Greater London, England -- (SBWire) -- 12/24/2010 -- Spread betting and CFD trading expert Sandy Jadeja of City Index (http://www.cityindex.co.uk) gives his review of the markets in 2010 – along with a few thoughts for 2011:
"2010 was a nervous start for many traders and investors. With the FTSE 100 trading at 5402, many were convinced that 5000 would be a price target that would be met very soon. Instead the index rallied into April to reach a high of 5833 before declining for 11 weeks into a low of 4790. With a decline of -17.89% the street was awash with bearish sentiment once again. However, this proved to be a turning point and has since seen the index rally +23.22% and is now on target for the all important 6000 level.
Interestingly the sentiment is now very bullish and may be viewed as a bearish contrarian omen. Unless the index maintains the 6000 level for 3-5 weeks this could mark a turning point from both a Pattern and Price objective. The third dimension of the market is Time. Mid January from 17th – 25th is showing a short term time cycle and may prove to be a minor turning point. Importantly the months between March – April are coming up as key cycle dates and could mark the start of another major bearish move. But for the present moment as long as the index holds above 5505 there is still room for further upside movements.
Gold has been the favourite commodity of 2010 and has shone brightly. The real question is if $2000 per ounce will be reached during 2011 and some analysts are even forecasting $6000 per ounce. If one takes a look at the Monthly chart then the fear could set in for a parabolic break. A technical view is that there could be a Major five wave pattern completing allowing for a decline of more than 38% over the next year or so. The metal will need to hold above $1305 in order to target $1500 between January to March 2011. Momentum remains bullish but with caution as there is a clear divergence between current price levels and underlying strength.
Crude Oil has picked up strength after the major decline from 2008 – 2009. This past year has seen oil consolidate in a $10 range and finally break to the upside. This now sets the stage for the bulls to test the key $100 per barrel. Beyond this we have a possibility of seeing oil head much higher towards the $123 - $128 per barrel level. Momentum is picking up and the current pattern suggests that we could be looking at a classic ABCD formation supporting higher prices. 2011 is likely to see activity pick up in the energy sector and lift oil prices higher.
Sterling against the US dollar has taken a slight dip in 2010 but this may turn into a problematic situation if we do not clear above 1.6300 as momentum is seriously weak at present levels. The downside target of 1.5254 – 1.5012 is looking certain if we continue to trade lower. Most technical indicators on the intermediate term charts are supporting lower prices on sterling and a rising dollar at least for the first quarter of 2011.
The Euro has been written off by many traders over the last half of 2010. The next few months should be interesting for this currency. If we do not see a =swift recovery above 1.4282 then we could expect to see a weaker currency by March 2011. There is a strong support level at 1.200 which is looking ripe for the bears and possibly even 1.1000 could be on the cards if a sudden sell off takes place.
The year ahead is poised for volatility but is likely to bring ample opportunities for both the bulls and bears alike. One thing is for certain and that is the markets will not stand still and the uncertainty factor will be a major headline for next year as markets struggle to find their balance between Major support and resistance levels."
Prepare for trading in 2011 with a free City Index spread betting seminar at http://www.cityindex.co.uk/learn-to-trade/seminars.aspx.
About City Index
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFDs and in the UK spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative mobile spread betting and CFD trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support.
Spread bets and CFDs are leveraged products which can result in losses greater than your initial investment. These products may not be suitable for all investors and you should ensure you fully understand the risks involved.
For more information, visit http://www.cityindex.co.uk/.
The Spread Betting and CFD Trading Review of 2010