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| Spread betting strategies: Gold and S&P 500 |
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| Written by Phil Seaton & Robert Stewart | |
| Friday, 06 August 2010 13:50 | |
Our last post of spread betting strategies focused on Gold and the S&P 500 and we’re going to continue with those two markets today.
The bull harami pattern has so far proven to be the short term bottom and we have now had 5 successive up days in the December Gold contract. Yesterday the market pierced the $1200 level intra day, reaching a high of $1205.5 but was unable to close above that psychological number and pulled back to $1195.9 on a close. We need to see a close above $1200 in this market soon otherwise we may see a pullback to the bottom of the bull harami pattern. The long term trend is still up for gold but a break above $1220 resistance will be required before entering longs. For now only spread betting strategies from the long side should be considered as the long term trend is up. I would not consider shorting this market yet for that reason and would need further downside confirmation to change that point of view. On to the S&P 500 September contract. The S&P 500 has so far not pierced the resistance levels seen on the 21st June, although it is very close to doing so. The Dow and FTSE have both already cleared that resistance level. At the time of writing this morning the September contract is at 1125 so it is very likely that we will get a test of resistance today. Since the resistance at 1129 is major (it has held since 18th May) a breakthrough may provide the impetus for a move higher towards 1170. Even if the S&P 500 does clear this level the long term trend is down, so I won’t be taking this breakout if it does come as it is counter to the long term trend Phil Seaton & Robert Stewart www.LSTrader.co.uk |
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| Last Updated on Thursday, 12 August 2010 10:59 |
Spread Betting Lessons - Cut out the emotion!
Oh, and also a lesson why the Stop Loss is your Friend !
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Spread betting at a glance
- Spread betting is a financial product that allows retail and professional investors access to the widest possible number and types of exchange traded instruments.
- The spread betting company that you trade through is the market maker, the trader does not actually take ownership of any underlying product. Hence, most jurisdictions do not charge stamp duty on any gains.
- The notion that you don't actually own the product ensures spread betting platforms are able to almost instantaneously execute orders on behalf of their client.
- Spread betting is a leverage product, your money is able to realise you impressive gains as your earnings come in multiples of the actual change in the underlying product that you are trading.
- This is of course where spread betting can also go spectacularly wrong. Losses can be huge, therefore we advise those that are spread betting, or are looking to go into spread betting, to enter each trade with a well thought out strategy. This also means setting a pre-determined stop loss so that losses are cut at a manageable level.
- This website is here to offer more insight into this fascinating trading instrument.