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

The week ahead could be an interesting one as there are a whole series of events and data releases due. Tomorrow we have the US mid-term elections and then on Wednesday we have the US Federal Reserve announcing their policy and the expected second round of quantitative easing. Next we have the Bank Of Japan meeting followed by the Bank of England and the European Central bank meetings. Then to round the week off we have the US employment data on Friday!

All I can say is that I’m glad that I don’t trade based on news events and fundamentals as sorting through that lot would be a nightmare. Instead we just follow the trend and let the market and the price be our guide. This is a far more effective strategy than firstly guessing what these announcements will all be and secondly, more importantly, what the market’s reaction to the events will be. The only thing for certain is that it should be an interesting week!

This week’s financial spread betting update begins with:

Stocks remained pretty flat for the week and seem to be waiting for next week’s event with the US mid-term elections on Tuesday. Then on Wednesday the Federal Reserve announces its quantitative easing policies. The dollar index has also been pretty flat ahead of next week’s events…..….continue reading by clicking here

Good trading

Phil Seaton

PS. Find out more about our financial spread betting system for stocks, commodities and forex by clicking here. The system comes with a 30 day money back guarantee. Click here to sign up.

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

As we had written in last week’s post, the past week was an interesting week as expected. The US Federal Reserve meeting sent the stock markets higher and the dollar lower by underlining the Fed’s commitment to easing and supporting the economy. This also led to Gold hitting our $1300 target. So far today the markets are relatively quiet.

In the week ahead we will get a clearer idea as to whether stock indexes are going to continue higher as they approach further resistance levels and will also see if Gold can close above $1300 and continue to advance.

This week’s financial spread betting update begins with:

The past week has seen the US dollar continue to move lower against the majors, commodities continue to push higher and continued short term strength in the stock indexes, pushing stock indexes to 4 month highs. The long term trend is currently mixed for stocks but up for commodities and down for the US dollar…….continue reading by clicking here

Good trading

Phil Seaton

PS. You can sign up for a risk free trial of our proprietary financial spread betting system by clicking here. The system comes with a 30 day no questions asked money back guarantee and covers each of the stock, commodity and forex markets discussed above.

Last week legendary hedge fund manager Stanley Druckenmiller announced his retirement from the investment world and stated that he was going to close down his Duquesne hedge fund. Druckenmiller was part of the team (along with George Soros) that broke the Bank of England in 1992 when they bet that the British Pound would fall against the Deutschmark and racked up profits on the day of around $1 billion. Druckenmiller cites his reason for retirement as his inability to make out-sized returns over the past 3 years due to very unfavourable market conditions.

Now, I don’t know what his issue was in 2008 as our spread betting system had a record-breaking year and there were a lot of very good trending markets across many different market sectors and this enabled our trading system to have its best year on record. 2009 and 2010 I can understand though as market conditions have been tough for everyone due to excessive volatility and global uncertainty.

The question is, what does this say about the future of hedge funds and the future of trend following? Whilst many believe that this is a bad sign if someone of the knowledge and experience of Druckenmiller has struggled to make money I actually take the opposite view. My belief is that Druckenmiller quitting is actually a great sign for future performance of hedge funds and especially trend following systems and funds and my reasoning is as follows:

All trading systems regardless of what they are based on will go through periods of good performance and periods of lesser performance. This is down to the nature of the markets and the fact that no strategy can be effective in all market conditions. Trend following systems will suffer during periods of excessive volatility and non-trending markets because they rely on good trends to make profits.

What we have seen in our own research and this is also quite well known amongst experienced traders and fund managers is that investors, especially amateur investors generally tend to bail out at the worst point, usually near the bottom of the equity curve. This is usually due to a period of poor performance exceeding their threshold for what they can handle.

At a higher level, the fund manager, also feeling under pressure from his investors and due to the need of better performance also seeks to change his strategy after a prolonged period of under-performance. Once the pain reaches a certain level amongst investors and fund managers, Druckenmiller quitting is evidence that we are at or very near that point we will then likely see mass withdrawals from hedge funds.  This will mean that moving forward not everyone is chasing the same moves and many will then use different or even opposing trading strategies. This will very likely free the markets up again and return them to a strong trending phase.

When someone of the calibre of Stanley Druckenmiller calls time on his trading due to how tough he is finding market conditions, that to me telegraphs the fact that we may be near the bottom of the equity curve and that it is in fact a great time not to quit, but to begin.

The markets essentially do one of two things, they either move directionally, i.e. trend or they move sideways, i.e. consolidate. In our trading research we have seen without doubt that following a prolonged period of one, a good period of the other follows. This is in fact quite logical and can be seen in many different markets. In 2008 for example, there were many out-sized trends in many market sectors and what has followed since has been a brutal period of consolidation.

It has always been my belief, based on my own research, that following a brutal consolidation phase, the likes of which have not previously been seen to the extent that are currently seeing, that an excellent period of trending markets will follow. These large trends could be either up or down. Trend following systems don’t care whether they are buying or selling, they can make money in up or down markets.

Now, whilst it would be foolish to say that Druckenmiller’s inadvertent timing is perfect as a contra-indicator, I wonder if around a year or so down the line we can look back and say that Druckenmiller actually came out near the bottom of the performance curve. My bet is that he won’t be far off and the next few months will tell the tale. I also would not mind betting that he makes a return to the markets himself at some stage in the future.

Until next time, good trading

Phil Seaton

PS. You can find out more about our trend following financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 day money back guarantee.

Today we are going to focus on some spread betting strategies using the 200 day moving average  and we will use the S&P 500 for our example.

The first thing to do on any market is to determine the direction of the long term trend for the market that you are looking to trade. Once you know this, you then select your spread betting strategies in the direction of the long term trend only and ignore signals in the opposite direction.

The reason for doing this is that counter trend moves have a much higher probability of not developing in to a good trend and moves against the trend are generally shorter in duration. In this case we are looking at the S&P 500, which is currently in a long term downtrend.

Each trader will have their own ways of determining the trend and this can be based on moving averages or any one of a number of indicators. One of the most popular indicators for determining this is simple moving averages. The most common time period for longer term trend analysis is the 200 day moving average. If the market is above the 200 day moving average, then the market would be in an uptrend and if below then it is in a downtrend.

I have developed my own proprietary indicators for determining the long term trend and each trader can do their own research to see which indicators and time periods they prefer. The 200 day moving average is widely used and is a good place to start, especially as many traders look at it.

On the S&P 500 September contract, the 200 day moving average is currently sitting at 1107, so as the market on Friday closed at 1070.3 this is below the 200 day moving average and the trend is down. Therefore, for the best chance of success, use only spread betting strategies from the short side.

In our last post on spread betting strategies for the S&P 500, in addition to observing the long term trend we also pointed out that the market was struggling with resistance from the 200 day moving average and the 1100 level. Since then the market had another go up towards the 1100 level and failed, moving back towards the support area at 1165 and even moving below that briefly.

Therefore, the short and long term trends are down so the odds favour lower prices in this market for now. Friday’s close at 1070.3 was a new low close for 4 weeks and this indicates short term weakness. For the short term, Friday’s lows of 1061.8 may provide support but if support here fails then we may see a move lower towards the 1000 level.

Until next time, good trading

Phil Seaton

PS. You can find out more about our financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 day money back guarantee.

Today we are bringing you an update on spread betting strategies for the S&P 500. This market has continued to be of great interest to many traders as it is the primary stock market from which the other stock markets take their direction. The only stock index not following the S&P 500 at present is the German Dax, which continues to be in a long term uptrend. That said, a major move down on the S&P 500 will very likely drag the Dax down with it.

In our most recent post on the S&P 500 2 days ago we wrote that the market had held within a range from 1127.5 to 1102 and a break out from that range could give some decent movement in the direction of the breakout. We also mentioned that we had a rising wedge pattern that added weight to an eventual breakout and that we were therefore still favouring short spread betting strategies for a breakout to the downside, especially if the market moved back below the 200 day moving average and the 1100 support area.

We have since got that breakout to the downside with the S&P 500 moving back though the 200 day moving average and through the 1100 support area, making a new low for this move at 1070.50 during yesterday’s trading. This was the lowest level for the S&P 500 in 3 weeks and we still have our next target to the downside at 1050.

What is of great interest in this market is that the major resistance level that we had been writing about for several weeks at 1129 held firm in spite of numerous attempts to break though, all of which failed. This means that 1129 may be a significant high for this market and that we remain in bearish mode as long as the market stays below this level. Because 1129 failed then the market is still making lower highs and this is also bearish.

If the market does fall to 1050 and support there fails then we will be looking for the lows formed on the 6^th July on the September contract at 1003. For now we will continue to trade the S&P 500 with the trend and that continues to be to the downside.

Until next time, good trading

Phil Seaton

P.S. You can find out more about our financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 day money back guarantee.

P.P.S For those that are interested in spread betting forex markets we now have a dedicated forex system. You can take advantage currently of a 30 day free trial to our forex system here

Today we are continuing our series of posts of spread betting strategies for the S&P 500 as the markets continue to be undecided on short term direction.

The past couple of days have seen some movement in the markets during the build up to the Federal Reserve meeting held yesterday. During that meeting the Fed downgraded their recovery outlook and said that interest rates would remain exceptionally low for an extended period. This is not at all surprising and is in line with my own fundamental view on the markets long term.

Since our last post, the S&P 500 has still be unable to clear the resistance level that we have been writing about for what seems like an age now. Resistance is still holding at 1129 on the September contract but at the same time any declines down towards 1100 are also being rejected and this can be seen by the long lower shadows formed on the daily candles.

The past seven sessions have therefore held within a range from 1127.5 to 1102 and a break out from that range could give some decent movement in the direction of the breakout. We also have a rising wedge pattern that is moving in to a narrower range and this also adds weight to a decent move from the eventual breakout. Long term the trend is still down for the S&P 500 so I’m still favouring spread betting strategies from the short side only and will continue to do so until we get a change of long term trend to up and that is some way off at present.

The 200 day moving average is currently sitting at 1106 on the September contract which is just below yesterday’s lows. Therefore this would be the first downside target, followed by 1100. If the market can break down through this support area then we may see a continuation lower towards 1050.

Until next time, good trading

Phil Seaton

PS. You can find out more about our financial spread betting systems and spread betting strategies by clicking here. Our system comes with a full 30 days money back guarantee.

This week’s financial spread betting update is now available and can be read by clicking here. The weekly update is to bring you up to speed on what has been happening in the markets over the past week as well as what to look out for in the coming week so that you can plan your spread betting strategies accordingly.

During the past week we saw continued weakness for the US dollar and an overall rise for the stock markets. The S&P 500 stayed below the key resistance level of 1129 but will likely test that level this week and possibly as early as today as the futures are opening higher at the time of writing this on Monday morning. European stocks indexes, in particular the German Dax, have continued to rise, and the Dax has reached its highest level in almost 2 years.

The best trending markets continue to come from the interest rate futures sector and all of the markets in this sector remain in a long term uptrend.

The biggest moves of the week came from the grains sector and we saw some limit moves from Wheat as well as higher prices virtually across the board from the grains markets.

This week’s financial spread betting update begins with:

The past week has seen US stocks continue to move higher but still remain within the overall lateral trading range. Last week’s US jobs figure sent the markets tumbling at the US open on Friday but then show a strong recovery. We may see a breakout for stocks this coming week..….continue reading by clicking here

Good trading

Phil Seaton

PS. You can sign up for a risk free trial of our proprietary financial spread betting system by clicking here. The system comes with a 30 day no questions asked money back guarantee and covers each of the stock, commodity and forex markets discussed above.

Today we are looking at bearish price patterns and spread betting strategies. We will base this primarily on the S&P 500 as that is the primary stock index that we focus on. The reason we do this is that the S&P 500 is the real stock market and the other indexes tend to take their cues from the S&P 500.

There have been a few key levels and indicators in the S&P 500 that we have been writing about of late. We have previously been focusing on resistance from 1100 when the market was below that level and also the major resistance at 1129.

Friday’s close on the September S&P 500 contract was bang on 1100 and this week continued the recent short term strength and pushed up above 1100 and the 200 day moving average. This was relatively bullish short term and the market continued higher to 1118 on Tuesday. Critically, this move fell short of resistance at 1129, so the short and long term trends remain down. This means that only bearish spread betting strategies should be considered at this time as the odds favour lower prices.

Considering the recent strength and the fact that this market cleared 1100 and the 200 day moving average we should perhaps have seen more follow through and an actual test of 1129, but the rally fell short. We also have an evening star pattern formed in this market over the last 3 sessions, which is a bearish reversal pattern and suggests a top in the market. When we have an evening star, we use the top of the pattern as resistance, which in this case is Tuesday’s high of 1118. If the market moves above 1118, especially on a close, then this pattern is negated and a likely test of 1129 resistance will probably follow.

Yesterday’s price action also took the market back down towards support at 1100, with a low for the day at 1099.5, before closing at 1102. This is once again right on the 200 day moving average as well as support from the 1100 level. In the short term then this market can clearly go either way and the levels to watch are 1100 to the downside and 1118 and 1129 to the upside.

As long as 1129 resistance holds, this market is in a bearish set up and the long term trend is down, so we’ll continue to favour spread betting strategies from the short side and reject longs for now.

One other point of interest, certainly for UK residents who use spread betting is the bearish formation on the FTSE. The FTSE is not a market that I like because of its lack of trending properties, but I know many traders in the UK follow it. On Tuesday we had a shooting star pattern, which confirmed resistance at 5385, followed by a bearish engulfing pattern on Wednesday. This suggests a top in this market, and as long as 5385 resistance holds then bearish spread betting strategies should also be favoured here. The long term trend in the FTSE is also down, as with the S&P 500.

Until next time, good trading

Phil Seaton

PS. You can find out more about our financial spread betting systems and spread betting strategies by clicking here.

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.

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

During the past week we saw weakness in the stock markets followed by renewed strength in to Friday’s close. The S&P 500 closed right on a key level and the coming week promises to be an interesting one.

Recently on this site we have been focusing in particular on two markets, gold and the S&P 500 and spread betting strategies for those two markets. We have an update on both of these two markets in the weekly update. We also have a look at Crude, which continues to trade within a wide range, we well as our usual forex market focus.

The past week saw another week of declines overall for the US Dollar, albeit not by much as well as a strong finish to the week for the British Pound which has been strong of late and may be on the verge of a long term trend change to up having been in a downtrend since September 2009.

We also have an update on the strongest and best trending sector at the moment, which is the interest rate futures and includes markets such as the 5 & 10 year T notes and the 30 year bonds. Each of these markets made new contract highs during the past week. At LS Trader we have been long these markets and this sector on the whole since early May.

This week’s LS Trader financial spread betting update begins with:

The past week saw the stock markets move lower early in the week and then recover on Tuesday. The week ahead promises to be interesting as the stock markets are now sitting at a key short term level and could move either way over the next few days.….continue reading by clicking here

Good trading

Phil Seaton

PS. You can sign up for a risk free trial of the LS Trader financial spread betting system by clicking here. The system comes with a 30 day no questions asked money back guarantee and covers each of the stock, commodity and forex markets discussed above.