the low $1.94’s inspired by the hope that the BOE will keep rates high. The Euro made an abortive attempt (just before yesterday’s inflation number came out) to break above £0.75 level but this was swiftly smashed back on the release. For the time being, traders are likely to be nervous of being the first ones to buy above £0.75.
Oil continues to rush around. My hope is that, with winter out of the way and a, possibly, slower world growth scenario, we might draw back from the brink of permanently higher prices. In two and a half trading sessions March Brent Crude Oil managed to rally almost $8 as traders failed once more to break through the $86.25 to $86.50 support levels. The market has now bounced (strongly) four times from this level and it is beginning to look a very tough nut to crack. This morning we open the Crude Oil spread at $93.21-$93.26 in very quiet activity. Whilst the downside looks well supported, the converse is also true with $94.60 setting itself up as a good point to get out. Both these support and resistance areas may restrict trading but if either gives way then they may well trigger the next major move.
Spread Trading, 11 Feb 08
Markets look to be coming in on the weak side this morning which is disappointing after late activity on Friday gave hope that a base had been reached. The problem has not so much been any particular new piece of information on the UK economy but from the almost universally gloomy statements from the meeting of the ‘great and the good’ at the G7 Finance ministers get together. Forgive me for being a little dense but didn’t they all have time for a chat at the Davos beano a couple of weeks ago?
Whilst the rest of the world fears a serious slow down, Capt’n Darling can be heard propounding the almost ludicrous theory that the UK is safe from any global influence. Err… yes this is the same country that has the huge, and growing, public sector and trade deficits, a manufacturing base of just 13% of total output and a financial sector (on which the rest of the economy clings like limpets) that is being dealt a series of hefty blows from Credit Crunch to Non Dom tax hikes.
As has been mentioned many times in the press and analysts’ publications one of the main problems is the huge parasitic organism that the public sector has become. Whilst a robust state sector is a desirable asset of any nation, the UK model has become a monster of ridiculous proportions. Private sector productivity has gone up year after year in an unbroken chain for many decades but the Public sector has actually fallen over the last ten years, not just last year or the year before BUT for ten whole years. This must make the change in output of the average public sector worker (on a cumulative basis) over 50% lower than his counterpart in the private sector. Unfortunately, whereas in the private sector a situation like this would call for cuts to survive, the one thing we can be sure of is that “ the axeman will never cometh” as far as this government is concerned. Any problems? Throw another few billion at it!
Watching the public sector hand out massively paid ‘non jobs’ on an almost continual basis has been a frustrating experience for those running tightly controlled businesses only to see 30% of the profits swiped in a sort of legalised highway robbery called corporation tax and then, if they want to pay a dividend with what is left, watching the same government tax that same profit once again (making the cumulative tax on distributed profits over 50%).
Anyway...turning to today’s markets we are calling for the FTSE 100 spread to come in around 45 lower at 5739-5740 as we react to the falls in the Far East earlier and the weakness in the US on Friday night.
Our Spread Betting Account holders have a very two way outlook with buyers virtually matching sellers on our books on almost all major indices (Dow, S&P, Dax, FTSE and Nikkei). This is not to say there is little interest either. We had more open positions over the weekend than at any time since the start of the year.
There is heavy support in the FTSE between 5690 and 5705 and we bounced four times from here on Thursday and Friday. It also proved solid in the last week of January. If we go for the down side from the open today then this may well give some pause to the bears. On the upside, bulls will be hoping that we can close above 5820 which has proved something of a ‘cusp’ point for the last three weeks.
Sterling having consolidated the falls of Thursday is now probing the downside once more with the Euro cross threatening the 0.75 level again. The EUR / GBP spread and is 30 pips higher at 0.7486-0.7488. GBP / JPY is also sloping to the down side after recovering slightly from the huge post-Christmas falls. The trend is beginning to look bearish once more and the cross is some 80 pips off at 208.08-208.16. Support is at 208.00, 207.40 and then 205.90. With the Bank of England continuing to worry about inflation the prop of high rates is likely to remain for some time but it is beginning to look a trifle worm eaten.
And finally...the Gold Market is some 4 bucks up today as dealers ignore the Central Bankers agreement to permit the possible offloading of some $92 billion of IMF gold reserves. Bulls are, as ever, in command and we are probing the mid $920’s resistance levels with the gold spread $922.9-$923.4.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 8 Feb 08
Well the BOE lived up to expectations and we now sit with interest rates ‘merely’ 2.25% above the US and some 5% above Japan and even 0.75% above China (growth 10%, inflation over 6%!!).
With Forex Traders hunting in packs for possible rate reducing central banks there are few arguments for using high rates to prop up your currency. The nature of trading is usually to buy the rumour sell the fact. Witness the rise of the dollar since they cut rates unexpectedly over the past few weeks. When markets see a possible long term decline in interest rates there is always the tendency to sell the currency concerned causing an overall negative trend.
Today the FTSE is looking to rebound some sixty points from the close yesterday as investors try to recoup some of Thursday’s 150 point fall. The retreat, triggered by the 0.25% cut from the Bank of England, always looked overdone for the session and punters were hoovering up distressed stock in late trading yesterday. The Capital Spreads Account holders were especially interested in Banking and Telecoms stock after they suffered heavy selling in early afternoon action. Banks are not known to be natural dividend slashers so plus 7% looks very attractive in the current weakening interest rate environment.
The early FTSE 100 spread is at 5775-5776 but it would not surprise to see more on the plus side after such a gloomy week. Early action has a habit of failing to predict the eventual direction of the markets so it would be wise for traders to not get too carried away with any attempt to ‘bottom pick’.
As feared over the last few weeks, Sterling has taken it on the chin once more as the Dollar rebounds. The GBP / USD spread is now down at $1.9431-$1.9434 and the bears are in control for the moment. There is some support just below $1.94 from where we bounced yesterday and this morning, so in the absence of much news today, we may at least have a pause for breath today (fingers crossed).
The big loser over the past two days has been the Euro. Whilst Germany might be calling for higher rates the rest of Europe is crumbling under the weight of a strong currency coupled with a (relatively) tight fiscal stance. The normal band aid of currency depreciation for the ‘Garlic Belt’ is no longer available now that they are part of the Euro and in the absence of any serious attempts by their national governments to rein in spending they are now suffering badly. Up to now the ECB has stood aloof from their cries for help but suddenly there appears to be a crack in the façade and the olive branch of easier money seems to have been waved. Trying to tie so many variant economies into one package is not (and never was) going to be easy. The fact that the various work forces are so immobile (a Spaniard, with no German, will find it difficult to get a job in Germany) means that they are unable countenance population shifts as are possible in the States. Either all the countries have to agree a Central Economic Policy or the currency will always run the risk of splitting apart.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 7 Feb 08
The markets are looking to open pretty much where they opened yesterday with the FTSE 100 spread 25 or so points lower at 5845-5846. We spent much of yesterday in negative territory and only managed to close slightly to the good on a last minute spike to the upside. Trading remains cautious as punters continue to look out for shell shocked stock and pick up small bets hoping for a turn around as the big dividend season approaches. Not many analysts have forecast any cuts in first quarter payout expectations so the short term return horizon should be quite reasonable. It is not difficult to foresee some judicious buying of stock in the days before the ex-div date on some of the higher yielding stocks.
British Gas have, in this vein, upped their dividend by 30% this morning but it must be admitted that (for a utility) this is from a very low level indeed and is still giving less than 1% and is covered over 5 times by profits.
The Forex markets turned Euro bearish yesterday after the hawkish ECB sentiment took a more dovish tone. We can now look at a scenario of trying to pick which of the major currencies is the most weak rather than trying to pick one that is strong. Aside from the Swiss Franc (which is only a major for investment reasons) the other four all have their problems and very few virtues. As money piles up in the emerging and energy producing nations, mainly in a one way flow from the more mature economies we may now be looking at the beginning of a long term sea change on economic power.
Precious metals trading managed to shake off the falls of Tuesday and put in a stonking performance to recover much of the losses. Today they are doing reasonably on the open in Europe but are off the highs of yesterday and those set overnight in the Far East. The Gold spread is up $3 at $903.0 - $903.5 and the Silver spread betting market back over $16.50 at $16.61 - $16.64. The battle for Gold around the $900 level is becoming quite frantic with big swings on an almost daily basis. Although it must be admitted that a 1% move is now $9 bucks whereas a few years ago it would only have been $4 or so.
Crude Oil has given up on $90 dollars once again with the Brent Crude Oil spread now at $87.72 - $87.77 for the March contracts. We also have that rare (but usually bearish signal) where the Nymex Crude Oil price is under Brent. Dealers will be watching for a close underneath the $86.20 level, in Brent, as this would mean a break of the support line from November and December. We have bounced off this several times and whilst it holds the bulls should still retain the upper hand. It must be said, though, that we are now a considerable distance from the $100 level and the pressure seems to be building for a return to more normal levels.
Spread Trading, 6 Feb 08
After expressing the fervent hope that Monday’s activity might presage a calmer time for the markets the US brought out some truly awful news. Numbers for non-manufacturing sentiment and activity seemed to indicate that the US is not just in recession but swiftly moving into depression. Of course the fact that we all read and hear dismal stories every single day means that individual’s responses to this type of questionnaire tend to be influenced not by their own personal situation but by their perceived impression of everyone else’s.
The FTSE 100 proceeded to slump 150 odd points and this morning is likely to open another 40 or so lower. With no help, for once, from the Far East (which has occasionally managed to buck the western trends) the outlook on the off is rather grim. Put another record on please, this one is beginning to bore.
I had to have a smile when I read that ‘ethical funds’ were in fact just like ‘ordinary funds’ but without mining, oil, tobacco, ‘defence’ and airline stocks. If you take that lot out of the average portfolio the performance over the past twelve months must have been truly appalling. Mining and Tobacco in particular have been the stellar performers in recent times and without the aforementioned list you feel that the average ‘ethical’ must have been heavily overweight in financials, not the place to be. It is easy to lambaste the funds for not investing in ‘ecological energy’ companies, you know the ones ….creating some new source of abundant energy out of crops, wind, water, geo-thermal etc etc. The problem is (as every fund manager knows) there is just no money in the game. Virtually every single one goes bust leaving the well intentioned investors with nothing but a worthless share certificate.
On the same line I read with interest the new high powered electric cars coming to the market. The attraction in these vehicles is likewise a bit of a misnomer. They are not ecologically sound. They merely use a different form of energy which is one removed from a normal petrol/diesel engine. To power up the electric car you must plug it into the national grid, this energy comes from (wait for it) oil, gas and coal but you have wasted a huge amount in the transfer to your car batteries rather than the direct use in a normal engine. The only advantage is that you miss out on the huge tax that is levied on petrol. You are not saving the planet. The hybrid versions are a step in the right direction but it is estimated that because of the short shelf life of a hybrid engine that the production energy costs may very well outweigh the direct petrol energy savings.
With the markets looking grim this morning it is nice to see BHP’s bidding up for Rio Tinto as their offer goes aggressive. Shares are likely to go higher but with base commodity prices looking a tad toppy there is the fear that they are paying top dollar for the privilege.
BP’s poor numbers were somewhat assuaged by the hefty increase in dividend which should make for nice longer term returns (if you can survive the current turmoil). The fact that the year end figures came in worse than expected, the FTSE 100 shares fell 150 points and the price of oil fell a couple of bucks yet the shares ended the day on the side of the angels (just) bodes well for those who feel that a bottom may have been reached. The cost cutting in the management structure should add some billions to the long term bottom line. The BP share price is expected to come in this morning slightly higher again maybe around the 550p level.
Last August I wrote an article that revealed that the Capital Spreads Accounts were the longest they had ever been, with up bets outnumbering down bets by 15 to 1. Last week I was startled to hear from the risk desk that for the first time in the history of Capital Spreads these Spread Betting Accounts were net short of FTSE 250 stock. There were more negative bets than positive ones. It might be tempting to take this as an indication, possibly, that we may be reaching an equilibrium level for the current down turn.
GBP / USD renewed its weak trend after briefly looking perky on Monday and early Tuesday. We are now back at $1.9580-$1.9583 and our punters are selling into any up-ticks. Support remains in the low $1.9500’s but the bears still have the $1.92 level in their sights.
Gold continues to look weak as the dollar bounces and we are now solidly below $900 bucks with the gold spread currently at $887.7-$888.2. The major short term support is around $870, medium term at $840 and long term down at around $690. With gold we can fall a very long way and still remain in a bull market.
Advert:
FinancialSpreads.com >>
Live Prices and Charts, No Commissions, No Fees.
Spread Trade on Shares, Indices, Forex, Commodities and more >>
details.
|
Spread Trading, 5 Feb 08
Dealers were in a quieter frame of mind yesterday as the recent wild swings finally seemed to run their course. And in gazing into the (current rather foggy) crystal ball it is difficult to see what is going to crawl out of the woodwork next.
Today the FTSE is called to come in some 20 lower with the FTSE 100 spread around the 6000 level (a nice round number for us all to focus on). The resistance mentioned yesterday at 6060 held quite nicely throughout the morning and punters had a profitable time selling on every up tick and buying back on the re-tracements. There seems to be some reluctance to sell below the psychological 6000 level this morning and our clients are closing out shorts in hopes of a continuation of the recent move higher. We bounced three times yesterday (through the whole trading session) from the 5995 level and so this will be the early focus for day traders.
In an era of much higher crude oil prices it must come as something of a shock to investors to discover that the actual producers do not get much of the up side. BP has announced profits of $4.4bn which will disappoint. The fact is that higher oil prices (above a certain level) actually work against BP. Most governments have a cap on the returns for the oil companies. In many cases this cap was set in the 1990’s and is in the region of the high $20’s, any excess accrues to the host nation alone. Higher oil translates into higher costs (especially in the wild regions of the globe where much of the extraction takes place) without the corresponding upside to revenue.
The FX markets look to be quiet as well this morning after the Pound managed to claw back half of Friday’s losses vs the dollar. We are building a tight trading range between $1.9550 and $1.9950 and this may dominate trading over the coming days.
The price of Gold slipped again yesterday and spent much of the session under $900 before rallying towards the close to finish at around $905. This morning the sellers are in force again and we are back down to a gold spread of $901.5-$902.0 but punters are quick (as always) to buy on any weakness. The failure to close below $900 may be taken as encouragement for the bulls. However there seems to be a lack of positive impetuous at the moment and dealers will be looking at any failure to build on prices as a negative.
Spread Trading, 4 Feb 08
As February gets underway it is not often that you can start a commentary, so early in the year, with a statement that celebrates a two week rally in the FTSE that has added 750 points to the index from the lows and then follow this up with the line ‘only 400 more to get back to the starting point of the year’!
What is more worrying is the make up that has gone into the move higher. If we strip out the mining stocks the overall performance is rather worse with banking and oil still looking grim and pharmaceuticals, which started the year so well, now struggling to hold up. On the plus side, with the Pound weakening, the fact that some 70% of earnings in the blue chip index come from abroad should make those companies with solid foreign income look that much more attractive in sterling terms and at least bolster hard hit margins.
The rally on Friday was actually quite surprising given the pretty awful US Non Farm Payroll figure which actually managed to come in negative. The reason given for the move higher was that the adjustments for previous month’s numbers were much better than previously thought. Sorry to rain on the parade but as a purely independent observer this would seem to indicate an even sharper (and therefore more worrying) downturn in recent months. This may go some way to explain the indecent haste over the Fed’s latest rate moves.
Reading the papers and listening to the pontificating going on one would be excused for thinking that Callahan’s famous misquote "crisis what crisis" was the most appropriate term to be using. Phrases along the lines of ‘good figures for last year’s UK growth’, ‘Chinese and Indian expansion will continue’ ‘inflationary pressures building up’ which peppered the weekend press seemed to indicate a nicely robust economy thank you very much. The problem is that for a country the size of the UK with so much wealth creation and talent concentration tied up in one industry (the City), a balance of payments deficit that is beginning to look very grim indeed, a trade deficit that makes you wince every time you see it and a weakening currency held up only by unreasonably high interest rates there is very little leeway when things start to go wrong.
Today we are opening the FTSE 100 another 40 points higher as we follow the US and Far East higher. Having said that, we are running into some solid selling from our Capital Spreads Accounts on the pre-market quotes as some are slightly worried by the near $3 fall in crude oil and the drop in base and precious metals on Friday. In truth we may (finally) be in for a quieter day. The Capital Spreads dealers actually tested the phones on the open at 07.00 as they thought that they might not be working due to the lack of calls! There is some resistance in the index at 6060 (around where we are now) but there is not much until the 6175 to 6185 solid resistance levels which coincide nicely with the 61.8% Fibonacci retracement at around 6190.
My fears over the pound (well recorded here) came to fruition as GBP-USD trading dropped over 2 cents and we returned to over 0.7500 vs the Euro. The only thing stopping a clean sweep was the fact that Yen trading has slipped a bit this morning which has recouped some of the falls made on Friday. With the MPC still sitting on a tight (by global terms) fiscal stance all we have to look forward to is the prospect of falling rates. It is the expectation of lower rates which tends to weaken currencies, not the actuality, unless you are stuck at virtually zero for ten years like the Yen. Until the BOE cuts to a level that is seen as a bottom we may be looking at a long term decline in the Pounds fortunes.
As mentioned earlier, Gold made a dramatic drop in just a few minutes on Friday which rather pleased this commentator as only that morning I had mentioned the tightening up of the previous few days ranges (leading to speculation of a break out). There seems to be some solid support this time at just below the $905 level and we spent much of Friday afternoon (and evening) bouncing off it in a series of descending spikes. This type of activity would normally inspire thoughts of another break to the down side. However Gold is a bit different and we may get a swift return to the highs just as easily as a shift into negative territory.
No political bad news on oil and a slowing economy in the States left the black stuff with nowhere to go but down. Reading Mr Ambrose Evans-Pritchard’s comment in today’s Telegraph gives a strong indication of the knife edge that economies such as Russia are in over the price of Crude Oil. The temptation for producers such as these to sell as much forward supply as possible at current prices must be very strong and there is a strong possibility that $100 bucks a barrel will just be a memory in a few years time.
For the latest spread trading update from Simon Denham click here.
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.
'Real-time Spread Betting Prices and Charts' by DB, updated 15-Feb-08
For related pages also see:
Financial Spread Betting Companies, updated 20-Nov-08
We've updated the comparison tables to compare more markets, more FX, more commodities, more Indices, more...read article.
Spread Betting Offers, updated 20-Nov-08
The latest financial spread betting offers. Worth a quick look if you're thinking about opening a new spread betting account....read article.
Spread Betting Newsletter, updated 20-Nov-08
Q) Average Trading Results?...A) Get free spread betting tips, price updates, offers, important news and more!...read article.
Financial Trading Directory, updated 22-Jun-08
Who to trade with? It's a tough question. Have a quick look to see who offers the spreads and service to suit you....read article.
August Spread Trading Hours, updated 25-Aug-08
August Spread Trading Hours, make sure you do not get caught out. The Financial Spreads opening hours provide an example of what you can expect...read article.
Financial Spread Betting June 2008, updated 06-Jun-08
Spread Betting market trading update: The banking sector took it on the nose once again yesterday and HBOS is now 55p below the LOWEST point on the day of the bear rumour which caused so many headlines back in March. Barclays has experienced nineteen negative trading sessions in the last twenty and you could now pick up...read article.
Financial Spread Bet May 2008, updated 23-May-08
Spread Betting market trading update: This is likely to result in a double squeeze on retail spending through the remainder of this year. That, I fear, is likely to leave those retailers on highly leveraged debt levels in something of a pickle. Banks are not exactly...read article.
Financial Trading May 2008, updated 09-May-08
Spread Betting market trading update: As mentioned several times over the past few days the FTSE is struggling to overcome the 6250 resistance. Although we have closed at or around the level several times traders have shied away from buying above the line. The pressure still appears to be very much on the upside but we are vulnerable at the current level to some bad piece of news. Mind you, markets do seem to have finally got shot of the...read article.
Financial Trading April 2008, updated 25-Apr-08
Spread Betting market trading update: We are still stuck just under the 6100 level this morning but the bulls seem to have the best of it at the moment. Every time we get up to this level it seems as though the break out is imminent only for traders to run...read article.
Financial Spread Bets April 2008, updated 11-Apr-08
Spread Betting market news: FinancialSpreads.com clients have been building up short positions in indices over the past few days so they will be glad to see the market dipping back below the 6000 level this morning. This morning the market has wiped out only half of the gain it made yesterday and whilst this cannot be considered as profit taking, it indicates the ...read article.
Markets March Spread Trading, updated 28-Mar-08
Spread Betting markets: Markets went up down sideways etc but in the end closed pretty much mixed. Europe up about a percent and the US and Americas down a percent. Asia has joined Europe but not enough to influence the open this...read article.
Markets March Spread Betting, updated 14-Mar-08
Spread Betting market information: If the moves by the US do in fact work then this should help across the board. Many punters will be shy of getting too enthusiastic as we have seen these rallies too often over the past few...read article.
Markets February Spread Trading, updated 29-Feb-08
Spread Betting market information: Today we are looking at further opening falls with early the FTSE spread trading at 5945 - 5946 another 15 points lower. The volumes on the exchanges remains weak which is causing such heavy moves as market makers swiftly adjust prices. In conversation with some of the quoting brokers it appears that they are running...read article.
Real-time Spread Betting Prices and Charts, updated 15-Feb-08
Spread Betting pricing information: The banking sector, which has been pretty hard hit anyway, took a triple whammy this week: UBS reported almost unbelievable sub prime/credit losses, Bradford and Bingley reminded us that there are...read article.
UK Markets Spread Trading, updated 01-Feb-08
UK Markets Spread Trading : When the going gets tough the blame game begins and one of the easy targets in every period of uncertainty is the banks. You can hardly open a newspaper today without reading some journalistic outpouring, railing against the evil conspiracy of global money. It might be a good moment to point out that...read article.
Spread Betting on Markets, updated 18-Jan-08
We answer your Spread Betting questions, plus offer tips on getting free Spread Betting charts, real time prices and...read article.
Spread Betting Trading Online, updated 21-Dec-07
Find out where you can Spread Trade online for free, plus your Spread trading questions answered, tips on getting free Spread Betting charts, real time prices and...read article.
Spread Betting Futures Trading, updated 07-Dec-07
Where to trade plus updated Spread Betting trading news and the most popular Spread Betting questions answered....read article.
Spread Betting Broker, updated 23-Nov-07
Where to find free Spread Betting Brokers plus regular Spread Betting financial trading news as well as the most popular Spread Betting questions answered....read article.
Spread Betting Platform, updated 09-Nov-07
Where to find free Spread Betting Platforms plus updated Spread Betting trading news as well as the most popular Spread Betting queries answered....read article.
Spread Betting Software, updated 26-Oct-07
Where to find free Spread Betting Software information plus updated Spread Betting trading news as well as the most popular Spread Betting queries answered....read article.
Spread Betting Prices, updated 12-Oct-07
Where to find free Spread Betting Prices plus updated Spread Betting news as well as your top Spread Betting questions answered....read article.
Easter Trading Hours, updated 04-Jul-08
Easter Financial Spread Betting Hours. Ensure you are not get caught out. The Financial Spreads opening hours provide an example of what you can expect. However please...read article.
Trading Hours Presidents Day, updated 18-Feb-08
A quick look at the President's Day trading hours. FinancialSpreads.com's opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting brokers...read article.
Holiday Trading Hours, updated 22-Dec-07
A quick look at the seasonal trading hours. FinancialSpreads.com's festive opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting providers...read article.
Spread Betting Comparison, updated 01-Oct-08
Spread Betting Comparison Notes...read article.
Financial Trading Email, updated 31-Jan-08
Free financial trading email. Unsubscribe easily and immediately....read article.
Compare Spread Betting Companies in the UK, updated 27-Jul-07
We provide you free online information on the UK financial spread betting market. Financial spread betting allows you to bet on the key financial markets. Spread betting can give you an edge because the profits that you make from financial spread betting...read article.
Compare UK Spread Betting Companies, updated 03-Sep-07
Compare the width of the key spreads offered by the spread betting companies. Does your company offer the narrowest spreads?...read article.
Financial Spread Betting Articles, updated 03-Oct-07
Hundreds of spread betting articles from the latest news to spread betting tips to how to spread bet to where to find the latest prices, free charts and...read article.
Financial Spread Betting, updated 13-Nov-07
Welcome to Clean Financial - the financial spread betting and trading website. Get free spread trading news, tips and strategies, company reviews, discover important account options and more....read article.
|
|
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
|
|
