Trading the FTSE 100 in 2009 aving started 2009 with respect to moving serenely through the gears, financial markets are now apparently stuck in reverse, with little apparent optimism of the immediate road ahead.
With renewed negative data come to you, the 100 looks like it will FSTE regularly test the level of 4000.
In mid January in the United Kingdom Financial Services Authority has lifted the ban on short selling financial stocks. Before lifting the ban, investors have sold everything they could, perhaps a slight overreaction.
If all investors now selling shares of the banking sector? Currently, the real problem seems to be concern about the state of balance sheets. And it does not seem to go away.
While some retailers have reported sales of Christmas reasonable, many have not. It seems that buyers tightened the purse strings earlier than expected, once again led to worries that the slowdown this year could be much worse than expected.
It should be noted that the stock market rallies in early 2009 have been trading volume light.
As Simon Denham of the financial gap said, "We are still in a bear market if someone likes it or not, and the rebound from the 2008 low in November lasted 30 days in total. It is found that the average time the last bear market rallies
"Technically, the bears are still in control and from a fundamental point of view of the hot air from our politicians seems to be just that. And the market does not like. Many packages that the government gives the private sector are only increasing mountains of debt. Very collateral loans but companies that take them will be repaid, and probably at unfavorable prices.
Are these loans just to keep non-profitable small businesses and limped off the inevitable cemetery that awaits them? In this current climate that is most likely to be the case.
Unfortunately, the damage has been done, and the speed with which it occurred, means that the recovery takes much longer than normal. A test of the FTSE 100 index of all time that faltered in 2007 could be confined to history books for some time.
It is clear that the actions of the exercise of their own will not be able to stimulate the economy faster so that any other course of action must be considered. What is worrying is that our central bankers and politicians seem to think that the capitalist system that has actually been compromised by huge mountains of debt and borrowing can be rescued by large amounts of debt and borrowing .
There is little doubt that we will be paying for these recovery plans for most of our lives and perhaps our children too.
While investors should do? I love the principle of sitting on my hands and watching the markets move from the sidelines. For now, market fundamentals look terrible and I see little upside. On the downside, the FTSE level support 100 of 4000 seems to continue. If you must trade, then maybe a little bit of issues, short term paris spread to take advantage of market volatility. Some trading range may be the order of the day.
Spread paris with a high level of risk to your money and may not be suitable for all types of investor. You can lose more than your initial investment so make sure you only speculate with capital that you can afford to lose. Also, make sure you understand the risks involved and seek independent financial advice if necessary.
Posted on February 6, 2010.
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