The CFD trading experts at City Index use their experience to give traders a daily overview of the financial markets. Here, Head of Equities Giles Watts gives his EU Market update for November 9th.Giles Watts of CFD trading provider City Index commented: Indices continue higher pushing past hurdles along the way. It now seems that major price levels could be well within sight if we can see positive momentum sustain at current price levels. There is still concern that sharp dips could take place if any signs of weakness appear along the way. Gold prices followed in line with indices reaching new heights but also with caution. Some traders feel that markets are currently overextended and surprises may be to the downside if we see a sharp turnaround in momentum along with breaks of support. But at present the trend remains bullish.FTSE 100 on target for 6000 …The important 5660 level held firmly for the FTSE 100 and helped lift the index higher. We also note the move back above the 20 period which supports the overall bullish trend. Although a dip in momentum did cause concern for the short term this was then quickly reverted and saw the FTSE head for 5900. Currently the index seems to be on route for the next key level of 6050 – 6117. As long as short term support 5748 is not violated, the week ahead should remain positive with minor pullbacks taking place along the way.Dow Jones in extension mode…As previously suggested the expectation of an increase in volatility certainly did create a strong move to the upside. With the Dow Jones now clearly above 11250 the index may be looking towards 11250 – 11705 over the next few weeks. Several indicators point to higher prices but as with other indices some pullbacks are expected. The current extension above 10719 points to an extended ABCD pattern which generally creates sizeable pullbacks. The 11215 level should be monitored for breaks to the downside. December Gold divergence concerns...The break above $1388 did lift Gold to higher prices as expected and currently the metal enjoys the continuation to the upside. If the bullish trend is to remain in place then there is the possibility of looking towards $1493-$1520 as the next price target. However even with the recent move higher we note that momentum has not made new highs. This divergence should be monitored in case the trend suddenly reverses. A break below $1350 may see Gold pullback towards $1246 which could be healthy for the longer term trend. Weekly charts show no sign of major weakness just yet.You can find out more about spread betting at cityindex.co.uk. Alternatively, take a look at City Index’s one point spreads on major indices such as the FTSE and Wall Street at http://www.cityindex.co.uk/1point-spreads/. 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.
Greater London, England -- (SBWIRE) -- 11/12/2010 -- Giles Watts of CFD trading provider City Index (http://www.cityindex.co.uk) commented:
Indices continue higher pushing past hurdles along the way. It now seems that major price levels could be well within sight if we can see positive momentum sustain at current price levels. There is still concern that sharp dips could take place if any signs of weakness appear along the way. Gold prices followed in line with indices reaching new heights but also with caution. Some traders feel that markets are currently overextended and surprises may be to the downside if we see a sharp turnaround in momentum along with breaks of support. But at present the trend remains bullish.
FTSE 100 on target for 6000 …
The important 5660 level held firmly for the FTSE 100 and helped lift the index higher. We also note the move back above the 20 period which supports the overall bullish trend. Although a dip in momentum did cause concern for the short term this was then quickly reverted and saw the FTSE head for 5900. Currently the index seems to be on route for the next key level of 6050 – 6117. As long as short term support 5748 is not violated, the week ahead should remain positive with minor pullbacks taking place along the way.
Dow Jones in extension mode…
As previously suggested the expectation of an increase in volatility certainly did create a strong move to the upside. With the Dow Jones now clearly above 11250 the index may be looking towards 11250 – 11705 over the next few weeks. Several indicators point to higher prices but as with other indices some pullbacks are expected. The current extension above 10719 points to an extended ABCD pattern which generally creates sizeable pullbacks. The 11215 level should be monitored for breaks to the downside.
December Gold divergence concerns...
The break above $1388 did lift Gold to higher prices as expected and currently the metal enjoys the continuation to the upside. If the bullish trend is to remain in place then there is the possibility of looking towards $1493-$1520 as the next price target. However even with the recent move higher we note that momentum has not made new highs. This divergence should be monitored in case the trend suddenly reverses. A break below $1350 may see Gold pullback towards $1246 which could be healthy for the longer term trend. Weekly charts show no sign of major weakness just yet.
You can find out more about CFD trading at http://www.cityindex.co.uk.
Alternatively, take a look at City Index’s one point spreads on major indices such as the FTSE and Wall Street at http://www.cityindex.co.uk/1point-spreads/.
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.