US Indices Spread Betting Markets Rise as Dow Jones Passes 12,000
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The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 1 December 2011
Yesterday's comment ruffled a few feathers amongst some of our readership but at least it's good to know that people do read it.
Whilst politics and the financial spread betting markets don't always have a huge amount in common, those regular readers will note that this daily commentary sometimes likes to dip into a bit of politics. This is hoped to make for more interesting reading than anything else, rather than wishing to cause anyone to get antsy.
The pension reforms aren't a fantastic deal for those pensioners, of course they aren't, but I'm sure the majority of those out striking yesterday will agree that some sort of reform is required given the current predicament.
Markets remain in bullish mode this morning albeit not as much as yesterday in the early stages of this session.
US indices spread betting markets continued the party for the bulls into the night, rising over 4%. This brought the Dow back above the 12,000 level and to levels not seen since the last big rally during the month of October.
Many people are calling the current move a short covering rally, however at this time of year it'll be a brave investor to stand in the way of a possible Christmas rally.
As we commence the final month of 2011 few will want to go back over what has been a tough year for almost everyone, but when you've got the bulls charging little can stop them.
Last night's move in the US had its affect on Asian markets and that has followed through to European equities this morning.
At the time of writing the FTSE is trading at 5520 up by some 15 points from yesterday's close and naturally our spread betting account holders have been selling into the strength. Short positions in the FTSE index have been building up yesterday afternoon and overnight.
Lots of good news to focus on yesterday with not only the coordinated action from central banks to boost liquidity but the private payroll figure from the US was way above expectations.
This was followed by a very good manufacturing data which has given the bulls more cause for optimism ahead of tomorrow's final Non Farm Payroll of the year.
The move by central banks yesterday for some was seen more as a sign of desperation and something to be worried about rather than good news. You have to ask yourself just how close are some of Europe's banks to going under to cause such a move.
Only a couple of days ago a record amount of bank deposits were placed with the ECB as opposed to sitting in other banks, showing just how much the money markets were starting to freeze over.
This morning's strength also comes as a bit of a surprise when PMI manufacturing data from China declined for the first time in three years. Those clients who've sold into the FTSE are probably hoping this will lead to some sort of pull back.
For the FX spread betting markets, the risk on attitude naturally led to dollar weakness across the board yesterday with both cable and EUR/USD making good gains.
Cable got itself back above the $1.5700 level but this didn't last long and this morning we're back below at around $1.5650.
Levels to watch to the downside over the near term are $1.5625, $1.5530 and $1.5490 meanwhile to the upside resistance is seen at $1.5775 and $1.5810.
For the euro the single currency got itself back above $1.3500 against the US dollar but has also seen its share of weakness overnight taking EUR/USD back to $1.3440. Near term support is seen at $1.3395/60/05 and resistance at $1.3530/70.
Gold also benefited from yesterday's risk appetite as speculators picked up the precious metal pushing it to $1750. This morning the precious metal, like several of the riskier currencies, is just seeing a mild bit of weakness which has taken it to $1742.
The recent bounce off the $1670 level puts this as the major support level over the medium term. Those bulls that missed out on that bounce might be itching to get back in, just in case there's another big move to the upside.
Brent also saw some good strength yesterday in line with other markets as it just touched $112 before seeing some profit taking bringing it back to $110 and this morning it is just in the black at $111.00.
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.
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'US Indices Spread Betting Markets Rise as Dow Jones Passes 12,000' edited by SD, updated 01-Dec-11
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