(Just a pretty picture, trading platforms don’t really look like this)
19 November 2017: Quote of the Day“I know I haven’t had the easiest of relationships with Gordon Brown…some of his supporters blame me for backing Tony Blair” – Peter Mandelson, 2004
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18 November: Trading the Week Ahead and the UK Autumn BudgetBelow, a useful 9 minute video looking at the week ahead and the current weakness in the European stock markets.
17 November 2017: Mueller Probes and GBP/USD Seesaws
Bitcoin Hits $8,000 and Financial Conduct Authority Warns on Cryptocurrency Tradingwarning It’s been another extremely volatile period for Bitcoin and the regulator has issued a statement saying cryptocurrency spread betting and CFDs are “extremely high-risk, speculative products”.
Anyone reading, SpreadBetMagazine will know we like leveraged trading but are very much against cryptocurrencies trading.
These markets are simply too volatile for leveraged trading.
The intra moves are probably still the ones that hurt most people though. The market is easily swinging $500 up AND down in a single day:
$500 up AND down in under 24 hours…Also see:
Good News on Binary Trading… Finally Some Regulation!thumb_up The FCA has said it will regulate Binary trading (aka binary options) from 3 January 2018.
There are a huge number of cowboys operating in the binaries spaces (and there will be plenty of cowboys operating after 3 January) but hopefully this is good news for investors.
If you are going to trade binaries (which is a bit of a strange product) then at least you’ll be able to choose an FCA regulated firm and should give you ‘some’ protection.
16 November 2017: The DAX 30 and Japan 225 Could Drop Another 10%
Both the DAX 30 and Japan 225 look quite vulnerable to further losses.
The two markets have added more than 12% in 2017 and that beats the most upbeat of forecasts.
There are concerns over high yield credit as well as a survey showing that investors are underweight in cash.
We could easily see more falls as portfolio managers lock in profits before the year end.
If there is a rush for the door, and no stabilisation in the next day or so, then another 10% fall could be on the cards.
DAX 30 Chart for 2017
Will the Support at 13,000 Hold?
Nikkei 225 Chart for 2017
Already 1,000pts Off Last Week’s High
Stock Market Volatility Up… But Still Low…Yes, market volatility is up but anyone looking for a “decent bit of volatility” will be disappointed.
The daily chart is showing we’re at the highest levels since 21 August:
Some caution is needed…
At the same time, the longer-term weekly VIX chart is showing that we’re still low compared with the last 4 years….
15 November 2017: Sterling and the FTSE 100 Say ‘Meh’ to New Jobs Data
Dollar Issues & Sterling Wilts Against the Euro
Commodity Sector Hits the FTSE 100
Spain 35 Back Under Pressure
14 November 2017: The Stock Market Problem with Trump’s Tax Reforms
As always, care is needed if you’re spread betting on the stock market (or any other market).
The markets are looking soft and a lot of that could be due to Trump’s tax reforms not happening any time soon.
“Tax reforms” this side of Christmas look unlikely and the Donald isn’t helping.
Why not take your profits if the cuts are still priced in?
warning Is there pressure on the markets to drop?
For more, see our review: Cut, Cut, Cut – The Stock Market Problem with Trump’s Tax Reforms.
New Video Looking at Why You Could Short GBP/USDAhead of next week’s Autumn Budget we’ve added a new video discussing the potential to short GBP/USD. The 8 minute video is on our GBP/USD guide page.
European Stock Markets Looking Softtrending_down We saw some sharp falls in European markets last week and they were pretty soft yesterday too.
The FTSE 100 fell to a 6 week low and, before rallying, the EuroStoxx 50 fell to its lowest levels since September.
No Obvious Reason for the Sell Off?Economic data is looking reasonable with Eurozone Q3 GDP expected to stay at 0.6 (today is just the second reading of Q3). Likewise, November’s ZEW economic sentiment is expected to increase to 19.8.
Is it just that with stock market valuations already looking high we need more catalysts to push them higher?
Without any foreseeable catalysts, and the US markets taking a breather, it’s understandable that traders want to lock in some profits before the end of 2017.
Sterling Hit By Blustery ConditionsSterling took a hit yesterday as Machiavellian politics (is there any other kind?) continue to envelop Theresa May.
The pound did have a decent bounce off the longer-term support but that support could easily be tested again.
warning Be careful if you’re trading Sterling based markets (that includes the FTSE 100).
This week we have quite a bit of UK data including inflation (today), new unemployment and wages figures as well as October retail sales.
We also have MPs debating the EU Withdrawal bill and probably more shenanigans from the Tory party.
There is plenty of bluster that can cause unexpected forex moves.
See 10 Reasons Why Sterling Could Break Lower.
Chinese Data Looking OK and ‘That’ Alibaba NumberChinese data slipped a little in October as industrial production dropped to 6.2% from 6.6% month-on-month. October retail sales were 10% vs 10.5% expected.
While that’s a bit of a miss on retail sales, many Chinese consumers look like they were holding back for the “new tradition” of the November “Singles Day”.
starAlibaba reported $25bn in revenues for Singles Day, up 39% year-on-year.
That’s not a typo. Alibaba recorded $25bn! in revenues… for a one day. That’s a good day.
That also suggests the Chinese economy is still ticking along nicely.
13 November 2017: 10 Reasons Why Sterling Could Break LowerThe political pressure is mounting on Theresa May and that’s seen traders selling the pound.
The up-channel support for GBP/USD could hold but we’re not so sure.
But we’ve taken a longer look at the risks – see 10 Reasons Why Sterling Could Break Lower.
Will the Support Hold?
Selling Hits the Markets
10 November 2017: Financial Spread Betting Can Make You ParanoidThe BoE interest rate announcement last week caused a spike in both directions at 12pm e.g. the chart below.
Surely the “real” market doesn’t move like that?
This sort of move makes you feel like the spread betting companies are moving the market so that they hit as many Stop Loss orders as possible.
The reality is that the firms will normally just be tracking the underlying market.
At the same time, when you see a move like this, it doesn’t feel like they’re tracking the market.
We’ve taken a look at how you can easily check if your platform is playing fairly and what to do if they aren’t.
See Financial Spread Betting Can Make You Paranoid.
Stocks Under a Little Pressure: Risk-off Sentiment Dominanttrending_down10.30am update – This morning’s early stock market bounce has fizzled out and according to IG’s Chris Beauchamp:
This confirms that the risk-off sentiment remains dominant.It looks like everyone is waiting for a reason to sell and the markets are just nervous.
Apart from a potential hold up with US corporation tax reductions, the fundamentals driving the stock market rally haven’t changed (see below).
Yes, PE ratios are high e.g. the S&P 500 PE ratio is 25 compared to the long-term average of 14-15. But that’s not extreme.
Also, with interest rates so low, perhaps we should accept higher PE ratios. Not sure. That’s just a theory.
Buy the Dip? New FTSE 100 Spread Bettrending_up If we see the FTSE 100 drop to 7,000 then I’ll probably be buying. In fact, a drop to 7,200 will be tempting.
I’m not tempted to short though.
This rally has hurt a lot of bears, I don’t want to be one of them.
Stock Market Drivers… Still Driving…Again, the ECB is still printing money, Japan is printing more money and US earnings from key firms are good. Not just Apple, Amazon and Google but bellwethers like Caterpillar reported great Q3 earnings.
I wouldn’t want to sell into that.
warning Anyway, beware of some quick moving markets!
The Lighter Side of Trump’s CorruptionIt’s Friday and so we’re off topic again… for
There’s a huge amount of data on Donald Trump’s corruption and willingness to launder money. E.g. how Trump’s Taj Mahal casino broke anti-money laundering rules 106 times and then settled with a $477,000 fine – read more on CNN.
MSNBC’s Rachel Maddow also has a YouTube video covering: Sketchy Donald Trump Deal Eyed For Ties To Iran.
This story is great because Rachel Maddow rarely laughs but in this she can’t help but laugh at the Trump International Hotel & Tower in Baku… because it looks like… err…a lady’s… err.. private bits:
Really? WFT! Who Designed This?
For more on the corruption story, see Quora.com: Trump-Baka-Russia-Ties corruption.
Global Stocks Take a Hit After Volatile Japanese Session6am update – acording to David Madden of CMC Markets:
The selling that started in Asia 1 day ago sent shockwaves around global indices.
European stocks saw a severe bought of selling.
US markets also finished lower albeit without losing that much ground.
The major rally that the stock markets have been enjoying has managed to ignore many big issues e.g. Catalonia and North Korea.
Perhaps traders we just wondering could derail the current rally, well I think we’ve found that traders are happy to hit the sell button.
When Japanese stock market spiralled out of control, that just sparked an exodus – see volatile Nikkei 225 chart.
Yesterday’s falls should be put in context of the stock market surge over the preceding weeks and months.
I.e. the surge caused by additional monetary easing by Japan’s Shinzo Abe, some solid US earning and the extension of the bond buying scheme by the ECB.
The result has been multi-year highs, or all-time highs, for many stock market indices.
The profit taking is hardly a surprise.
9 November 2017: Worth Shorting the UK Retail Sector?The UK retail sector is having a bit of a nightmare.
We’ve taken a quick look at some of this week’s results here: Worth Shorting the UK Retail Sector?
An ugly morning for the UK retail shares:
Prices as of 9.45am – 9 November 2017
9 November 2017: Déjà Vu as Snap Gaps Lower… AgainNews that Tencent had built a 10% (non voting) stake in the US tech firm didn’t save the stock from gapping lower on c**p Q3 data.
After the gap and some volatile trading, the stock moved lower again.
Nevertheless, the new share price is unjustified and I’m still bearish.
Déjà VuSee our Snap trading view update.
3pm Update on Snap Inc.
And the stock has gapped lower again on today’s open albeit only a 30 point (30¢) gap.
Low Stock Market Volatility? Not the Japan 225There were big overnight moves in the Nikkei.
It almost looks like a fat finger error.
23,000 still elusive
See Nikkei 225 spread betting update.
Elsewhere… Mind that Gap!
US Markets Closed Higher… JustIt could just be a quite economic calendar or perhaps the fact that investors are concerned about losing statewide elections on New Jersey and Virginia.
Unpopular Republicans could have issues pushing through President Dumps “tax reforms”.
(President Dump is not a typo).
At the same time, stock markets are very short-termist. If the markets are worried about losing the potentially huge corporation tax reductions… that’s a consideration for another day.
If losing a pair of sunglasses is annoying, what’s it like to lose $40m on sunglasses?
8 November 2017: Snap Shares Drop 20% Or Do They?trending_downThe Snap share price took a beating in after-hours trading and dropped about 20%.
There were a few shocks in the Q3 results including Snap writing off $40m in sunglasses… Oops.
I really want to short the Snap stock, the circa $15bn valuation is completely wrong.
The stock can hold up well, e.g. it didn’t take long to rise after the horrible Q2 results.
warningAnd the huge Chinese tech firm, Tencent, has confirmed it’s built up a 10% stake.
3pm Snap UpdateEven Tencent buying at 10% stake in Snap can’t save it from an 11% drop.
The share price is down $1.60 (11%) from yesterday’s close.
See our full: Snap trading update.
Crude Markets and Technical AnalysisWatch out for increased Middle East tensions boosting crude oil prices.
We’ve seen the Crown Prince consolidating power but he’s also lashing out at Iran.
The Crown Prince is claiming that Iran are backing the Houthi militia in Yemen. He described that as a “direct militarily aggression [by Iran]”.
As usual, weekly crude oil inventories are out today at 3.30pm (UK time). Oil inventories are expected to see a draw of 2.9m barrels.
Technical Analysis on OilWe also have a new 4 minute crude oil technical analysis video.
Watch Out for Market Reaction to US Statewide Elections
warning Democrats have won two significant Governor’s elections in Virginia and New Jersey.
These are the first Statewide elections since Trump became president.
This looks like a strong move towards the Democrats (and turnout amongst Democrats looks high).
The markets do like some of Trump’s policies, i.e. less red tape, lower corporate taxes etc.
If these political swings continue into late 2018, and the Democrats have good mid-terms, then the stock markets could lose the benefit of the ‘Trump Bump’.
Having said that, a strong swing to the Democrats will restrict that damage that Trump can do and that’s a wonderful thing.
US 2018 Mid-Terms: 6 November 2018
All 435 seats in the House of Representatives and 33 of the 100 seats in the Senate are up for grabs.
The vast majority of the voting takes place on 6 November.
Watch out for Trump getting angrier on Twitter and possibly distancing himself from “losers”.
You Know It’s A Quiet Trading Day When……you write about the monthly Chinese import / export data.
China’s October imports increased by 17.2% vs 16% expected. Exports rose by 6.9% vs 7.2% expected.
That’s a bit of a slow down from September’s 18.6% for imports and 8.1% for exports.
Either way, the new data doesn’t seem to be doing much to the markets.
Having said that, the miners like Anglo American, BHP Billiton and Rio Tinto have seen a good start this morning.
7 November 2017: Wall Street Bull-run ContinuesEarnings season is still going on albeit with most of the biggies out of the way.
Just in case earnings weren’t enough to drive the bull market we also have some rather large M&A action:
Crude Oil Back in the Financial Press (after returning to June 2015 levels)See our crude oil spread betting update: Crude at Fresh 2 Yr High But Can the Saudi Crown Prince Copy Xi Jinping?
6 November 2017: New Spread Bet on GBP/USDIt looks like GBP/USD has bounced off the support (bottom) of the channel that’s been in play for the last year.
I’ve opened new small buy – see GBP/USD spread bet.
Not a perfect channel but…
6 November 2017: Mediocre US Jobs Data But US Stock Markets Still Close at Record Highs
3 November 2017: Has Someone Hijacked Donald Trump’s Twitter Account?I know he’s trying to distract with the whole Hillary-Clinton-Uranium-One story but the irony of Trump tweeting this is off the f***ing charts
(The rest of the World deserves it too)
3 November 2017: GBP/USD Channel Still Holding… JustLet’s see what happens with today’s NFP but if the channel holds then a small buy of GBP/USD is tempting.
See GBP/USD Spread Bet Suspended for NFP.
It’s Not Just About Non-Farms Todaytrending_upThe FTSE 100 hit a three week high yesterday as the pound slumped, we also have more good corporate data and a new Federal Reserve Chair-elect.
Ahh the Sweet Taste of Success (and a huge chunk of a very profitable market)Expect a sharp increase in Apple’s share price on the open.
(Apple had a rather good Q4 and there was a solid buying in after-hours trading).
See our quick Apple Q4 headline numbers update.
Musical Chairs – The Little Fingers Have Pressed StopThe big forex spread betting news is that Trump has chosen Jerome Powell to be the next Federal Reserve Chairman (assuming Powell passes the Congressional interview – which he should).
As discussed previously, Trump couldn’t stand a strong woman like Yellen and, like most leaders, he’d want a dovish person fronting his loose monetary policy…
Who cares if the loose monetary policy leaves a nasty mess for another administration?
Also, according to David Madden, Market Analyst, at CMC Markets:
Powell feels that some of the financial regulations brought in after the credit crunch have served their purpose. The Chair-elect believes some of it could be rolled back.
Of course, as a “Wall Street insider”, he would think that.
Today’s Non-Farms? Expect a Smack if the Numbers Are PantsThe US NFP is out at 12.30 UK time and could cause a dull morning.
A lot of the hurricane disruption will have dissipated and so the consensus for October is a rather large 310,000 jobs (compared to a 33,000 drop in September).
Unemployment is expected to stay at 4.2%.
warning Watch out for the average wage growth which is expected to slow to 0.2% from 0.5% month-on-month, and drop to 2.7% from 2.9% year-on-year.
Poor wage growth = less inflation = less reason to increase the US rates = weaker dollar… and a weaker dollar impacts almost every spread betting market!
Today’s Spread Betting Theory?I only had a small buy of GBP/USD open this morning and I’ve already closed it for a negligible £2.35 loss.
I really don’t want an open trade over the NFP – like yesterday’s BoE announcement, there could be a painful spike in both directions.
The £2.35 loss seems like a bargain.
The hurricanes have messed up the NFP data and so analysts are taking September and October and averaging them out. Hence the high October reading.
There are too many assumptions in this.
(although potentially re-opening my £0.5 spread bet long of GBP/USD after the NFP).
And Finally… Donald Trump Jr. is Still Painfully ThickIt was proven again this week that the apple doesn’t fall far from the tree.
Donald Trump Jr. made a great blunder on Twitter and some of the replies are brilliant.
See Donald Trump Jr. schooled after Halloween tweet.
2 November 2017: Thought of the DayIt’s occurred to me that there’s a good reason why Donald Trump loves white supremacists so much.
He’s not a racist… he’ll just need the Aryan brotherhood to look after him in prison.
It’s Mueller Time
Bank of England Raises Rates & Sterling FallsAs many expected, the BoE voted 7-2 to raise rates, that the first UK interest rate increase since 2007.
After the news came out, Sterling dropped sharply.
The key is that in their statement, the BoE removed the line that “interest rates may have to rise faster than markets currently expect”.
According to Michael Hewson of CMC Markets:
The removal of the “faster than markets currently expect” line suggests that further rate increases are likely to be pushed way back into 2018.
This is about as dovish a hike as you can get.
Stat of the Day: Apple’s Finance Arm is Half as Big as Goldman Sachs!Yes, that’s half of GS and they’ve traded $1.6trn in securities since 2011.
Wow. For more, also see Apple’s Finance Arm is scarily big.
New Technical Analysis of the Spain 35If you’ve not had your fingers burnt on the Spain 35 then there’s a new 6 minute technical analysis video reviewing the index (I’m currently typing this with bandaged fingers).
It’s interesting to see CMC Markets’ analysis discussing the same channel we have been looking at.
Alas the trading theory is
See Spain 35 spread betting analysis.
1 November 2017: Spread Betting Rebates TimeIt’s the start of the month so if you’re looking for tighter spreads then try of one of the financial spread betting companies that offers a reasonable trading rebate.
As usual though:
For more details see our: guide to spread betting rebates.
Trump’s Little Thumbs Have Been Busy AgainThis time he’s been tweeting about coal production increasing.
Stock Market Volatility Still Close To LowsJust a quick check of the VIX shows we’re still hovering around 10 and so not far off all time lows.
1 Week VIX Chart
1 November 2017: US Markets Up 7 Months in a RowElsewhere, October also saw:
Today we have UK manufacturing PMI numbers for October – expected to be close to September’s at 55.9
According to Michael Hewson of CMC Markets:
Manufacturing has been a bright spot and the markets expect that to continue.
A weak number could cloud tomorrow’s BoE rate decision and therefore undermine the pound’s recent gains.
Also note that that Michel Barnier, the EU’s Brexit negotiator has said he’s ready to speed up Brexit talks.
New US Jobs Data and Today’s FOMC MeetingHurricane season saw the September ADP Jobs report drop to 135,000 from 237,000 jobs.
The October report is expected to show a solid rebound to 200,000 jobs.
Today’s FOMC meeting could be pretty a low-key affair albeit with a lot of speculation over Janet Yellen’s successor.
I’m not sure how Janet Yellen is still in the picture. Her fairly stable but loose monetary policy would suit most Presidents.
Alas, the idiot Trump is not like most Presidents:
Anyway, most of the focus will probably be on next month’s FOMC meeting when the Fed is widely expected to raise interest rates by another 0.25%.
Trumpkins are back!
And Don’t Forget…
Also see Donald Trump videos.
For more, please see Dear Spread Betting Diary.
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