The FTSE 2006

[mark twain uk]

i dont mean to **** on your bonfire here, but there is the same cost of carry associated with futures...approximately the same rate as the charge on holding a "cash" position.

as the quarters develop, the difference between the cash price and the futures price diminishes.. this is due to the time erosion of the futures contract.

FC

I think it is cheaper to hold a June SB long position than to hold the equivalent cash position until then, but I will check and come back, the finspreads website is down at the moment.

 

[ukhero]

Well its a bad day for the Indices. Take note wstockuk!

Well, that's all my June Longs taken out for the FTSE and the Nikkie, and my Dax is hanging on by its little Durch Sprung finger nails.

As to my FTSE daily [Long], it got well and truly smacked.

In all, not a good day.

My only saving grace is, I took time out yesterday to adjust all the stop gaps, a lesson learned many moons ago and one which has been highlighted many times by the astute members of T2W, and so my daily loss is minimal compared to the annoyance of re-starting my June Longs.

looking to rejoin the party.

UK

 

[mark twain uk]

FC,

I double checked with my finspread account and I am only charged interest on the cash positions, I am currently short a March contract and it does not show any charges. Of course you pay more when you open the position, but overall it works out cheaper.

 

[Slim Sladey]

Evening guys, thought i would try and contribute to the tracker/SB discussion.

It would seem that everyone is in agreement that its prob not the best idea to put all your eggs in one basket.

Personally i had £15k of excess cash, of which i put £11k in to doing my house up, thinking this should add £15k value to property in time, leaving me £4k willing to lose on SB. This is my personal preference, others will have different views, but i think this gives me

1. Potential with the SB to grow
2. A nice place to sleep (maybe 😉 )

so overall £15k fairly safe in long term.

Futures or daily :?: I use both. Firstly when getting into the trade i try and decide two things from a which product point of view,

1. Which way am i going, long or short :?:
2. How long am i expecting to hold this for :?:

If long, given the interest charge for holding overnight i would generally use the futures, unless i am only planning to hold this for a short period (generally less than 2 days) as after that the interest becomes more costly than the extra spread on the future ( i say when expecting a quick bounce back (ala FTSE 1/12/05 🙂 )

If short i would generally use the daily as this credits interest to my account and has the tighter spread regardless of length of time. The only exception to this is that my SB company (Capital Spreads) charges a dividend adjustment on only the FTSE every week on the over-Tuesday night position, i do not know how to predict what this adjustment would be, and they say that they cant tell me (though they seem to be able to know what it is to take it!) I've have seen it range from <1 point to 12 points on my various trades so as a rule i generally dont trade FTSE daily overnight if expecting to hold it open over Tuesday night, instead i use the future.

As far as the carry cost of the futures is concerned, longest ive held a trade for is around 8-10 days, so ive never been that close to the daily and futures converging. Similarly when they are close to converging, say in Dec, i would generally opt for the March future instead.

Having said that if i'm reading FC's post right, i would assume that as say the FTSE future is ahead of the daily, as the future comes closer to expiry, with each rise in the daily there is a smaller rise in the future, leading to the future being rained in. Is this right FC, if you could clarify my understanding that'd be appreciated? If it is i could be in a good position, i'm well up on the Nikkei, leaving it to run, and the Nikkei futures are behind the daily, so as im long presumably the closer to expiry the more the future gains? Doubt i'll hold til the end though :cheesy:

The real slim sladey

 

[ukhero]

The FTSE Wednesday, 11th January 2006

Tuesday's results:

Open: 5731.

Close: 5688, down 42pts. I fell foul to the profit takers today, as did many others.

Range: 5686 - 5731.

Last 5 trading days: up 7pts. Seems to be dragging it legs at the moment.

On the month: up 70pts or 1.25%. Falling behind my bold prediction!

Dow: 11,011, down 0.32pts.

Last 5 trading days: up 168pts.

On the month: up 293pts or 2.73%

News items of note:

FT.com - 'London hit by weak banks and miners. London’s leading shares lost ground on Tuesday, as Marks & Spencer fell after it remained cautious on its immediate prospects despite stronger festive sales.' - Damn those profit takers!

WASHINGTON (AFP) - 'The Iraq war will likely cost the United States between one and two trillion dollars, despite earlier assurances by the White House that these expenses would be manageable, according to a new study co-authored by a Nobel Prize-winning economist.' Read the rest: http://uk.news.yahoo.com/10012006/323/iraq-war-cost-trillion-dollars-study.html

Charts, and nothing but the charts: Tuesdays had a strong possibility of a rise! And the same for Wednesday! Don't yer just luv charts.

Companies reporting:

BAA
BOVIS HOMES
BP
BURBERRY
MATALAN [I'm anticipating poor results]
MORRISON
SAVILLS
TAYLOR WOODROW
HOUSE OF FRASER
MOTHERCARE

Economic Data:

09:30 UK Trade in Goods & Services

The FTSE tomorrow based on present news and data: the DOW's had an evens day, so no favours there; charts say a rise; a mixed bag of companies reporting, which, together, should add a minor rise all being well, this is assuming that the profit takers are all headed home and the bulls are waiting in the wings.

Early gut feeling: a rise.

Will I bet? After yesterdays fiasco I should be curled up in front of a fire licking my wounds, not a chance, I've gone Long prior to the market closing and set my stop gap at minus 12pts.

Also, my June Long for the Nikkie and the FTSE crumbled today. Too tight a stop gap. We learn. Looking for the right moment to join again.

If you are betting: make your own decision, watch the markets open and do read the news for clues as to which way the FTSE may go.

Yours

UK

 

[mark twain uk]

there are five retailers reporting today, it will be interesting to see just how good a Christmas they had, should some come out with disappointing figures the overall rosy view about retailers having a good time may change

 

[ukhero]

there are five retailers reporting today, it will be interesting to see just how good a Christmas they had, should some come out with disappointing figures the overall rosy view about retailers having a good time may change

Agree,

Although initially I said that retailers had a bad Xmas, the sales thereafter have made up for it. In all, I still say its going to be a hard year ahead for the majority of retailers. Thankfully, there's plenty of other sectors to choose from.

UK

 

[ukhero]

The FTSE Thursday, 12th January 2006

Wednesday's results:

Open: 5688.

Close: 5731, up 42pts. An exact reversal of yesterday.

Range: 5688 - 5731.

Last 5 trading days: up 17pts.

On the month: up 113pts or 2.01%. Well behind my forecast.

Dow: 11,043, up 31pts.

Last 5 trading days: up 163pts.

On the month: up 325pts or 3.03%

News items of note:

LONDON (Reuters) - 'A complete ban on smoking in all English pubs and clubs looks increasingly likely after the government said on Wednesday it would allow its MPs to vote according to conscience and not along party lines. The move averts a likely parliamentary revolt and possible defeat for Prime Minister Tony Blair, whose plans propose a smoking ban which would exempt pubs which do not serve food.' - If the ban goes ahead, we'll see a dramatic drop in the share price of tobacco related companies and an increase in those little sticky patches. I wonder who makes them?

UK Hits Worst-Ever Trade Deficit:

Sky Business - 'Britain recorded its worst-ever monthly goods trade deficit during November as the oil account slipped into the red for the fifth month running.The trade-in-goods deficit stood at ?6bn in November from an upwardly revised ?5.1bn in October, the Office For National Statistics said. "The overall trade performance was dragged down by a fifth successive deficit in oil trade and a reduced surplus in services," noted Global Insight economist Howard Archer.

The reading was worse than analysts' consensus forecasts of a £4.7bn deficit. A larger-than-usual increase in non-EU imports was mostly due to the purchase of aircraft, consumer goods other than cars, and precious stones, the ONS said. Further damage to the trade-in-goods deficit came from the oil account, which has traditionally been well in surplus since North Sea oil came onstream in the late 1970s.

The November oil account was in deficit to the tune of £100m against October's shortfall of £200m - October's oil account was originally a surplus. Because of the October revision, the oil account has now been in deficit for five consecutive months for the first time since comparable monthly records began in the 1980s. Britain is facing the prospect of recording its biggest annual trade-in-goods deficit this year, subject to no major revisions to previous data, the spokesman added.

So far the deficit in 2005 stands at £58.5bn against £60.4bn for the whole of 2004.'

Interestingly enough, the markets picked up momentum shortly after the news release, and as it seems, even flag waving failed to deter the bulls from their bargains!

Charts, and nothing but the charts: Wednesday stated a rise. Thursday, a weak indication of a rise.

Companies reporting:

Amec
Boots
Carphone W
GUS
HMV
Informa
Petrofac
Photo-me [expecting good results]
Sainsbury
SIG
SIGNET [12:30pm, all others pre Mkt]
Spectris
Taylor Nelson
Travis Perkins

Economic Data:

09:30 UK Industrial Production (month) Nov

12:00 UK BoE Rate Announcement Jan [Conflict over this release: one web site says today another says Friday!]

The FTSE tomorrow based on present news and data: the DOW's up but don't expect any favours in the morning; charts say a weak possibility of a rise; another mixed bag of companies reporting in which I'm expecting an overall positive towards the market; Business news doesn't sound too good; economic news is the one to watch.

Early gut feeling: neutral.

Will I bet? If not for the economic news I'd go Long tomorrow. As it is, I'll wait and see which hat the FTSE wears.

P.S went a June Long on the Nikkie and its looking handsome. 😆

If you are betting: make your own decision, watch the markets open and do read the news for clues as to which way the FTSE may go.

Yours

UK

 

[Morris]

Notice you compare the FTSE to the Dow, but the SPX is a better comparison. A much broader index and the one the pros watch.

 

[richb]

great job

Well done UK hero i like what you are doing, 3 cheers from me.
I tend to not trade the ftse as there is not enough movement for my day trading.
Also went long on the Nikkei yesterday, not because of any charts but because of the strength of the Japanese econonmy/Government/foreign investment there, and look where it used to be in 89. looking to hold for a few years. It has climbed 3000 points since October! Have you any concerns with a pull back?

 

[mark twain uk]

I tend to not trade the ftse as there is not enough movement for my day trading.

Also went long on the Nikkie yesterday, ... looking to hold for a few years.?

richb,

I hate to be a killjoy, but you don't day trade the ftse because there is not enough movement but you are looking to stay long nikkie for few years? There is something not quite right here. 🙄

 

[richb]

Mark,
Sorry to confuse you, i day trade the Dow and the crude, after a little looking around as you do, i realised the potential of the Nikkei and had a stab at a long term trade. I dont understand the markets enough to swing trade but if i could crack it, i would have a better quality of life than day trading. I hope thats a little clearer. Sorry to go off subject guys.

 

[ukhero]

Notice you compare the FTSE to the Dow, but the SPX is a better comparison. A much broader index and the one the pros watch.

I'm not au fait with the SPX and it may be a question of spots or stripes.

I've followed the DOW in regards to its effect on the FTSE for quite some time, and I'm astute enough to understand that familiarity can breed contempt, and to be honest, I've noticed over the last quarter a distancing between the two Indices, so yes, you could be right.

For now, I'll continue to follow the DOW. However, in the back ground, I intend to reserve time to study the SPX and its impact on the FTSE.

Thanks for bring this to my attention.

UK

 

[downbytheriver7]

I'm not au fait with the SPX and it may be a question of spots or stripes.

I've followed the DOW in regards to its effect on the FTSE for quite some time, and I'm astute enough to understand that familiarity can breed contempt, and to be honest, I've noticed over the last quarter a distancing between the two Indices, so yes, you could be right.

For now, I'll continue to follow the DOW. However, in the back ground, I intend to reserve time to study the SPX and its impact on the FTSE.

Thanks for bring this to my attention.

UK

Agree with that, I would put it at the end of Nov/start Dec when the DOW and FTSE started trading apart. Hoping tommorrow they will resume the trend!

My general stratgey is to follow the DOW, NDX, SPX, DAX, CAC and SMI, Just normally trade maybe 3 of them at onetime, which can work out abit more flexible at times and just look for the best oppourtunites amongst them. Anymore than that and I couldn't follow them all. I maybe have the average equivalent of about £25-50 a point open across my positions. At the moment I am short the SMI @ 7775, CAC @ 4880 and FTSE @ 5724 so they are all looking abit like the stops might get triggered. The FTSE for me ironically has been my worst performing this year!

 

[ukhero]

The FTSE Friday, 13th January 2006

Thursday's results:

Open: 5731.

Close: 5735, up 3pts. I'm pleased I stayed out of it, as it was neither one way or another.

Range: 5724 - 5744.

Last 5 trading days: up 44pts.

On the month: up 117pts or 2.08%. Well behind my forecast.

Dow: 10,962, down 81pts. Overdue. Still a strong possibility of a minor fall tomorrow.

Last 5 trading days: up 87pts.

On the month: up 244pts or 2.28%

News items of note:

Sky Business - 'The UK economy has received a boost with data showing the country returned to its position as an oil exporter. Trade in oil showed a surplus during October, helping the UK's trade deficit with other countries to narrow far more than analysts had expected. The overall gap in the trade of goods narrowed to £4.6bn last month - £1bn less than the deficit for September, the Office for National Statistics said. It followed news last month that the UK had shipped in more oil than it sold overseas for two months in a row.

Experts said the better-than-expected figures were good news for the Bank of England, which has been waiting for this kind of reversal."The data provides some cheering news for the UK economy, which up until now has not seen any significant support from the export sector," said economist Gavin Redknap. He believed the trade picture should continue to improve, although it did not necessarily mean interest rate cuts were off the agenda.

The goods trade gap was the narrowest since June and well below City forecasts of £5.3bn.

Overall, the UK's deficit on trade in goods and services narrowed in October to £2.9bn compared with a gap of £3.9bn previously.'

Sky Business - 'The property market is likely to stay subdued during 2006, with prices increasing by between 0% and 3%, says the Nationwide.It was "cautiously optimistic" about the housing market over the coming year, expecting it to be "fairly stable".But it added that,following rapid price increases during the past nine years, it would take a long time for property to become affordable again and this would act as a brake on price growth.' - This is good news. Instead of investing in property, investors will / may buy shares.

Charts, and nothing but the charts: Thursdays had a weak indication of a rise. Friday, two separate charts agree that it can go either way. Not much use there!

Companies reporting:

Bodyshop
Carpetright

Economic Data:

None.

The FTSE tomorrow based on present news and data: the Dow took an anticipated tumble today which may create a minor dip early morning, but in general, no adverse effect; charts are at evens; no major company or economic news of market significance; look to early morning news reports as to the FTSE's direction.

Early gut feeling: another neutral.

Will I bet? No. I'll wait for a clearer day.

Historical data: Last year, ignoring even days [less then 3 points either way], Friday observed 31 rises against 15 downs. Interesting!

If you are betting: make your own decision, watch the markets open and do read the news for clues as to which way the FTSE may go.

Yours

UK

 

[ukhero]

Well done UK hero i like what you are doing, 3 cheers from me.
I tend to not trade the ftse as there is not enough movement for my day trading.
Also went long on the Nikkie yesterday, not because of any charts but because of the strength of the Japenese econonmy/Government/foreign investment there, and look where it used to be in 89. looking to hold for a few years. It has climbed 3000 points since October! Have you any concerns with a pull back?

Thanks for the clap!

In regards to the Nikkei: at the moment we are in a period of hesitancy and house clearing, in that, there's a lot of shacking to get rid of the hangers on, but for the long term, I agree with you. In 2006 the Nikkei market is the one to bet, according to a group of growing annalists. But I will add, it all a question of entry and exit.

UK

 

[downbytheriver7]

Thanks for the clap!

In regards to the Nikkei: at the moment we are in a period of hesitancy and house clearing, in that, there's a lot of shacking to get rid of the hangers on, but for the long term, I agree with you. In 2006 the Nikkei market is the one to bet, according to a group of growing annalists. But I will add, it all a question of entry and exit.

UK

Adding to the crowd, I am looking for a pullback on the Nikkei to go long. FTSE wise today,w ell its starting to look abit toppy here.

 

[downbytheriver7]

Adding to the crowd, I am looking for a pullback on the Nikkei to go long. FTSE wise today,w ell its starting to look abit toppy here.

Closed my shorts earlier and looking to reshort if we come back of the lows. Anyone seeing this as a dip to buy?

Always a good read first thing in the morning:
http://futures.fxstreet.com/Futures/market/stockindices.asp

 

[FetteredChinos]

Closed my shorts earlier and looking to reshort if we come back of the lows. Anyone seeing this as a dip to buy?

Always a good read first thing in the morning:
http://futures.fxstreet.com/Futures/market/stockindices.asp

yup, looks like turning into a nice trend day down..

i am likely to be buying the close today and holding for a week til next thursday on the eve of option expiry..

FC

 

[downbytheriver7]

yup, looks like turning into a nice trend day down..

i am likely to be buying the close today and holding for a week til next thursday on the eve of option expiry..

FC

So your in the base building camp?