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

Following the recent very strong run seen in stocks we are seeing some correction, as we have been expecting. The markets have not quite reached our target at 1355 on the S&P 500 but are moving lower already this morning. That said, it is still early days and that are a couple of factors, which could change that later in the day. These are:

1. Monday’s for much of the past 2-3 years have generally been bullish
2. The U.S. markets don’t seem to like it when moves happen outside of their market opening hours and such moves are often reversed.

Considering the above things could still go either way today but certainly 1355 will need to be taken out for the bullish scenario to continue in the short term. A correction or consolidation would not be particularly surprising.

The down move in stocks has as ever correlated with a gain for the dollar as stocks and the dollar are generally inversely correlated. We did write about signs of buying coming in on the dollar index last week due to the presence of a series of lower shadows on the daily candles. Obviously we got the inverted shadows on the Euro last week indicating a rjection of higher prices, so this morning’s move lower is not all that surprising.

Gold has also continued with weakness, again this follows on from the large bearish engulfing pattern formed on Friday. The trend remains down for gold, up for the dollar overall (albeit with a couple of exceptions) and up for stocks.

This week’s financial spread betting update begins with: It’s been another week of risk on, which has seen stocks continue in bullish mode and the dollar continue its recent weakness. The trend continues to be up for stocks and is still up overall for the dollar but that may be going to change. Commodities for the most part have continued to benefit from dollar weakness………continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

This update is coming to you one day later than normal due to the U.S. markets being closed on Monday due to the Martin Luther King Holiday. Although other world markets were open relatively little usually happens as volume us light until U.S. markets open again.

This held true again this year with little happening yesterday. This morning though has seen stocks open higher and the inverse correlation between stocks and the dollar that we covered in this week’s update is showing up this morning and the dollar is lower. The other part of that inverse correlation is between the dollar and commodities, and a lower dollar usually equals higher commodity prices and we are seeing that again this morning with commodities, particularly gold and crude both higher this morning.

This morning’s rise in stocks has taken the S&P 500 up to test the critical 1300 level, which if cleared, especially during the U.S. session later on today may well lead to a move higher towards the May 2011 highs. This may subsequently lead to new highs for stocks since the March 09 lows but that remains to be seen. Of all the stock indexes that we trade, only the S&P 500 is in a long term uptrend although the Nasdaq 100 is close to giving a change of trend. The Nikkei and Dax are lagging behind so overall the trend for stocks is still down. The trend is also still down for commodities and up for the dollar.

This week’s financial spread betting update begins with: We wrote last week that the way the year has started with both stocks and the dollar rising is unusual and this has continued this week. The dollar index has risen to its highest level in a year and the S&P 500 has also reached a multi-month high. Stocks and the dollar are historically inversely correlated so how much longer both markets continue to rise together for remains to be seen. Probably not very long will be the answer………continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

The markets are relatively flat in this morning’s trading and there is little to report. Of interest this week will be the success or failure of stocks, in particular the S&P 500, of breaking resistance levels. For now the trend is still down for stocks.

The dollar may also be of interest having been quite well supported last week, in particular against the Euro which has fallen to 15 month lows. The trend remains up for the dollar and the dollar is still currently in bullish mode. Some sort of move that clarifies short-term direction for stocks and the dollar may happen this week.

As we cover in this week’s update, today marks the fifth trading day of the year which on a historical basis acts as an early warning for the year ahead with quite a high degree of accuracy for a seasonal indicator, which to my mind are not terrible accurate and trading decisions should not be made on these things alone. That said, this first five trading days early warning and the January Barometer on the whole does seem to have more statistical validity than most season indicators so it can be worth paying attention to. The data will be in for the first five days early warning following tonight’s close.

As I have covered elsewhere many times of late I expect this year to be a down year for stocks regardless of the first five trading days results or the January Barometer for a whole number of reasons, but time will tell. The most important thing as ever is to continue to follow the trends and let the markets tell us where they wish to go and not waste time (and usually money) trying to predict the future.

Nobody can predict the future with any accuracy, so the best we can do when trying to predict the future is to form a general idea on what we think may happen and use some form of technical trigger for timing in the direction of our ideas. As the records of the most successfully traders amply demonstrates, technical systems outperform discretionary systems, and trying to predict the future definitely falls into the category of discretion. Very few will be successful with such an approach.

This week’s financial spread betting update begins with:

As we kicked off the new trading year we saw a bullish week for the dollar with moves very much in the direction of the long-term trend and also a continuation of short-term strength in stocks. This is an unusual move as stocks and the dollar are historically inversely correlated. The long-term trend for stocks remain down but if short-term strength continues that may change soon. The trend for commodities is also down but commodities during the first week of the year have been mixed………continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

It’s been a relatively quiet start to the trading week with stocks and the dollar pretty much flat at the time of writing, although the Nikkei was lower by 1.26% in overnight trading.

Traders will be on the lookout for the Santa Claus rally, which historically runs for around the last 5 trading days of the year through to the first 2 trading days of the New Year. Whether this happens this year remains to be seen but unless there is a strong rally which currently appears less likely, December is looking like a negative month for stock indexes. It may also be a negative year for stocks as the S&P 500 opened the year at 1234, so unless we get some upward movement from today’s level the markets will be down for this year.

Following some large movements last week in the energy and metals sector, particularly Gold and Crude oil, it will be interesting to see what happens this week and whether weakness continues or if we get some kind of bounce higher. Gold in spite of the large sell off last week is still quite well ahead for the year but considerably lower than the all time highs posted in September.

This week’s financial spread betting update begins with:

As the year moves into the last 2 trading weeks, the long-term trends continue as they have for much of the year, down for stocks and commodities, and up for the dollar and interest rate futures.

Last Friday was triple witching, which saw stock index futures and forex futures roll out of December into June………continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

In early morning trading today the dollar is gaining ground across the board. At the same time commodities are lower as are stocks. This is common when the dollar gains as stocks and commodities are generally inversely correlated with the dollar.

As a general rule this is a bullish time of year, with from here in to year-end typically being bullish, but as we cover in this week’s update seasonality is not enough by itself to place trades. An example of that is Gold, which also on a seasonal basis tends to do well in December but that is not the case so far this year and gold is lower by some $24 this morning at the time of writing and is now back below $1700. Gold is still in a long-term uptrend and is the last of the metals to still be in an uptrend. Silver, which often moves pretty well in tandem with gold is considerably lower this morning as are the other metals.

In this week’s update we touch on the large triangle pattern on gold that has formed over the past few months and note that a breakout from that triangle may lead to a decent move in the direction of the breakout. This morning’s action has given gold a downside breakout, but as mentioned above, the long-term trend is up. The next support area to look out for is $1670. Beyond that we’re looking at $1600 and then $1550.

This week’s financial spread betting update begins with: The past week saw a small continuation of strength for stock indexes but further weakness was seen in the commodity markets and the dollar for the most part was flat. Much of the week has been focused on events in the Eurozone with the Euro summit taking centre stage…….…continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

The bullishness from last week has carried over into early trading this morning and we may well see a test of numerous resistance levels that we wrote about in more detail in this week’s update. This has also corresponded to further weakness in the US dollar and a subsequent gain in commodities.

This inverse relationship has been in place between the dollar, stocks and commodities for the past 2-3 years, which is a big reason that all markets have been moving almost in lock step. This has been a large contributor to the historically high levels of volatility that we have seen over this same period as any move in one of these sectors has also been met with a similar move in the others, with the dollar being the main driver.

In a nutshell, a rising dollar translates to lower stock and commodity prices and a falling dollar equals higher stocks and commodity prices. This is another reason why this week ahead could be an interesting one as the major stock indexes and several major currencies are all approaching resistance levels. The outcome of what happens at these levels, either breakout or reversal may set the tone for the rest of the year.

This week’s financial spread betting update begins with:

The past week has been bullish for stocks and bearish for the dollar. This was not all that surprising as the prior moves in these markets had been large, so a correction was always possible. The long-term trends however remain unaffected and the week ahead should be interesting.

The long-term trends remain in place, and are down for stocks and commodities, and up for the dollar and interest rate future…….…continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

Following last week’s shortened trading week due to the US Thanksgiving Holiday, which was the worst Thanksgiving week stocks wise since 1932, the markets have begun this week in a much more bullish fashion, paring some of last week’s losses. This is not all that unexpected considering the extent of recent moves which have seen the stock indexes decline for 7 straight sessions, so a bounce is not altogether surprising. The long-term trends however are still very much intact so how long this bullish move continues for remains to be seen.

Friday saw some bullish retail numbers coming out which is possibly lifting the mood and today is “Cyber Monday” where retail figures normally continue to do well especially with shoppers seeking bargain deals in tough economic conditions. However, normal is nothing something that cannot really be aimed at the current economic situation or the markets, which for the most part this year have been anything but normal. This was typified last week by the normally bullish Thanksgiving week being the worst since 1932. Therefore the seasonal argument for December being bullish and people starting to look for the much-discussed Santa Claus rally in late December does come into question. Time of course will tell

This week’s financial spread betting update begins with:

The past week was a shortened trading week due to the US Thanksgiving Holiday and it was a negative week for stocks and commodities but a bullish week for the dollar.

The long-term trends remain in place, and are down for stocks and commodities, and up for the dollar and interest rate futures…….…continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

In what is historically a fairly bullish week in the build up to the US Thanksgiving Holiday on Thursday, the markets have very much got off on the wrong foot and at the time of writing are sharply lower. In this week’s update we wrote that trading off seasonal tendencies alone is not a sufficient reason to take or not take trades, and although things can soon change in the current market climate, that view is being borne out this morning.

As ever, the inverse relationship between stocks and the dollar continues, with the dollar rising as stocks fall. The other safe haven currency is the Yen and that is also rising this morning. For now the Swiss Franc’s status as a safe haven is off the table following the SNB’s intervention several weeks back. In addition, a rising dollar is negative for commodities as commodities are priced in dollars, so dollar strength is sending commodities such as Gold and Crude lower this morning. There is therefore a lot of red on the trading screens this morning!

The long-term trends remain in place, and are down for stocks and commodities, and up for the dollar and interest rate futures.

This week’s financial spread betting update begins with:

The week ahead will be a shortened trading week due to the US Thanksgiving Holiday on Thursday. US markets are closed on Thursday and Friday is a shortened trading Day.

Last week we wrote that many markets were in trading ranges are were approaching support/resistance levels and that there could be several breakouts, and we saw that this past week and the same still applies for the week ahead as more key levels look set to be tested…….…continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

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

In early trading this morning the dollar is once again gaining ground and regaining some of the losses seen during the latter part of last week. The long-term trend continues to favour the dollar almost across the board. Further dollar strength, should it come, will lead to a test of some key support/resistance areas against several of the major currencies and any breakouts may lead to some decent moves in favour of the dollar, which would pressure stocks and commodities. So far this morning, in spite of mild dollar strength, stocks and commodities are higher.

That said, we are in a seasonally bullish time of year and due to the normal inverse relationship between stocks and the dollar (as well as commodities) any stock rallies would pressure the dollar once more. As we write in this week’s update, the market to focus on is the S&P 500, with resistance around 1300 and support around 1200. A break of either of these levels will likely lead to a clearer picture.

Since last week’s update both the Greek and Italian PMs have both resigned and that goes to further emphasise the troubles within the Eurozone, which don’t like to be improving anytime soon.

This week’s financial spread betting update begins with:

The long-term trends still remain intact across the 4 primary sectors of stocks, commodities, forex and interest rate futures but many markets are in short term ranges and possibly on the verge of breakouts. Currently these trends are down for stocks and commodities, and up for the dollar and interest rate futures…….…continue reading by clicking here

Good trading

Phil Seaton

P.S. Click here to find out more about our financial spread betting system

P.P.S. Click here for more information on our dedicated forex system.

In our last post of spread betting strategies for Gold, posted Friday morning, we wrote that Gold was in a trading range between $1200 and $1175. Later on that day Gold actually pierced $1200 resistance intra day but was unable to stay above that level and proceeded lower.

On Monday the market was lower again and yesterday we got a downside breakout through support at $1175 (August contract). IG Index is now quoting Gold on the December contract so we now shift our focus to December’s contract. There is actually only $3.80 difference between the 2 contracts, with last night’s close on August at $1158 and December’s at $1161.8

Looking at the December contract there is some support at $1161, which is right where last night closed. In early trading this morning the market is around $5 higher at the time of writing this. Slightly below that support level we also have the 200 day moving average, which may also provide support. The 200 day moving average is currently sitting at $1150.

Candlechart pattern wise we have 3 consecutive red candles, which indicates 3 straight down days, with yesterday being a log red candle for the large move down from highs of $1190, down almost $30 in the day to $1161.8.

The short term is without doubt down, but the long term trend is still up and the market is above the 200 day moving average, which many traders will be watching. There are still other levels of support in this market that need to be cleared before a long term change of trend to down is confirmed, so for now we are sitting on the sidelines in this market. Longer term we’re still therefore only looking at spread betting strategies from the long side, but will need to see a move back above $1222 before there is any upside momentum.

Good trading

Phil Seaton

PS. Find out more about LS Trader financial spread betting system and our spread betting strategies by clicking here.