Spread Trading 21 22 May 2008

Spread Trading 21 22 May 2008

UK Market Comment, 22 May

Closing comments from Tim Hughes, Head of Sales Trading, IG Index:

It has been another directionless day for London with the FTSE 100 broadly unchanged going into the last hour of trading.

As has been the case over the last couple of days, the market has struggled to find any real direction and the net result has been the FTSE 100 index flopping around the 6200 mark.

It is indicative of the sort of day it has been that the normally sedate mobile telecoms giant Vodafone has managed to make it to the top of the blue chip gainers list for the day, with a rise for the share price above 3%. This was on the back of news out of Italy that meant that its tariffs here will end up being reduced by less than previously expected. That cheered investors and left some hoping for a run back to the early February levels of 180p.

Although UK and US markets have come under the cosh this week, both are reasonably supported just below current levels. As mentioned a few times in the past, traders continue to view the 6150 area as something of a floor for the FTSE 100 index. Dips below here continue to bring the buyers out - although recent days have seen a tendency to snatch at any quick profits. With little of any significance on the economic calendar for Friday, a quiet end to the week ahead of the long weekend is in prospect. The jury still out on whether there is more to come from the recent recovery.

For details on how to spread bet on:

The FTSE 100 and where to find free FTSE charts etc >> FTSE 100 Spread Betting
Vodafone and where to find free Vodafone etc >> Vodaphone Spread Betting

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 8000 markets, narrow spreads, advanced charting,
24 hour spread betting ..." » read IG Index review.

UK Market Comment, 21 May

Closing comments from David Jones, Chief Market Strategist, IG Index:

Going into the last few minutes of trading, it has been a choppy day in London with the FTSE 100 still flipping around the 6200 mark.

When it comes to individual stocks, the main drivers for today’s occasional flurries of strength were the miners and oil giants – the opposite of yesterday where weakness in both of these sectors dragged the index down.

The bigger news of the day was the release of the minutes from the last Bank of England meeting, with the MPC voting 8 to 1 in favour of keeping rates on hold. Mr. David Blanchflower was the only one voting for a cut and he would seem to have a more optimistic opinion on inflation than many. He was quoted as saying that the current increase in inflation will have little tendency to persist. Arguably a view not as gloomy as the rest of the market, so maybe he knows something that the rest of us do not. Either way, the Bank made it quite clear that inflation was the target for the foreseeable future which should put paid to any hopes for further rate cuts in the coming months unless the economic situation takes a significant nose dive from where we are now.

Maybe this stance will knock the wind out of the bulls’ sails in the days to come but today has offered no real further insight as to whether the two month rally is starting to reverse. For now, weakness back into the 6150/6200 zone by the FTSE 100 still proves to be too much of a temptation for buyers - although today’s rally has proved to be short-lived. It would still probably take a move below this zone to signal that the bulls have left the building for now, and a more significant slide could be on the cards.

For details on how to spread bet on:

FTSE 100 and where to find free FTSE 100 charts etc >> FTSE 100 Spread Betting

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 8000 markets, narrow spreads, advanced charting,
24 hour spread betting ..." » 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.

'Spread Trading 21 22 May 2008' edited by TH, updated 22-May-08

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