It’s been a while since I last posted and I ‘m trying to remember what has happened. I think last time I posted the FTSE had just tanked 240 odd points. Well since then it seems to have stabilised somewhat. With 5000 proving to much to penetrate in a meaningful way, could 5000 be the support level required for a bounce? Personally I don’t think there is enough good news in the pipe line to give a meaningful rally to cause a new bull market but hey what do I know. I’m sure something will probably happen to spark a rally from the bulls. With the recent down move failing to make a new low I’m not really sure what will happen now. As ever though I am not in the habit of trying to second guess what the FTSE is going to do, although I do like to speculate. Nope I prefer to look at what is happening and trade accordingly. So what is happening with the FTSE? Well it would seem that the market is taking a breather to digest the massive moves we’ve seen recently. This consolidation behaviour seems to happen all the time. The question is where will it go from here. It’s too soon to say a new sideways market is opening up, I would be leaning more towards potentially being in down trend mode. If the price falls below the most recent low then I would think a new down trends has been confirmed. Until that point I’m on still on the side of shorts as I just don’t see any news good enough on the horizon to drive the markets high enough. I know there are rumours flying around about QE3 from our friends across the pond but will this really prove enough?
Thanks to David and Chris for their comments left on my last post Gambling on the FTSE 100 & Pyramiding Spread Bets. On thing I would suggest to Chris is learn to go short. In my view one of the key benefits of spread betting is the ability to go short as well as long. There really should be no difference between the two in your mind. It’s good that you like to sit out the down moves but why not profit from them as well? Markets fall much faster than they rise and bug profits can be made from down moves as well as up. That said this is not advice. You can make your own trading decisions as I’m sure you do and will continue to do so.
Chris I’m assuming from your comment that you received the Naked Traders Guide to Spread Betting that I sent to you? Glad you enjoyed the read. I agree it’s aimed more at complete beginners but it’s certainly interesting reading about others trading stories.
My own spread betting is treading water at the moment much the same as the FTSE. I still only have two positions open with SpreadCo which are pretty much doing nothing at the moment. I keep checking for new trades but nothing is coming along, I think it’s because of the recent volatility. The super trend indicator is based on ATR which is a volatility indicator, therefore when volatility is high the price is going to be further away from the indicator and take longer to cross. There have been a few crosses but none that meet all my entry criteria. Still it’s fine with me, when the markets want me to trade they will let me know. I’ll be here waiting when they are ready, I’m in no rush.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
An end in sight to the Libyan conflict, oil to start moving to get the world’s economies moving-yet the DOW and Footsie looking quite bearish. We have to accept we are on the end of the food chain as far as news (or fundementals) are concerned and 99% of news is already priced into equities by the time we hear of it. that leaves us with technical analysis. I have spent many an hour listening to presentations from experts on candlesticks. Oh yes, the powerepoints are flowing with dojis, hanging men, inverted hammers etc and look how the market moved as it should after that doji. Yet the current charts I study DAX, FTSE and DOW do not bear (excuse the pun)out the current turbulence and the candlesticks seem to be burning both ends with no clear message. Supports and resistances show (for the last 3 weeks) we are in a bear market. Take it a little wider and you’ll see we are still in a raging bull market (with a little dip) since 2009. Take it further from 1999 and we are in a long long bear market. Confusing eh?. Also who using technical’s would have foreseen gold droppong a few hundred dollars in a few days Harry, I am not saying throw all your technical tools out of the window (any strategy is better than none)but cover yourself,lessen the risk. Use diversity that you will find in indices, perhaps the Ftse 250, make time a friend and let it work for you, even if you have to wait a little longer. And use the Warren Buffett philosophy of getting quality stocks and holding. In spreadbetting terms, this might mean renewing quarterly spreads. I am presently on holiday in Wiltshire and am using a library computer and the filter system on the server here seems to not allow me to place any spreadbets (in technospeak it says trouble in connecting with the front end provider). This is good and further cementing my discipline at present in watching and waiting. My homework tells me a fall down and then up of the 2009 lows is possible, I may be out by the odd 500 points but I don’t expect to call market tops or bottoms.
About the new Pryor book on spreadbetting, how about sending it to your newest blogger- I wouldn’t mind reading it. As usual all this is my personal feel on things, you should never buy or hold any inverstment solely on what you see in my blog and I may have holdings in the investments I quote. I echo David’s sentiments -Harry , keep up the good work. and…keep positive.
Chris