Spread Betting Diary

Spread Betting Diary
Gender inequality – only women have handwriting this neat

The Spread Betting Diary

A lot of trading diaries are based on fictitious wins or worse. Our spread betting diary is different, we just give a quick personal view of the markets, political world and spread bets… good or bad.

Click here for the latest Dear Diary comments.

Please read the footer of our website re: “SpreadBetMagazine.com does not constitute investment advice etc.”

Thanks

Alex


More Spread Betting Diary



13 November 2017: 10 Reasons Why Sterling Could Break Lower

The 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

  • trending_downThe Nikkei 225 drops again. It’s now down 4.3% over the last 3 sessions. See Japanese stock market update.
  • trending_downThe German DAX is at a new 18 day low
  • trending_downThe French CAC is down 0.4%
  • trending_downThe Spanish IBEX is down 0.3%
  • trending_downThe Dow Jones is set to open 50pts down on fears that Trump’s tax cuts are going nowhere fast

10 November 2017: Financial Spread Betting Can Make You Paranoid

The 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 Dominant

trending_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 Bet

trending_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 Corruption

It’s Friday and so we’re off topic again… for good great reason.

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:

Trump International Hotel & Tower in Baku
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 Session

6am 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:

UK Retail Sector Taking a Hit
Prices as of 9.45am – 9 November 2017



9 November 2017: Déjà Vu as Snap Gaps Lower… Again

News 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.

Snap Stock Gaps... Again
Déjà Vu
See 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 225

There were big overnight moves in the Nikkei.

It almost looks like a fat finger error.

Japan 225 Bull Run
23,000 still elusive

See Nikkei 225 spread betting update.


Elsewhere… Mind that Gap!

  • trending_flatGold is still one to watch… but no trade yet.
  • trending_downThe markets are still seeing a few gaps… particularly companies and earnings misses. See examples of how shares gap.

US Markets Closed Higher… Just

It 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.

But…

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 Update
Even 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 Analysis

Watch 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 Oil
We also have a new 4 minute crude oil technical analysis video.


Watch Out for Market Reaction to US Statewide Elections

Grinning Idiot

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.


Right Now?

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 Continues

Earnings 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:
  • arrow_forwardIntel and AMD are ganging up on buy rival chip maker Nvidia
  • arrow_forwardBroadcom looks pretty keen on acquiring Qualcomm – both stocks closed up 1% yesterday


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?


Euro Ripples

  • trending_downIn a quiet week, yesterday, we had the services PMI reports for France, Germany, Italy and Spain. These were mostly revised lower from the previous flash reading – that’s a concern when services are pretty key to most Western economies
  • infoWatch out for the eurozone September retail sales figures – due at 10am (UK time). The data is expected to come in at 0.6% on a monthly and 2.7% on yearly basis
  • warningIf there’s a miss then we could see euro get weaker

6 November 2017: New Spread Bet on GBP/USD

It 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

  • trending_upWith Apple gapping higher on solid sales and the new iPhone X that’s pushed the NASDAQ 100 to 6297.6

  • trending_upThe Apple share price also traded at a record high, $174.26

  • trending_upThe Dow Jones added a nominal 0.10% to push to a new high at 23,557.

  • trending_upThe S&P 500 added 0.31% to 2588.4 (also a new high)

  • trending_upTrump might be looking for Japan to play fair but the Bank of Japan has confirmed that it’s still committed to ultra-loose monetary policy. USDJPY has hit ¥114.73.

    Also see: is a big USDJPY break out on the cards?

  • trending_upUS crude oil has pushed past the $56 marker on the Saudi “anti-corruption” purge.

  • trending_downThere’s little love for gold and the metal is approaching the critical support $1,261, i.e. the 200-day moving average.



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… Just

Let’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 Today

trending_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 Stop

The 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 Pants

The 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.

I’m out.

(although potentially re-opening my £0.5 spread bet long of GBP/USD after the NFP).


And Finally… Donald Trump Jr. is Still Painfully Thick

It 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 Day

It’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.

Robert Mueller to Arrest Trump?
It’s Mueller Time


Bank of England Raises Rates & Sterling Falls

As 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.

BoE Forecasts:

  • arrow_forward2018 UK inflation: 2.4%
  • arrow_forward2019 UK inflation: 2.2%
  • arrow_forward2018 UK GDP: rising to 1.6%
  • arrow_forward2019 UK GDP: 1.7%
  • arrow_forward2020 UK GDP: 1.7%


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 35

If 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 often always easier than the practical side of things.

See Spain 35 spread betting analysis.


1 November 2017: Spread Betting Rebates Time

It’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:

  • infoConcentrate on your trading P&L – the rebate is just a handy way of reducing your trading costs

  • infoRebates are usually only useful if you trade quite a bit – if you only make the occasional trade then you won’t get a rebate or if you do get a rebate it will be largely pointless
For more details see our: guide to spread betting rebates.


Trump’s Little Thumbs Have Been Busy Again

This time he’s been tweeting about coal production increasing.

Trump Tweet on Coal Production

So… err…
  • doneYes, he’s still a f****** idiot
  • helpReminds me of this cartoon
Floods of Trump Fans


Stock Market Volatility Still Close To Lows

Just a quick check of the VIX shows we’re still hovering around 10 and so not far off all time lows.

Also see:
1 Week VIX Chart
1 Week VIX Chart


1 November 2017: US Markets Up 7 Months in a Row

Elsewhere, October also saw:

  • trending_upThe FTSE 100 post its best month since May 2017
  • trending_upThe EuroStoxx 50 close at its highest level since February 2015 – all helped by loose monetary policy and improving economic data
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 Meeting

Hurricane 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:

  • arrow_forwardHe doesn’t like women in power
  • arrow_forwardHe doesn’t like independent people
  • arrow_forwardIf he replaces Janet Yellen then he will have made a decision he can crow about – a bit like all the crowing about how he was responsible for putting an extra Republican on the Supreme Court
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%.


Trumpkin
Trumpkins are back!


31 October 2017: Stock Market Warning on the Trump Bump

With the Robert Mueller investigation hotting up take extra care if you’re buying stock market indices… or at least keep an eye on the US news / investigation.

It’s not difficult to imagine investors, who had been betting on The Donald to make life easier for them, suddenly wanting to cash in their profits and take some money off the table.

Will the Russia probe cause the correction that many of us are expecting?

Also see our short piece, Caution: The Trump Bump Could Go Belly Up.

The Probe



30 October 2017: Busy Trading Week Ahead

We have interest rate votes from the BoE, Bank of Japan, and Federal Reserve, we also have Eurozone Q3 GDP data, and lot of manufacturing and services PMIs… and non-farms on Friday.

You have been warned.


5 Minutes on the US Markets

Below, a 5 minute look at this week’s Fed meeting, inflation and they likely December rate hike.

And they squeeze in a few short bit on US corporate earnings.



30 October 2017: My Spain 35 Short is a Mess

The Spain 35 has gapped 163pts higher from Friday’s close to the open this morning.

This doesn’t make sense.

I’m expecting the Catalonian politicians to have a thought process along the following lines:

“If we think we’ll win the new elections then we’ll listen to Madrid, pretend to be the good guys, and get a new mandate”

or…

“If we don’t think we’ll win the new elections then we won’t listen to Madrid, we’ve already declared independence.”

Also see – Spanish stock market update.

New elections are supposed to be due in December. An opinion poll in El Mundo suggests that Catalan separatists could lose their majority.


Scary Clowns
Halloween is almost upon us… not much scarier than these clowns…


27 October 2017: New Short on the Spanish Stock Market

The Catalan parliament has voted to declare independence.

The 5 minute chart below is looking pretty rocky…

I’ve opened a new speculative short – see Spain 35 spread bet set-up.

Spain 35: 5 Minute Chart
Spain 35: 5 Minute Chart


The wide channel on the one day chart is still holding…

Spain 35: 1 Day Chart
Spain 35: 1 Day Chart


Good US Q3 GDP Data

Playing second fiddle to the Spanish stock market is the US…

The US Q3 GDP came in at 3.0% (annualised) vs the 2.7% forecast and the 3.1% in Q2.

Considering the US got hit by a series of hurricanes in Q3 the number is particularly impressive.


Dollar Already Solid

The Q3 data didn’t do much to the dollar with the December rate hike looking pretty much locked in.

The Dow is surprisingly flat but the Google/Alphabet share price is up 7%.


Tech Giants Still Beating Expectations

We’ve taken a quick look at the solid Q3 numbers:

Trading Stat of the Day!

By 4pm UK time, the combined increase in market cap of AMZN, GOOG and MSFT so far today is… $141bn… that’s the total market cap of IBM at $143bn. Wow.


Key moves in the spread betting markets:

  • trending_downEUR/USD – yesterday the ECB’s was pretty Dovish with regards to reducing it’s bond buying and that’s weakened the euro.

    EUR/USD has dipped below the 100 day ma at $1.1675. The 50 day ma at $1.1840 could well act as resistance to any rallies.

  • trending_downEUR/GBP – very poor UK retail sales data has hit Sterling. At the same time, EUR/GBP is below the 100-day moving at £0.8941 and could target the 200 day ma at £0.8750. The 50-day ma is at £0.8982.

  • trending_upUSD/JPY – rising since early September but currently struggling with ¥114. Will be interesting if it hits the July high of ¥114.49. That would be close to the USD/JPY triangle break-out we’ve discussed.

  • trending_upDAX 30 – a weaker euro helped the German stock market pass 13,200 and hit a fresh record high

  • trending_upCAC 40 – the French stock market has now also hit fresh record highs

  • trending_flatSpain 35 – the Spanish stock market is still being battered around by the local politics. Despite the weaker euro the IBEX is off this morning – albeit after a 2% rise yesterday.


27 October 2017: It’s a Big One… New US GDP Data

warningUS Q3 GDP is out at 1.30pm (UK time)

The consensus is for a reading of 2.7%.


26 October 2017: Today’s Key Spread Betting Times (UK Time)

  • arrow_forwardThe ECB meeting is at 12:45pm
  • arrow_forwardMario Draghi’s press conference will start at 1.30pm as usual

In the Markets Right Now

Revenues in Barclays’ “Fixed Income, Currencies and Commodities” unit have drop through the floor.

See our quick up and live chart: Barclays shares are taking a beating.


Tech Giants Report on Q3

Watch out, some of the big boys are reporting Q3 including Alphabet (it’s still Google to me), Amazon, Intel and Twitter.


Big US Tech Stocks Looking at a Reversal?

Below, a more sobering 10 minute video on 4 of the big US tech stocks which look like they could be running out of steam.

Not a surprise when the S&P 500 price earning ratio is pretty high at 23 and some of the big tech stocks are:

  • warningAlphabet (Google) P/E ratio: 35
  • warningFacebook P/E ratio: 38
  • warningNetflix P/E ratio: 194
  • warningAmazon P/E ratio: 247… yes that’s 247!


Shorting Old School Giants?

For the old school there are also Q3 updates from Ford and American Airlines but no one ever seems to spread bet on those firm.

We look at shorting American Airlines but never get round to it.

The latest controversy can’t help American Airlines with the US’s National Association for the Advancement of Colored People (NAACP) issuing “national travel advisory” again travelling with AAL. The BBC has covered some of the ‘‘disturbing racist incidents’.

Let’s hope AAL clean up their act and learn from Qantas.

The Aussie carrier isn’t just popular with Rainman.

Alan Joyce, Qantas boss has been named the world’s most influential LGBT business executive.

At some point, we need to take a longer look at shorting some of the old school dinosaurs.

Those will be longer-term trades though and so neither spread betting or CFDs will be the right product (those rolling costs will just rack up).

trending_down Shorting American Airlines? – with all the s*** PR, it seems like an obvious short. At the same time, the US airline industry isn’t that competitive and so the share price can hold up pretty well despite all the bad PR.

American Airlines 5 Year Chart
Perhaps it’s a case of buying the dip


25 October 2017: GBP/USD Spikes Higher on UK Q3 GDP

This morning’s UK Q3 GDP showed growth at 0.4% vs 0.3% expected. Yearly growth came in at 1.5% also beating expectations.

Sterling has been under pressure with the Bank of England’s, Sir John Cunliffe, hinting a November rate rise wasn’t in the bag.

The new Q3 data helps the BoE put the rate rise in the bag (for now). The result was stronger spikes: warningNeedless to say the November rate rise is far from a done deal. I still expect a few more twists, and then some, before any such confirmation.


25 October 2017: Industrial Bellwether Pushes US Markets to Fresh Record highs

  • trending_upCaterpillar, which is often seen as an industrial bellwether, saw revenues rise 24% (mostly on sales to the US and China).

    The 24% was well above expectations a good growth signal. Yesterday, the US markets reacted the only way they seem to know how. Up.


25 October 2017: Trading the Australia 200

We have a quick video update on the current technicals of the Australia 200.


EU Tries to Save May and the Brexit Negotiations
Summary of Last Week’s Brexit Negotiations


24 October 2017: A Different Look at the Spread Betting Markets

Below, Zak Mir takes a look at gold, the FTSE 100, USD/JPY and Spire Healthcare.

It’s a 14 minutes video but it’s interesting… and we’ve set it to start at 4m:31s.

We’ve Skipped the Bitcoin Section

The first 4m:30 of the video covers Bitcoin so we skipped that although, if you must, you can see it here: Bitcoin spread bets video.

warning Why skip Bitcoin? As always, our view is that if you’re spread betting on Bitcoin then you’re mixing a highly volatile market with high risk trading and that’s an accident waiting to happen…

It’s best avoided.


24 October 2017: Boring!

It was a pretty weak day of trading yesterday, the markets could just be waiting for the Thursday ECB meeting and/or the UK and US GDP updates.

  • trending_upUSD/JPY at 3 Month High – as we covered, Shinzo Abe’s re-election probably means more fiscal easing.

    It’s not a surprise to see USD/JPY chart at a 3 month high.

  • event_seatNew Federal Reserve Chair?

    The markets are still speculating on the next Fed chair. The more dovish Jerome Powell looks to be the front runner.

    The BBC has reviewed the Fed chair runners and riders.

  • trending_upPositive European Data

    We’ve already had the eurozone PMI figures this morning.

    The services sector growth seems to be slowing but manufacturing gains are making up for that.

    According to Josh Mahony at IG:
Taking today’s eurozone PMI figures in their entirety, it’s clear that manufacturing remains the reliable element of eurozone growth.

German, French and eurozone manufacturing have all beaten expectations.
This is the sort of the data that gives the ECB another nudge towards reducing monetary easing.


23 October 2017: Potential Break Out For USD/JPY

Here’s a chart we’ve been keeping an eye on, i.e. the potential break out for USD/JPY.

There’s no trade yet we’re pretty darn close.

Also see big USD/JPY spread bet getting close.

Potential USD/JPY Break Out


Japanese Markets Gap Higher

Also see our updated examples of recent market gaps.


Warning For all Those Shorting US Stocks

warning Hope over US tax ‘reform’ – aka big tax breaks – pushed US stock markets to close at new record highs almost every day last week.

The latest optimism seems a little more justified with the Senate passing a budget that moved Republicans closer to tax reform.

Be careful if you are one of the many who are shorting US stocks.

If there’s more progress on the huge tax cuts then the US stocks could get a further boost.


European Political Messs

Brexit talks have been a little more positive with Angela acknowledging the EU needs to be slightly more flexible and Donald Tusk acknowledging that internal ‘EU27’ talks would review UK proposals.

The ‘EU27’?… That’s the ‘EU sans UK’ innit.

So the tone has changed and nothing has actually been agreed. Déjà vu.


European Stock Markets Looking Mixed

Last week:
  • trending_upThere was a record high for the DAX
  • trending_downThe Italy 40 and Spain 35 underperformed
  • trending_downThe FTSE 100 and FTSE 250 also underperformed after a number of profit warnings

Another Populist Wins – Another Pull on the EU

If you missed it, another populist has won an election at the weekend.

Perhaps the EU will be nicer to the UK with Andrej Basis, and his anti-EU ‘ANO movement’ getting nearly 30% of the vote in the Czech Republic election.

More concerning could be that the anti-euro right-wing ODS party got more than 11% in the same election.

Although that’s still less than Germany’s far right AfD which won 13% of the vote in the recent German elections (the AfD got a staggering 20% of the East German vote).

Also see Czech Billionaire anti-EU populist wins election.


The Week Ahead: ECB

On Thursday the focus will be on the ECB and what it plans to do on tapering its asset purchasing, the programmes is currently running at €60bn/month.

There’s talk of reducing it to €40bn/month and running it down quickly or perhaps a sharp reduction to €20bn/month and running it down slowly.

With so much political instability, and not just in the poorer southern countries, the status quo is also an option for the ECB.




The Week Ahead: UK and US Q3 GDPs

The UK GDP is expected to be steady at around 0.3%. If so, the November rate rise remains on the table.

The US GDP number could be trickier predict due to the impact of hurricane season on the US economy.


20 October 2017: Binary Options Still Rife with Cowboys

warningwarningwarning Good to see City police raid 20 offices in crackdown on binary options fraud.

For me though, that’s just the tip of the iceberg.

It’s about time the FCA regulated binary options / binaries trading.

That would allow the few decent firms to still operate while hopefully getting rid of a lot of the companies that just rip people off (assuming there are a few decent firms).

If we can get rid of all the dodgy firms that are allowed to work “legitimately” under very loose gaming licences, that will protect lot investors.

I do appreciate though, with or without proper regulation, you will still get boiler rooms.


Sales Chavs

Of course, financial spread betting isn’t perfect.

The industry still needs to improve, particularly when it comes to “Account Managers” i.e. 20-year-old sales chavs who constantly call you to try to get you to spread bet. Please f*** off.


20 October 2017: Cowboy Currency Hits $6,000

Talking of cowboys… the cowboy currency, aka Bitcoin, has hit the $6,000 level for the first time.

20 October 2017: US Markets Dragging Everyone Else Higher

Whatever concerns investors may have about the many many global political risks, the overarching bullishness on the American economy continues to trump those concerns.

Admittedly though, US weekly jobless claims are at their lowest level since 1973. Not bad.

Yesterday, we also had more rumours about a getting a new Fed President who would be more dovish and naturally the markets like that.

We also had a bullish US manufacturing survey.


Dovish Fed President = Weaker Dollar

It’s no surprise that a Fed President who is more likely to hold off on interest rate rises will weaken the dollar.

There are now new reports suggesting that the idiot-in-chief is erring towards the dovish Jerome Powell as the new Federal reserve chairman.

infoNote, Trump is the idiot-in-chief for all the reasons you can see on our selection of Donald Trump videos and cartoon … not because he wants a weaker dollar.

Planning for a weaker dollar almost seems like there’s been a rational thought process and that’s highly unlikely.

Naturally a weaker dollar is probably also positive for US stocks.

warningWatch out for more dollars swings on Fed chair speculation


Sterling Feeling the Autumn Blues


Mark Carney's Choices
Choices, choices…

Sterling weakened again yesterday when September retail sales dropped 8%.

This adds another reason for why the BoE might hold off on a November rate rise.

warningAt the moment, the markets are pricing in a small November rate rise as being the most likely scenario. If there isn’t a rate rise then the pound could see a quick drop lower.

While it’s clear that some MPC members don’t support an increase in interest rates just yet, according to Michael Hewson at CMC Markets:

Comments in the summer from Andrew Haldane, chief economist, on the fact that excessively low rates could allow inflation to become entrenched, have caused the MPC some concern.

If, as Mark Carney suggested earlier this week, inflation does move above 3% next month, then the bank may feel it’s prudent to raise rates.

The bigger problem will be getting the five votes to push it through.


Theresa May Tells EU to F*** Off
OK… we know the Brexit negotiations aren’t like this but we like the cartoon…


18 October 2017: Sterling Still Unsteady

As well as the Brexit negotiations there is pressure from:

  • trending_upWith yesterday’s CPI inflation at a five year high of 3% that should boost the pound.

    Even though 3% was expected, higher inflation supports the idea that the BoE will raise interest rates by the end of the year.

  • trending_downA pretty negative OECD report on the UK economy, mostly due to Brexit, didn’t help Sterling.

  • trending_downThe new members of the BoE’s Monetary Policy Committee (MPC), Silvana Tenreyro and deputy governor David Ramsden, seem pretty dovish. According to Michael Hewson at CMC Markets:
Both suggested that they were in no rush to raise interest rates at November’s meeting.

The dovishness from two new members of the committee has shifted the maths on the MPC enough to suggest that even if the BoE were to move rates next month the move is unlikely to be unanimous.
  • warningToday’s ILO unemployment data should add colour.

    Average earnings data is expected to remain constant at 2.1% but with inflation at 3%, that’s a cut in real wages and puts more pressure on BoE to kick the can down the road.


18 October 2017: Longer-term Dollar Movers and Shakers

Watch out for increased speculation as to who could be the new Fed chair – this could easily move the dollar and therefore pretty much any spread betting market.

John Taylor is the latest candidate to be touted as a possible replacement for Yellen.

Taylor would be a bit of strange choice though. He’s a bit of a policy hawk and Trump, preferring a weaker US dollar, would prefer a dove.

Current Fed board member Jerome Powell is also in the running, ‘if’ Yellen leaves. Powell is certainly more suited to Trump’s dovish preference.

Also see Why is the US Dollar So Important to Most Spread Betting Markets?


18 October 2017: Other Spread Betting Markets Taking a Hit



17 October 2017: Spread Bettors Very Short of Stock Markets

IG account holders are very bearish on the major indices:

Stock Market Spread Betting on Market Sentiment: 17 October 2017
Data as of 12pm, 17 October 2017

For more – see, “Spread Betting on Market Sentiment“.


17 October 2017: Decent-Sized Stock Market Correction

Sell sell sell
I will sell you soon, but not yet, not yet…


Bill McNabb, chairman of Vanguard, has said that the stock markets could due a “decent-sized correction at some point”.

Not familiar with Vanguard? They are one of the biggest global investment funds and where Warren Buffett suggested his wife put a tracker.

In an interview on Radio 4, McNabb said the markets were not “in bubble territory” but that valuations were “very high”.

On the one hand we should listen to Bill McNabb, he probably knows more than most of us and he probably has better analysis.

On the other hand, pointing out the obvious doesn’t help that much.

The S&P 500 is trading at P/E ratio of 25 which is high compared to the long-term average of 15.

Many investors are probably ready to hit the sell button and take their profits… but we need a solid event to drive that panic.

This is a useful bit of caution for all those buying that the top, i.e. keep trade sizes small… alas he doesn’t give us much more insight.

Also see Vanguard boss warns on stock market highs.


17 October 2017: Sterling Holding and Netflix Flying

So far today we are looking at:

  • trending_flatSterling holding its ground following a 5 year high for UK inflation – CPI is at its highest annual rate since April 2012.
However according to Chris Beauchamp at IG:

Given that there’s a pretty robust expectation that the Bank of England dust off its ‘rate increase’ button in November, and the annual CPI reading was only inline with expectations, that was not enough to send the pound much higher.
  • trending_downStock markets slightly lower in early trade and the FTSE is trading at a weekly low but that’s still only 60 points off the recent high.

  • trending_upSolid Netflix results giving the stock, and the US indices, a boost – read more


16 October 2017: The Pound – Record Highs and Interest Rates Nailed to the Floor

Last week saw new record closes for the FTSE 100, FTSE 250, Germany 30, MSCI World index and of course… the big US indices.

The Nikkei225 hit its highest levels since ’96… which was clearly a long time ago because in ’96 we were listening to Three Lions … the “30 years of hurt” version.

Why All the Stock Market Highs?
  • trending_upInvestors have a pretty optimistic outlook for the global economy
  • warningInvestors seem to be ignoring all the big political risks
  • trending_downThe returns in bonds and many other markets are pretty miserable
The returns in bonds and many other markets are pretty miserable According to Michael Hewson of CMC Markets, it’s the politics that is more likely to make a mess of things.

While all the talk is of a possible easing of monetary policy, the fact remains that even with a moderate retreat by the Federal Reserve, ECB and/or Bank of England, interest rates will still be nailed to the floor on a historical basis.

That’s not to say that we might not see some sort of policy mistake but it would need to be a real doozy.

And right now, that kind of mistake, doesn’t seem very likely.
How to Spread Bet on this View?
It’s easy to see Hewson being right in the short-term but that also means less predictable spread betting.

Perhaps it’s a case of waiting for some political fall out and a market to drop and then spread betting on the market to reverse back to the pre-panic level.

You could have done this with the Spain 35 Index when the Spanish government got very heavy handed with Catalans voters.

Likewise, this will have worked well with the FTSE 100 Index after almost any piece of “Conservative government making a mess of Brexit negotiations” story…

Of course… if the stocks market indices are just rising then, with hindsight, it’s easy to say “buy on the dip” whatever the cause of the dip.

A Lot of Big Political Risks
As well as the usual political risks of Brexit, Russia and the Middle East we also have The Donald vs Iran, The Donald vs North Korea, The Donald vs pretty much everyone else except Russia, Spain/Catalonia, a weaker Angie and the general rise in populism e.g. the AfD in Germany or the (probable) new Government in Austria.

With all this, expect shocks and quick moves. Consider spread betting with the smallest stakes.

As always, not trading is a very valid option.


13 October 2017: The Pound – The Snowflake of Currencies

The Snowflake Currency


If the dollar is the king of currencies then the pound is doing a great job of taking up the title of the “Snowflake of Currencies”.

Like the “Snowflake Generation”, sterling is looking fragile and will happily give up on any headline or rumour.

We’ve taken a longer look here at “The Snowflake Currency“.

In the meantime, the 5 minute chart below shows Sterling’s latest strop.

12 October 2017: Toys out of the pram…



13 October 2017: It’s Chart of the Day FFS!

Google will now give you a chart of a lot of things and that includes a chart of the mentions of “FFS” over time.

Perhaps it had a different meaning in the 1800s…

It certainly had a solid bull run from the ’50s to the early 2000s

Although I am surprised that usage didn’t rapidly increase after:

  • thumb_downThe Brexit referendum (whether you’re pro-Brexit or pro-Remain you can’t be happy with how much inept our politicians seem to be), or
  • thumb_downDonald Trump took up office
Chart of How Often 'FFS' Has Been Used Since the 1800s
FFS!



13 October 2017: New Record High for FTSE 100

trending_up The UK index hit a record high at 7,533 yesterday as the pound weakened on a lack of Brexit progress.

Although, while sterling has since recovered and then some, the FTSE is only trading a little off the highs at around 7,010.

The reverse correlation between the FTSE 100 and GBP/USD is far from perfect.

The Brexit d.i.v.o.r.c.e. is still a major sticking point for the pound and according to LCG:

The EU is unlikely to do much before agreeing the Brexit fee. A fee which could be anywhere between £50 and £100bn.

This would be to cover the financial commitments to EU projects as well as pensions of former EU staff in the UK and the relocation of the EU agencies.
I don’t blame the EU for this. No doubt the costs are inflated but it’s the UK that voted to leave and that means paying the EU to lose a lot of agencies…

FFS!


13 October 2017: New 20 Year High for Nikkei 225

trending_upThe Nikkei has broken through 21,000 for the first time in over 20 years and has shot up to 21,200.

trending_downUSD/JPY is testing ¥112.00 to the downside although it appears that traders prefer the ‘softening yen’ story to the ‘softening dollar’ story and this could catch them out.

Very short-term, the softening dollar could have more to it.

Yes, there is a snap election in Japan on 22 October but Shinzo Abe looks pretty safe, his main rival, Yuriko Koike, has pulled out of the race.

I.e. Abe’s view on weakening the yen further could be firmly priced in.

Of course, as Angie Merkel knows, nothing is certain in politics these days.


12 October 2017: Trump Confirms He’s a Still Moron. Again.

Grinning Idiot
Grinning Idiot


This time he’s mixed up stock market gains and the US national debt… or perhaps he’s just trying to mislead again. Yesterday, in an interview on Fox News he said:

The country, we took it over and owed over $20 trillion [of national debt]…

As you know, the last eight years, [the US government] borrowed more than it did in the whole history of our country.

So they borrowed more than $10 trillion, right? And yet we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months, in terms of value.

So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt. But we’re very honored by it.
And here’s the video…
What a twat.

Also see: I’m sure the spread betting companies would love Trump as a client… as long has he deposited in advance…


12 October 2017: Bitcoin Hits $5,000

In another day of Bitcoin hurting many of the people trading it, the currency has hit $5,000 for the first time.

Below are the 1 day and 1 hour charts. I know it’s tempting to:

  • trending_upBuy Bitcoin! – “look at how strong that trend is”
  • trending_downBet against Bitcoin! – “it must fall soon”
Even if you toss the coin and you’re right, it’s the intraday volatility that will hurt you.

Also see our guide that covers “Serious Warning about Spread Betting and/or Trading CFDs on Cryptocurrencies




12 October 2017: Regulators Swallows Just Eat Purchase of Hungryhouse

WTF!? A UK tech success?

The Just Eat share price gapped up 7% on the open but it’s come off the boil a little since then:

Just Eat Chart
Eating up the competition


We’ve taken a longer look at the UK delivery firm here: Just Eat spread betting guide.

infoSpoiler alert: I don’t think spread betting is the right tool for a Just Eat trade.

We’ve also added a live Just Eat chart.


11 October 2017: Japan 225 at 21 Year High

It’s not just the US markets that are on a high, the Japan 225 index has closed at its highest level since 1996.

Japan 225 Bull Run
More National Rail than Bullet Train…

Japan 225 vs USD/JPY Correlation

The stock market high is interesting but it’s more interesting to take a quick look at the long-term Japan 225 vs USD/JPY correlation.


11 October 2017: Another View of the Markets Can Help

Below, an 8m:30s view of the markets but it’s a pretty interesting view.

The gent talks quickly but if you’re interested in the S&P 500, EUR/USD, silver or gold then there are some interesting trade set-ups.


11 October 2017: Forex Warning – Is there Upward Pressure on the Dollar?

warning Janet Yellen has admitted that the Fed is a wee bit perplexed at why inflation isn’t higher… particularly when the Fed’s preferred measure of inflation is at a 2 year low.

At the same time though, ISM surveys show US inflation at multiyear highs.

Last week’s US payrolls reports also showed that unemployment dropped again, to 4.2%, and that wages unexpectedly jumped to 2.9% in September.

Curiouser and curiouser…

Today’s FOMC minutes could tell us more about what the Fed is thinking.

As usual, more inflation = more interest rate rises = stronger dollar.

Also see Why is the US Dollar So Important to Most Spread Betting Markets?


Warning
Mind the big f*** off gap!


11 October 2017: Spanish Stock Market Gapping Daily

Caution is still very much needed for anyone looking at the Spanish stock market.

The Spain 35 Index has been gapping on a daily basis e.g. just looking at the last 3 sessions:

  • trending_upFriday’s close at 10,177 to Monday’s open at 10,311 = 134 point gap higher
  • trending_downMonday’s close at 10,225 to Tuesday’s open at 10,193 = 32 point gap lower
  • trending_upTuesday’s close at 10,138 to today’s open at 10,306 = 168 point gap higher
Ouch!

We’ve covered these gaps, and the other recent gaps, in our Spanish stock market spread betting guide.

What do you need to know? Pretty simple, if in doubt, don’t trade.


8 October 2017: Spread Betting on Sundays

It’s Sunday but that doesn’t mean you have to stop trading… some synthetic stock markets are available for Sunday trading for 8am to about 22.40pm, UK time.

I.e. they close a little before the normal weekday 24 hour stock markets re-open.

IG offer Sunday market on the FTSE 100, DAX and Dow Jones and they’ve been doing this for some time.

These aren’t quite normal markets though. IG operate their normal weekday markets and these synthetic Sunday markets separately e.g. if you open a spread bet on the Thursday you couldn’t close it on the Sunday… but you could hedge it.

When you think about it, that isn’t necessarily a bad thing. You don’t want your normal trades stopped out because of a hopefully-accurate-but-ultimately-synthetic market that is open on a Sunday.

There are also other issues like wider spreads e.g. 5.8pts for the FTSE 100 and 7pts for both the Germany 30 and Wall Street. Of course, that may be a price that’s worth paying.

In short, these aren’t normal markets but you may want to be aware of them.

Before you trade them though, you need to understand the slightly different rules. Take a look at our guide: Sunday FTSE, DAX and Dow Jones markets.


6 October 2017: Mierda! Spain 35 Stop Loss Hit

The market bounced quickly yesterday and took out my Stop at 10,200.

If you’re trading the Spanish stock market then take care, there are plenty of sharp moves, including 282 point and 347 point daily moves.

Also the Spain 35 market hours are only 8am to 4.30pm (UK time) and that leaves a lot of time for positions to the built up.

Be prepared for plenty of gaps… like the overnight gap we’ve seen between the last couple of sessions.

Spain 35 Chart  - June to 6 October 2017
282 point and 347 point moves

But… I’ve got an idea for a risky spread bet.

For more see Spain 35 spread betting update.


Rebates for Spread Betting, Forex and CFDs


5 October 2017: Monthly Trading Rebates Can Help But…

Rebates are only rebates…

They only give you money back on your trading.

Yes, yes, that may seem obvious but the point is, however much you trade, concentrate on your P&L rather than any trading offer or rebate.

Also, if you trade infrequently then you are unlikely to get a rebate.

At the same time though, if you spread bet a lot then it’s worth taking a look at the monthly rebates that a few firms offer.

InterTrader have been offering a monthly rebate for a long time – see InterTrader Rebate.


Financial Spreads Rebate?

The Financial Spreads rebate is one of the more simple rebates to qualify for – if you trade +£250 in spread costs then you get a 10% rebate.

And once you’ve earned the rebate there are no shenanigans, you can withdraw it.

If you trade £1,500 in spread costs then you get a 15% rebate and if you trade more £4,000 in a month then you get a 20% rebate.

A warning though, anything above £1,000 is a lot of trading in a given month.

Also see Financial Spreads Rebate..

For a longer look, see how do spread betting rebates work?


5 October 2017: It Feels Like We’ve Been Here Before

…but I’m not sure if that makes spread betting any easier.

  • warningThe Spain 35 gapped 25 points lower over night but in early trade it has bounced 125 points higher.

    With nothing resolved there must still be downward pressure on the index (at least that’s my view… and I’m short of the index)

  • trending_upThe DAX might be benefiting from money flowing out of Spanish stocks and into German stocks.

    The DAX had a torrid summer and lost 1,000 points. However, since the low of 11,867 on 29 August, the index has added a rather cheeky 1080 points to the current prices just below the 13,000 mark.

    I might wait for a break for 13,000 before looking at the German stock market, it has had problems with resistance around that level before.

  • trending_upMore record highs for the US stock market. A strong September ISM services report added to the good numbers in Monday’s manufacturing data. All this should help strengthen the dollar.

    And as Michael Hewson of CMC Markets said:
The ADP employment report was a bit on the weak side but, despite the disruption from all the storms, there was nothing in it to suggest that the Fed won’t raise rates later this year.



4 October 2017: The King’s Speech II Gets Panned

Perhaps Spain’s King Felipe VI thought he was Colin Firth (or even King George VI)… either way the markets hated his aggressive speech and the Spain 35 index sold off heavily this morning.

Too late to the party?

What next? I might be too late to the party. But I’ve still taken a look at and shorted the Spanish stock market.


4 October 2017: Is Gold Heading for Another Interesting Trade Set-Up?

The gold price is looking interesting.

Long-Term Gold Chart: Feb 2016 to Oct 2017 - Up Channel

If it bounces off the up channel support that’s been in play for nearly a year then a small buy could be interesting.

No bet yet but one to keep an eye on.

Also see Gold spread betting guide.



The Older Spread Betting Diaries



AuthorAlex Turner

Senior Editor, SpreadBetMagazine