Gender inequality – only women have handwriting this neat
The Spread Betting DiaryA 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.”
More Spread Betting Diary
30 November 2017: Good
The extreme volatility of Bitcoin has now started to cause some real concern to the brokers that offer it.
and Bad News: Spread Betting & CFD Firms Making it Almost Impossible to Trade Bitcoin
Plus 500 now offers the market at:
thumb_down Margin – now at 50%, i.e. just x2 leverage
thumb_down Wide spreads – currently a $208 spread with the price at $9,848 – that’s a 2.1% spread
thumb_down Overnight financing rates – now at 175%! That’s very nasty a pay-day-loans rate.
The equivalent industry norms for a market like the FTSE 100 are closer to:
thumb_up Margin of 0.50%, i.e. x200 leverage
thumb_up Spreads – at around 0.1%, i.e. around 1pt of the FTSE
thumb_up Overnight financing rates – at LIBOR + 2.5%, i.e. better than many UK mortgage rates
Just to confirm, Plus 500 are more reasonable with their normal markets. They clearly don’t want anyone trading Bitcoin.
It’s not just Plus 500 that are restricting the market, IG are also concerned.
warning If the brokers are concerned, you should avoid the market like the plague!
For more, see our update on: Spread Betting and CFD Brokers Concerned About Bitcoin Losses.
29 November 2017: Electronic Tulips Trading at $10,849!trending_up Bitcoin has passed $10,000 and hit $10,849 – see live Bitcoin chart.
trending_down It then crumbled and it 25 minutes dropped to $10,058, i.e. a $791 (7.3%) fall.
As usual it’s not the upward market that will hurt anyone speculating on BTC, the wild swings will empty your spread betting account
trending_up A few hours later and the market is trading up $677 at $10,735… a 6.5% swing
warning If you spread bet on this market, you will get hurt.
Today’s Bitcoin chart… so far
Oh… and it’s not just us trying to warn people about this market.
Bloomberg have released a good chart (below).
Also see our view “Bitcoin is Different to Tulips (But Not in a Good Way)“.
Day of the
Potential Spread Bets on Dow, S&P, EUR/USD and GoldBelow, a 7 minute video looking at why spread bettors might still want to be long of the Dow Jones, S&P 500, EUR/USD and gold… until there is a solid break lower:
There are some interesting views here but don’t forget your Stops!
Euro Stoxx to Drive Higher?Below, a 4 minute video looking at the Euro Stoxx 50 which certainly isn’t the most popular market.
But!… the market has moved above the 50 day moving average and the MACD (momentum) has turned positive.
28 November 2017: Crude Oil Prices Looking Limited in the Short-Termwarning We’ve got a situation where far-term oil futures are cheaper than near-term futures and that will help keep a lid on things… and/or it’s a sign that a lot of the big players think that prices are going nowhere fast.
There is also a key OPEC meeting this week to discuss the on-going production limits… and possible extension to those limits.
Of course, saying you’re limiting production and actually limiting production, are two rather different things in the shady world of crude oil…
We’ve added a useful 9 minute video to give you some insight in to how this might play out – see our crude oil spread betting guide.
27 November 2017: Bitcoin Just Off $10,000warning The cryptocurrency is trading north of $9,500.
As usual, we’re very much against trading cryptocurrencies due to the fact that people tend to combine these highly volatile markets with high risk trading like spread betting or CFDs.
This combination just leads to very painful losses.
Also see New Prediction as Bitcoin Trades above $9,500.
25 November 2017: The Week Ahead – Dollar Weakness, the OPEC Meeting & UK Bank Stress TestsBelow, a useful 10 minute look at the week ahead covering the current dollar weakness and how that’s affecting the DAX, EUR/USD and GBP/USD.
This week we also have the OPEC meeting on Thursday 30 November where the cartel may disappoint.
At the same time, while Brent crude oil is in a solid up trend it is approaching stiff resistance. And… to add to the conundrum, Brent and US crude are giving slightly different technical signals.
warning If you’re more interested in UK equities then skip 6m:34s into the video. Here, Michael Hewson, Chief Market Analyst at CMC Markets, discuses the UK bank stress tests that could impact Barclays, Lloyds and RBS.
23 November: Hong Kong Hang Seng Up 66% Since February 2016trending_up Most stock markets have being doing well… the Hong Kong 50’s 66% increase is quite something though.
We’ve added a quick technical analysis video on where the market might go next.
Please see our Hong Kong stock market spread betting guide.
UK Budget Summary in Cartoons
The above still seems relevant…
The above still seems
21 November: Time to Short AUD/USD or GBP/AUD or EUR/AUD?Below, a 5 minute technical analysis video looking at the current Aussie dollar weakness.
If you missed it, there is a fundamental reason why the AUD is looking rather weak.
The recent Reserve Bank of Australia minutes show that the central bank is concerned over low wages growth and “tame” inflation.
As usual, limited inflation = no need to raise interest rates = weaker currency.
Let’s take that quick look at some possible entry and exit points:
No new German election before April 2018?
Autumn Budget – Will the Chancellor Continue to Prop Up Housing?Below, a 4 minute video from IG on where Philip Hammond might put
He could just play safe and try to boost housing. After all, as one analyst says:
75% of debt is mortgages, every 4% change in house prices has a 1% impact on consumption.
A nationwide fall in house prices unequivocally leads to a recession in the UK.
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!
31 October 2017: Stock Market Warning on the Trump BumpWith 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.
30 October 2017: Busy Trading Week AheadWe 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 MessThe 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”
“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.
Halloween is almost upon us… not much scarier than these clowns…
27 October 2017: New Short on the Spanish Stock MarketThe 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
The wide channel on the one day chart is still holding…
Spain 35: 1 Day Chart
Good US Q3 GDP DataPlaying 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 ExpectationsWe’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:
27 October 2017: It’s a Big One… New US GDP DatawarningUS 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)
In the Markets Right NowRevenues 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 Q3Watch 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:
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.
Perhaps it’s a case of buying the dip
25 October 2017: GBP/USD Spikes Higher on UK Q3 GDPThis 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
25 October 2017: Trading the Australia 200We have a quick video update on the current technicals of the Australia 200.
Summary of Last Week’s Brexit Negotiations
24 October 2017: A Different Look at the Spread Betting MarketsBelow, 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 SectionThe 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.
Taking today’s eurozone PMI figures in their entirety, it’s clear that manufacturing remains the reliable element of eurozone growth.This is the sort of the data that gives the ECB another nudge towards reducing monetary easing.
German, French and eurozone manufacturing have all beaten expectations.
23 October 2017: Potential Break Out For USD/JPYHere’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.
Japanese Markets Gap HigherAlso see our updated examples of recent market gaps.
Warning For all Those Shorting US Stockswarning 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 MesssBrexit 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 MixedLast week:
Another Populist Wins – Another Pull on the EUIf 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: ECBOn 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 GDPsThe 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 Cowboyswarningwarningwarning 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 ChavsOf 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 $6,000Talking 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 HigherWhatever 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 DollarIt’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
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.
OK… we know the Brexit negotiations aren’t like this but we like the cartoon…
18 October 2017: Sterling Still UnsteadyAs well as the Brexit negotiations there is pressure from:
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.
18 October 2017: Longer-term Dollar Movers and ShakersWatch 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 MarketsIG account holders are very bearish on the major indices:
Data as of 12pm, 17 October 2017
For more – see, “Spread Betting on Market Sentiment“.
17 October 2017: Decent-Sized Stock Market Correction
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 FlyingSo far today we are looking at:
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.
16 October 2017: The Pound – Record Highs and Interest Rates Nailed to the FloorLast 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?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 RisksAs 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:
13 October 2017: New Record High for FTSE 100trending_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.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…
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.
13 October 2017: New 20 Year High for Nikkei 225trending_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.
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]…And here’s the video…
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.
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 $5,000In 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:
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 HungryhouseWTF!? 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:
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 HighIt’s not just the US markets that are on a high, the Japan 225 index has closed at its highest level since 1996.
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 HelpBelow, 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?
Mind the big f*** off gap!
11 October 2017: Spanish Stock Market Gapping DailyCaution 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:
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.
The Older Spread Betting Diaries
Remember: Spread betting, CFDs and forex trading carry a high level of risk. You can lose more than your initial investment. These products are not suitable for all investors. Only speculate with money that you can afford to lose. Make sure you fully understand the risks involved and seek independent financial advice where necessary.