hereward the wake
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morning all
hereward the wake
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P
postman
Dax wants to go up Dow wants to go down - this should be interesting.
P
postman
Given the Dow is not following the Dax up I think this short rally on Dax is soon going to be over.
Taken a half position short on Dax @9137 will add to it later.
Taken a half position short on Dax @9137 will add to it later.
Jessi_trader
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long @ 504
P
postman
P
postman
Added a second short @ 40
hereward the wake
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hey no SD today?
P
postman
Dump it ! IMHO.
hereward the wake
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Dom today
The Santa Clause
There's a distinct lack of festive cheer in the air just now. Less than halfway through the 49th trading week of the year, the S&P 500, FTSE 100 and DAX 30 are 1.4, 2.6 and 2.1 per cent below their previous week's highs. This has triggered a predictable bout of fretting over whether the customary Santa Claus rally will happen or not this year.
As one who remains bullish on the near-term outlook, I have to welcome the little sell-off we've seen so far. I think that it boosts the odds of a year-end rally, rather than lowering them. The DAX in particular was looking overbought. Its relative strength index was above 80 per cent. That has been cut back to around neutral.
Put simply, this is preparing the way for a later sleigh-ride. The Santa Claus rally in my understanding is a phenomenon belonging to the 52th trading week of the year. (And also to the 53rd in certain years where there is one.) The FTSE 100, for example, has produced an average return of 1.2 per cent in the 52nd week over the past 30 years. The index has risen 24 times out of 30.
By contrast, the 50th week - the week ending 13 December - is far more Scrooge than Santa. The index has gone up in only 13 weeks out of 30. The average return is pretty much flat. I don't know where this leaves the theory that we should go long in order to "get in early". It doesn't seem to me as if the rally has started earlier each year.
The other thing to bear in mind is that the FTSE 100 is looking pretty sorry right now, as it was even before the latest sell-off. Might it not close the gap that has opened up between it and Wall Street or the DAX? Well, possibly. But catch-up trades have never gone well for me. I'd sooner buy the present, stronger trend rather than betting on a weakling to become a he-man. That means buying the S&P or DAX.
If I were going to speculate on a turnaround, however, it wouldn't be in the FTSE 100. History suggests the FTSE 250 could be an even better bet. Since its creation, it has gone up in the 52nd week 25 times out of 27. The average gain has been 1.27 per cent. Right now, though, it is in a bit of a fix. Already in a swing chart downtrend since 5 November, it gave a repeat sell signal on Monday 2 December.
To my eyes, the current sell-off in the FTSE 250 looks very much like its last two shakeouts, in August and September-October. Both were pretty nasty at the time, but gave way to a renewed burst to fresh bull-market highs. I fancy that the same will happen this time round. Another up move of 700 points or more could be in the offing.
Aside from the swing chart downtrend in force, the other drawback is the cost of trading the FTSE 250. Spread betting firms generally charge a 30-point spread to trade this index. The feeling of going offside by this amount when you open a trade isn't a nice one. This isn't the case with the S&P or the DAX, both of which have better charts. So, while I'm bullish on the FTSE 250, I'll follow the leaders if and when Santa comes.
The Santa Clause
There's a distinct lack of festive cheer in the air just now. Less than halfway through the 49th trading week of the year, the S&P 500, FTSE 100 and DAX 30 are 1.4, 2.6 and 2.1 per cent below their previous week's highs. This has triggered a predictable bout of fretting over whether the customary Santa Claus rally will happen or not this year.
As one who remains bullish on the near-term outlook, I have to welcome the little sell-off we've seen so far. I think that it boosts the odds of a year-end rally, rather than lowering them. The DAX in particular was looking overbought. Its relative strength index was above 80 per cent. That has been cut back to around neutral.
Put simply, this is preparing the way for a later sleigh-ride. The Santa Claus rally in my understanding is a phenomenon belonging to the 52th trading week of the year. (And also to the 53rd in certain years where there is one.) The FTSE 100, for example, has produced an average return of 1.2 per cent in the 52nd week over the past 30 years. The index has risen 24 times out of 30.
By contrast, the 50th week - the week ending 13 December - is far more Scrooge than Santa. The index has gone up in only 13 weeks out of 30. The average return is pretty much flat. I don't know where this leaves the theory that we should go long in order to "get in early". It doesn't seem to me as if the rally has started earlier each year.
The other thing to bear in mind is that the FTSE 100 is looking pretty sorry right now, as it was even before the latest sell-off. Might it not close the gap that has opened up between it and Wall Street or the DAX? Well, possibly. But catch-up trades have never gone well for me. I'd sooner buy the present, stronger trend rather than betting on a weakling to become a he-man. That means buying the S&P or DAX.
If I were going to speculate on a turnaround, however, it wouldn't be in the FTSE 100. History suggests the FTSE 250 could be an even better bet. Since its creation, it has gone up in the 52nd week 25 times out of 27. The average gain has been 1.27 per cent. Right now, though, it is in a bit of a fix. Already in a swing chart downtrend since 5 November, it gave a repeat sell signal on Monday 2 December.
To my eyes, the current sell-off in the FTSE 250 looks very much like its last two shakeouts, in August and September-October. Both were pretty nasty at the time, but gave way to a renewed burst to fresh bull-market highs. I fancy that the same will happen this time round. Another up move of 700 points or more could be in the offing.
Aside from the swing chart downtrend in force, the other drawback is the cost of trading the FTSE 250. Spread betting firms generally charge a 30-point spread to trade this index. The feeling of going offside by this amount when you open a trade isn't a nice one. This isn't the case with the S&P or the DAX, both of which have better charts. So, while I'm bullish on the FTSE 250, I'll follow the leaders if and when Santa comes.
P
postman
P
postman
The Dax has its upward Grind on.
Do I wait it out or close my shorts?
Do I wait it out or close my shorts?
hereward the wake
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It might bounce off this in hours diagonal daily tl
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P
postman
Dow negative and going down, ftse negative and going down. I'm short Dax and its up and staying there.
P
postman
Jessi_trader
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Jessi_trader
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My yesterday night TA said that ftse is looking to bounce back to 6540/6550. Thats based on both 1hr and 30 mins chart.
ftse did not hit yesterdays low (cash) yet and keeping above 6500. I do not have any reason to force close yet.
But thanks for warning, I am keeping close eye.
Jessi_trader
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postman, why you think I should close? are you able to post chart?
hereward the wake
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b bands getting very tight on dax and ftse so movement one way or other soon
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