Archive for October, 2011

Time for a breather?

Sat, 29th Oct 2011 Leave a comment

FTSE-100 at 28th October 2011The FTSE has risen over 15% in the last three weeks in anticipation of a solution to the Eurozone crisis and has now hit its 200 day moving average (the red line). 15% is a long way to go without a correction and the 200 dma is a likely place to turn so could we be at a local maximum? John C Burford, the Money Week trading guru, makes a case for this on the Dow and where the Dow goes the FTSE usually follows. I disagree with him though, on his view that we will see no further highs, as I think the Eurozone fudge will keep sentiment positive at least until the end of the year. Despite the market’s surge on Thursday in response to the Eurozone’s announcement, the deal that was presented really just buys more time and I think, when this sinks in, the euphoria will die down. The problem is that many Western countries have built up too much debt, i.e. more than they can service, and the only things that can reduce this are austerity packages to reduce government spending or economic growth to increase its income. Either way debt needs to be paid down, but borrowing is still increasing! Italy has promised to balance its budget so that it can keep borrowing flat, but there is considerable doubt as to whether Mr. Berlusconi can deliver on this promise. And really all Western countries need to start tackling their budget deficits, pre-emptively, rather than waiting for the markets to start getting jittery about them. However, with growth in short supply and citizens having got used to the current, unsustainably high spending levels and having little stomach for austerity, there is no easy solution, long term. So the plan to continue lending to these countries is just a temporary fix to keep them afloat for a while longer.

I suggest a dip of around 250 points or so is likely here, though I am not going to bet on it as I am not presently prepared to go against the trend, since this is always risky. I will be interested in buying in should we see the index go below the 20 dma (the green line). The conspirators are dead against selling here, so hopefully I am right!

Categories: Betting, Lunacy, The Economy

Coming to my senses?

Thu, 13th Oct 2011 Leave a comment

FTSE-100 at 12th October 2011I’ve closed yesterday’s bet at a 27 point profit after having second thoughts about the rash nature of it. I missed out on the recent bounce which was the obvious bet to make after the Dow hit my target low and theĀ  FTSE broke out of its downward tramlines. I have allowed the conspirators to talk me into making a highly speculative bet (it is very difficult to call this sort of top) in order to make up “lost” ground and I regret it now.

Categories: Betting, Lunacy

All good news priced in?

Wed, 12th Oct 2011 Leave a comment

FTSE-100 at 11th October 2011President Sarkozy and Chancellor Merkel have announced that they are going to save the world by the end of the month and markets have rebounded strongly in response. I can’t think why, given the EU’s habit of disappointing them! The FTSE has reached the top of its recent trading range and seems ripe for a fall, which the conspirators are adamant will happen. I have sold December FTSE at 5404 (index at 5432) with a 100 point margin even though listening to the conspirators nearly always costs me money.

Categories: Betting, Lunacy

A modest profit

Wed, 5th Oct 2011 Leave a comment

I have closed my bet at 5017 for a 56 point profit. The decline of the last few days had been trading between a nice pair of tramlines, but broke through the upper line overnight so I decided to take profits this morning. Not what I had hoped for, though the FTSE may still reach my target; it’s just difficult to say how high it is likely to go first. I thought about closing yesterday when the Dow hit its August intra-day low of just over 10400 and I could have had a 200 point profit, but I didn’t as it seemed likely that, having got this close, the Dow would hit 10000 at some point. So, there’s always next time!

Categories: Betting