Financial Spread Betting Update 7th March 2011

This week’s financial spread betting update is now available and can be read by clicking here.

In last week’s blog post I wrote that if Crude could move back and close above $100 level, that we would see a continuation higher. Crude did break the $100 level and close above it and has since been moving higher. In early trading this morning, Crude is already $2 higher and now looks to be heading towards $110.

We also wrote last week about the 7700 support area on the dollar index and that it may give way, leading to lower prices. That has also happened. So far this morning the dollar is flat. The price action for the dollar over the past couple of weeks has surprised a few as normally in times of geopolitical turmoil the dollar is classed as a safe have and rises. This time around the dollar has continued to edge lower. Currently we are seeing record bets against the dollar from hedge funds and forex dealers, indicating that the dollar has is losing its safe haven status and that Eurozone interest rates will be rising soon.

According to figures from the Chicago Mercantile Exchange (CME), bets against the dollar are surging, rising to $39bn. This is a new record, more that the level of anti-dollar bets in 2007, which was $36bn. The only downside to this from a short dollar perspective is that once everybody is short, there is nobody left who wants to sell and that leads to a bottom. For now though the trend is still very much down for the dollar.

Under normal circumstances a weaker dollar supports stocks and leads to higher commodity prices. Due to the turmoil in Libya it remains to be seen what will happen but clearly this morning energies, Gold and Silver are benefitting and we’ll likely see new all time highs posted on Gold this week.

This week’s financial spread betting update begins with:

The past week has seen stocks mixed but overall have edged slightly higher. The dollar meanwhile has continued to sell off and may head lower. Strength continues in metals and energies and commodities have been mostly higher. The long term trends remain up for stocks and commodities and down for the dollar and interest rate futures..…continue reading by clicking here

Good trading

Phil Seaton

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