There are quite a few FTSE350 companies lining up to pay special dividends alongside their usual dividend payment over the next few weeks. Starting with ITV and Admiral who go ex-dividend tomorrow.
ITV - current price around 125p, 1.8p dividend, special dividend 4.0p - total 5.8p per share.
Admiral - current price around 1293p, dividend 21.4p, special dividend 24.1p - total 45.5p per share.
Fidessa - current price around 1793p, dividend 24.5p, special dividend 45.0p - total 69.5p per share.
Antofagasta - current price around 891p, dividend 8.4p, special dividend 52.0p - total 60.4 per share.
888 Holdings - current share price around 169.5p, dividend 3.02, special dividend 1.34p - total 4.36 per share.
You can work out the % yourself, but only 888 at around 2.5% are paying something close to the very low IR's currently available on savings with your local friendly bank.
Tuesday 30 April 2013
Government completes first Help to Buy deal, Taylor Wimpey benefits
So, after the Government announcement in the last budget of their intention to prop up house prices with the Help to Buy scheme, the first beneficiaries are moving into their taxpayer backed home.
Persimmon reported, as mentioned here, that they were seeing an increase in interest after the budget and now Taylor Wimpey join them. As suggested here, the UK housing market is too big to be allowed to fail, and it would seem the latest scheme could well be quite popular, especially with the housebuilders.
The first property deal under the Government’s Help to Buy has just been finalised on a Taylor Wimpey home in Liverpool.
A young couple relocating to the North West from Northern Ireland have bought the three bedroom home at Taylor Wimpey’s Speakman Gardens development in Prescot.
The housebuilder said it has seen a rise in visitor levels and new home reservations this year, as a result of improvements in consumer confidence.Taylor Wimpey go on to say;
Peter Redfern, chief executive of Taylor Wimpey, commented: “The new Help to Buy housing measures have been welcome news for home hunters.
“We have seen significant increases in customer interest following its announcement and the scheme has already proven popular for those looking to get onto or move up the housing ladder.
“In fact, since its launch on 1 April, we have helped customers purchase, reserve or register their interest in an additional 300 homes.
“The measures announced by the Chancellor will help home builders get Britain building and add a welcome vibrancy to both the new and second hand market over the next three years.http://bdaily.co.uk/industrials/30-04-2013/first-help-to-buy-deal-completes-in-liverpool/
Persimmon reported, as mentioned here, that they were seeing an increase in interest after the budget and now Taylor Wimpey join them. As suggested here, the UK housing market is too big to be allowed to fail, and it would seem the latest scheme could well be quite popular, especially with the housebuilders.
Monday 29 April 2013
The Week Ahead 3 - 29th April to 3rd May 2013
The week ahead.
Data:
30th April
UK Mortgage Approvals
UK Consumer Confidence
UK M4 Money Supply
US Consumer Confidence
EU CPI
1st May
UK Manufacturing
2nd May
UK Construction
US Balance of Trade
US Initial Jobless Claims
EU ECB Interest Rate
EU Manufacturing
3rd May
US Non-Farm Payrolls
US Unemployment Rate
Company Announcements
Wednesday 24 April 2013
Brown N Group pleases the market, trend still looks bullish.
Brown N reported today figures that so far pleases the market. The company was first mentioned here in this post around June time last year, as talk at the time was of a potential takeover target for ASDA. Nothing came of that and the company is far more expensive today for any potential bidder than it was back then. It is up today around 4-5% so far on the back of its statement, so there is a lot of good news already in the price. The weekly chart clearly has momentum though and looks like it wants to go higher.
The arrow on the weekly chart below shows when it was first mentioned here, the breakout to the upside was just about to start. I think what the chart also shows is how once you get away from the noise of the shorter time frames on charts, the longer time frame periods look far smoother and like an ocean liner once under way any reverse takes a while to happen. The same tends to be true of these longer term trend moves. I would not want to bet against the company going higher from here until something changes on this longer time frame to justify it.
Chart:
The arrow on the weekly chart below shows when it was first mentioned here, the breakout to the upside was just about to start. I think what the chart also shows is how once you get away from the noise of the shorter time frames on charts, the longer time frame periods look far smoother and like an ocean liner once under way any reverse takes a while to happen. The same tends to be true of these longer term trend moves. I would not want to bet against the company going higher from here until something changes on this longer time frame to justify it.
Chart:
Tuesday 23 April 2013
Video market round up for the week ending 19th April 2013
A week ending round up of the markets from Steve Briggs YouTube channel. This week includes a look at the UK Pharmaceuticals sector, AstraZeneca and Glaxo.
Links:
Links:
Steve's YouTube site http://www.youtube.com/user/sjb5555.
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Monday 22 April 2013
The Week Ahead 2 - 22nd to 26th April 2013
The week ahead.
Data:
22nd April
EU Consumer Confidence Indicator
23rd April
US House Price Index
US New Homes Sales
25th April
UK GDP (Preliminary)
US Bloomberg Consumer Confidence
US Continuing Claims
US Initial Jobless Claims
26th April
US GDP (Advance)
EU M3 Money Supply
US Personal Consumption Expenditures, Income, Spending
US U. of Michigan Confidence
Company Announcements
24th April
Finals - Home Retail Group. Been going well recently but the fundamentals are looking quite generous for a retailer. Will be interesting to see what effect if any the March/April winter weather has had on business. Note - my mistake this result is due next week.
Finals - Brown N Group. I first mentioned Brown in this post, Retailers Under The Cosh as one to watch in the FTSE250, potential takeover target and probably undervalued. Back then it was around 242p, today 420p as of Friday's close. Be interesting to see if it can maintain this momentum once it announces its finals. Didn't give anything away back in March as to what to expect.
25th April
Interim Management statement - Playtech. Has done well lately out of doing business with William Hill and has also recently agreed a deal with Ladbrokes.
Markets and charts
Data:
22nd April
EU Consumer Confidence Indicator
23rd April
US House Price Index
US New Homes Sales
25th April
UK GDP (Preliminary)
US Bloomberg Consumer Confidence
US Continuing Claims
US Initial Jobless Claims
26th April
US GDP (Advance)
EU M3 Money Supply
US Personal Consumption Expenditures, Income, Spending
US U. of Michigan Confidence
Company Announcements
24th April
Finals - Home Retail Group. Been going well recently but the fundamentals are looking quite generous for a retailer. Will be interesting to see what effect if any the March/April winter weather has had on business. Note - my mistake this result is due next week.
Finals - Brown N Group. I first mentioned Brown in this post, Retailers Under The Cosh as one to watch in the FTSE250, potential takeover target and probably undervalued. Back then it was around 242p, today 420p as of Friday's close. Be interesting to see if it can maintain this momentum once it announces its finals. Didn't give anything away back in March as to what to expect.
25th April
Interim Management statement - Playtech. Has done well lately out of doing business with William Hill and has also recently agreed a deal with Ladbrokes.
Markets and charts
Friday 19 April 2013
William Hill delivers the knockout punch?
There couldn't be a bigger contrast in market sentiment in action than comparing today's response to William Hill's results with Ladbrokes downbeat report delivered on Monday. As of writing the company is up around 5% on the back of its statement, so has William Hill delivered a knockout blow to its rival?
In fact, reports suggest that William Hill are seeing moderating growth, yet the market still seems to like what it sees. However, when it comes to presentation it would appear that William Hill knows better than Ladbrokes how to hide any bad news in its statement as can be seen by what it reported about its Cheltenham results.
Note how the bad Cheltenham results are glossed over by mentioning the Grand National success and the continued growth in digital players. Ladbrokes made no mention of any improvement in trading after Cheltenham, although surely they did well out of the National meeting as well? Ladbrokes statement left enough to doubt that going forward the company is still struggling, whereas William Hill are now seeing the benefits of its investment online, takeover of Sportingbet and relationship with Playtech. Judging by the two statements released this week, Ladbrokes could learn a lesson to be more upbeat about future prospects, unless of course it really is bad.
Going forward William Hill seems to be projected highly on growth company numbers compared to rival Ladbrokes, which increasingly looks like a value play. Of the two its the latter that has more potential upside, assuming of course that management has got it right on the recovery plan that they have.
Here's the numbers before today;
In fact, reports suggest that William Hill are seeing moderating growth, yet the market still seems to like what it sees. However, when it comes to presentation it would appear that William Hill knows better than Ladbrokes how to hide any bad news in its statement as can be seen by what it reported about its Cheltenham results.
Cheltenham results were not as good for us this year but just after the quarter end, Auroras Encore made the Grand National a major success for William Hill, even beating our record win achieved on the race in 2009 when Mon Mome romped home at 100-1. Both of these big meetings proved to be significant attractions for mobile bettors. Our app was downloaded 45,000 times on Grand National day and 51,000 times during the Cheltenham Festival, putting us at the top of the downloads league for both events.http://www.digitallook.com/news/rns/20838794-14283/WMH-Q1_Interim_Management_Statement_html?ac=,&username=,
Note how the bad Cheltenham results are glossed over by mentioning the Grand National success and the continued growth in digital players. Ladbrokes made no mention of any improvement in trading after Cheltenham, although surely they did well out of the National meeting as well? Ladbrokes statement left enough to doubt that going forward the company is still struggling, whereas William Hill are now seeing the benefits of its investment online, takeover of Sportingbet and relationship with Playtech. Judging by the two statements released this week, Ladbrokes could learn a lesson to be more upbeat about future prospects, unless of course it really is bad.
Going forward William Hill seems to be projected highly on growth company numbers compared to rival Ladbrokes, which increasingly looks like a value play. Of the two its the latter that has more potential upside, assuming of course that management has got it right on the recovery plan that they have.
Here's the numbers before today;
Thursday 18 April 2013
Persimmon reports, another house builder seeing the benefits of Government intervention
One of the themes developing here is that it will be interesting to follow going forward the continued effect of Government and Central Bank intervention on the UK housing market and the benefit of this to UK quoted companies. I state the bullish case here and here and while I personally believe that UK house prices are too high and should fall if only a traditional free market response was in play, the reality is very different. With this in mind, this intervention can be monitored in part by keeping an eye on what the construction companies themselves are reporting.
This is what FTSE250 Persimmon had to say today.
Whether we like it or not it would be foolish to overlook the likely impact of the intervention to come, there are few reasons to be bearish when it comes to housing stocks. One would have thought that only the badly managed ones will miss out.
This is what FTSE250 Persimmon had to say today.
We are encouraged by the announcements made in the Budget with respect to the Government's support both for customers wishing to enter the housing market and for those existing homeowners who aspire to move home. These "Help to Buy" measures include the provision of a Government backed 20% shared equity scheme commencing on 1 April 2013 to support customers who wish to buy a new build home. In addition, we look forward to working with the Government to develop the Government Mortgage Guarantee Scheme which is to be launched from 1 January 2014. We anticipate that this new Scheme will help mortgage lenders provide greater access to mortgage credit with smaller customer deposits at affordable interest rates.
As a result of these "Help to Buy" announcements customer enquiries registered on our Persimmon Homes and Charles Church web sites increased. Up until mid March enquiry levels had been running c.24% ahead of the prior year but following the announcement of the "Help to Buy" measures this improvement increased further to c.30%. We have experienced encouraging improvements in both visitor numbers and reservations at our developments over the last two weeks. Whilst it remains too early to measure any increase in legal completions as a result of the "Help to Buy" Scheme, we remain confident of the strength of underlying demand for new homes in the UK and that these measures will support an increase in the number of new homes delivered by the industry over the medium term.http://www.digitallook.com/news/rns/20835756-10277/PSN-Interim_Management_Statement_html?ac=,&username=,
Whether we like it or not it would be foolish to overlook the likely impact of the intervention to come, there are few reasons to be bearish when it comes to housing stocks. One would have thought that only the badly managed ones will miss out.
Telford Homes - impressive trading update
Because of the reasons given here it is difficult not to be bullish about UK house building stocks and if further proof were needed it came in a trading update from Telford Homes today. Reading through the high points it is difficult to believe that the UK housing market, at least in terms of sales, is going through a bit of a slump, but Telford is London biased. Many housebuilders seem to be reporting good business, something which can only be increased by further Government intervention.
The company reported.
The dividend yield on this one is pretty low and the P/E looks stretched, but you pay for quality like this. Momentum in the share price is also up so things look stretched here as well, but as can be seen on the weekly chart below, a new breakout appears under way.
The company reported.
Exceptional levels of demand with contracts exchanged for the sale of 803 open market properties in the year to 31 March 2013 (2012: 460)
Strong demand from overseas investors for London property; however over 60 per cent of the exchanges in the year were sold to UK buyers
Already 94 per cent pre-sold for the year to 31 March 2014 and over 50 per cent pre-sold for each of the two following years
Significant improvement in both gross and operating margins
Profit before tax for the year to 31 March 2013 will be ahead of market expectations
Net debt reduced significantly to under £35 million (2012: £54.6 million)The outlook presented today is about as positive as you could want it.
Outlook
The London property market remains encouraging and the Group's forward sales position, increasing margins, healthy development pipeline and enhanced financial strength are all reasons to look forward to the next few years.http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11554068
The Board is confident that substantial growth in profit levels can be achieved over the next three years from the existing pipeline and has a long term strategy to further this growth, in London, over the next five to ten years.
The dividend yield on this one is pretty low and the P/E looks stretched, but you pay for quality like this. Momentum in the share price is also up so things look stretched here as well, but as can be seen on the weekly chart below, a new breakout appears under way.
Wednesday 17 April 2013
Tesco reports, now the hard work begins.
Tesco reported this morning and while there was nothing overly dramatic in the results there was enough perhaps to raise some eyebrows going forward and see the shares sell off a little.
Bottom line is that profits are down 52% which is huge, especially for a company the size of Tesco. A year ago they were at £4 billion in pre tax profits, now it is under £2 billion. However, much of this seems to be due to one off costs.
The decision to finally pull out of the US has been confirmed at a cost of around £1.2 billion. The market knew that this write off would have to happen from pulling out.
Another £800 million has come from property write downs that they are no longer going to develop. Again, this should have been priced into market thinking as Tesco had stated that they were going to concentrate and invest in current stores in the UK.
However, the £1 billion investment in the UK side does not seem to have had a dramatic effect thus far on the bottom line. Trading profits in the UK fell 8.3% in the 52 weeks to February.
There are also difficult economic headwinds to contend with overseas in Europe and Korea.
One big plus today is the continued growth online, up 13% with £3 billion of sales which at the very least will be a reminder to Morrisons that they need to get a move on to get online as they fall further behind.
Another plus is that in these low savings rates times, Tesco has maintained its dividend at around 4%.
For Tesco the hard work now really begins as one would expect these one off write downs to have little further effect going forward. Once out of the US, Tesco needs to get it right in the UK and then hope that any down turn in Europe isn't too severe. Then there's Korea, small overall, but still a dent on profits, with the prospect of war with the North always it seems just over the horizon.
The market will now be concentrating on the pay off from that £1 billion investment in the UK. Going forward Tesco needs to show that it has got this right. If it has then Tesco remains a decent recovery play going forward, but there is still enough doubt, especially as the UK is a very mature market where it might be difficult for the company to get back the market share it has lost. It should be remembered that Tesco had 30% of this market a few years ago and is still the market leader by some way. Getting back to 30% in itself will be a difficult job and remains the reason why ultimately Tesco has to develop elsewhere which despite the US failure includes overseas.
Bottom line is that profits are down 52% which is huge, especially for a company the size of Tesco. A year ago they were at £4 billion in pre tax profits, now it is under £2 billion. However, much of this seems to be due to one off costs.
The decision to finally pull out of the US has been confirmed at a cost of around £1.2 billion. The market knew that this write off would have to happen from pulling out.
Another £800 million has come from property write downs that they are no longer going to develop. Again, this should have been priced into market thinking as Tesco had stated that they were going to concentrate and invest in current stores in the UK.
However, the £1 billion investment in the UK side does not seem to have had a dramatic effect thus far on the bottom line. Trading profits in the UK fell 8.3% in the 52 weeks to February.
There are also difficult economic headwinds to contend with overseas in Europe and Korea.
One big plus today is the continued growth online, up 13% with £3 billion of sales which at the very least will be a reminder to Morrisons that they need to get a move on to get online as they fall further behind.
Another plus is that in these low savings rates times, Tesco has maintained its dividend at around 4%.
For Tesco the hard work now really begins as one would expect these one off write downs to have little further effect going forward. Once out of the US, Tesco needs to get it right in the UK and then hope that any down turn in Europe isn't too severe. Then there's Korea, small overall, but still a dent on profits, with the prospect of war with the North always it seems just over the horizon.
The market will now be concentrating on the pay off from that £1 billion investment in the UK. Going forward Tesco needs to show that it has got this right. If it has then Tesco remains a decent recovery play going forward, but there is still enough doubt, especially as the UK is a very mature market where it might be difficult for the company to get back the market share it has lost. It should be remembered that Tesco had 30% of this market a few years ago and is still the market leader by some way. Getting back to 30% in itself will be a difficult job and remains the reason why ultimately Tesco has to develop elsewhere which despite the US failure includes overseas.
Tuesday 16 April 2013
Video market round up for the week ending 12th April 2013
A week ending round up of the markets from Steve Briggs YouTube channel. This week includes a look at the UK mining and banking sector.
Links:
Links:
Steve's YouTube site http://www.youtube.com/user/sjb5555.
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
UK house prices, the case of a too big to fail market.
I've seen a few housing bubbles and it took me a while to realise and see that conventional economic thinking when applied to house prices simply doesn't work, at least not in the UK. In part it isn't allowed to work because the UK housing market isn't a truly free market. It tends to be free when prices are going up, but as soon as price rises start to hit a blip then we get intervention, the strong vested interests of the housing industry start knocking on the door of Government asking what are they going to do about it.
Traditional free market theory tells us that Government should do nothing, markets should be allowed to correct, but the UK housing market has become a "too big to fail" market. Too big to fail because of the knock on effect of the fall out on both the financial and general economy that would come from any correction.
First, any significant fall in house prices would hit the already under pressure UK banks. These are the same banks that are largely responsible for the problem in the first place as they relaxed their lending criteria and lived the good life on the back of the mortgage credit boom pre-2008. Given their ongoing potential liabilities, falling house prices would only make things worse.
Second, UK property owners have increasingly seen their wealth as being in property. The growth of home ownership since the early 1980's has been seen as much as an investment as somewhere to live and call your own home. The UK obsession with property and rising or falling house prices has a political impact in that politicians know that these people are more likely to be older and vote. Any Government risks the wrath of the electorate and losing votes on the back of any fall in house prices.
Third, it should also be remembered that politicians themselves are usually personally invested in property, quite a few have their own property empires as the expenses scandal of a few years ago showed. It is not in their own interest to see falling prices.
So, Government and Central Banks tends to intervene because choosing not to has a free market consequence that is dangerous to the whole economy. If banks go under credit would dry up, businesses would go to the wall, spending would fall, recession, potential depression would be on the cards.
Traditional free market theory tells us that Government should do nothing, markets should be allowed to correct, but the UK housing market has become a "too big to fail" market. Too big to fail because of the knock on effect of the fall out on both the financial and general economy that would come from any correction.
First, any significant fall in house prices would hit the already under pressure UK banks. These are the same banks that are largely responsible for the problem in the first place as they relaxed their lending criteria and lived the good life on the back of the mortgage credit boom pre-2008. Given their ongoing potential liabilities, falling house prices would only make things worse.
Second, UK property owners have increasingly seen their wealth as being in property. The growth of home ownership since the early 1980's has been seen as much as an investment as somewhere to live and call your own home. The UK obsession with property and rising or falling house prices has a political impact in that politicians know that these people are more likely to be older and vote. Any Government risks the wrath of the electorate and losing votes on the back of any fall in house prices.
Third, it should also be remembered that politicians themselves are usually personally invested in property, quite a few have their own property empires as the expenses scandal of a few years ago showed. It is not in their own interest to see falling prices.
So, Government and Central Banks tends to intervene because choosing not to has a free market consequence that is dangerous to the whole economy. If banks go under credit would dry up, businesses would go to the wall, spending would fall, recession, potential depression would be on the cards.
Monday 15 April 2013
Gold and silver miners hammered
It was bad enough that China disappointed the market with lower growth numbers coming in, the mining sector in general has been in a slump for some while, today they were hit hard again, but some of the biggest hits were the gold and silver miners. Gold itself had one of the biggest daily falls in a long time prompting some to suggest that it is now in a bear market, time will tell on that one, but the gold miners are now heading for falls that some haven't seen since the dark days of 2008.
Today's % falls:
Petropavlovsk - 24.01%
Fresnillo - 15.16%
Hochschild Mining - 8.37%
Randgold Resources - 8.33%
3 month change:
Petropavlovsk - 61.56%
Hochschild Mining - 46.62%
Fresnillo - 38.84%
Randgold Resources - 22.84%
More speculative African gold mining smaller company Avocet Mining is down 74.33% in 3 months.
Given current sentiment around gold and silver appears to be more negative, it is difficult to say if any of these represent a bargain at current levels or not. Technically, the charts look awful and patience is probably needed to wait for some more positive signs that the falls are over. These can go up as quick as they can fall, but right now it is guesswork as to when that turnaround is coming.
Today's % falls:
Petropavlovsk - 24.01%
Fresnillo - 15.16%
Hochschild Mining - 8.37%
Randgold Resources - 8.33%
3 month change:
Petropavlovsk - 61.56%
Hochschild Mining - 46.62%
Fresnillo - 38.84%
Randgold Resources - 22.84%
More speculative African gold mining smaller company Avocet Mining is down 74.33% in 3 months.
Given current sentiment around gold and silver appears to be more negative, it is difficult to say if any of these represent a bargain at current levels or not. Technically, the charts look awful and patience is probably needed to wait for some more positive signs that the falls are over. These can go up as quick as they can fall, but right now it is guesswork as to when that turnaround is coming.
Ladbrokes, losing the race
Ladbrokes today updated the market on its first quarter performance. A red flag could be seen before anything was read as the announcement stated "Early release of 1st quarter results". Early release? Could spell trouble and it did.
So not good and the share price, down around 8% today reflects that. However, the middle paragraph above makes you wonder why Ladbrokes felt the need to get their announcement in early, especially as rival William Hill is due to report on Friday.
Ladbrokes had always planned for a reduction in group operating profit during the quarter due to known taxation and cost headwinds in UK Retail and the expected H2 weighting of growth in Digital revenues.http://www.digitallook.com/news/rns/20826495-10046/LAD-Early_Release_of_1st_Quarter_Results_html?ac=,&username=,
This reduction has however been exacerbated by softer trading than expected in Q1, particularly in the second part of the quarter, during which we saw a number of one off factors including; a significant reduction in profit from Cheltenham, lower revenues from high value gaming customers and a proportionately higher impact from horseracing cancellations.
When coupled with the revised 2013 outlook for our Digital business following our deal with Playtech we now expect group operating profit for the year to be at the bottom of the existing market range, in light of which the Q1 IMS has been released today.
So not good and the share price, down around 8% today reflects that. However, the middle paragraph above makes you wonder why Ladbrokes felt the need to get their announcement in early, especially as rival William Hill is due to report on Friday.
The Week Ahead 1 - 15th to 19th April 2013
Going to try something new which I will try to get out before the start of the market week in future and that is a week ahead feature. This will focus on what is happening in the week to come, covering announcements and company news. It will not be all inclusive or just a list of dates as that can be found elsewhere, but will spotlight a few situations with comments worth watching out for.
Data:
15th April
China GDP.
16th April
GB CPI/RPI
Euro Zone CPI/RPI
US CPI
Germany Zew Survey Economic Sentiment
17th April
GB BoE minutes
US Fed Beige Book
18th April
GB Retail Sales
US Initial jobless claims
Company Announcements
Data:
15th April
China GDP.
16th April
GB CPI/RPI
Euro Zone CPI/RPI
US CPI
Germany Zew Survey Economic Sentiment
17th April
GB BoE minutes
US Fed Beige Book
18th April
GB Retail Sales
US Initial jobless claims
Company Announcements
Friday 12 April 2013
FTSE100 Update - Where next?
The direction of the FTSE100 is more negative than positive, but it is still a guessing game as to how the latest moves will ultimately play out.
Daily chart
A downtrend with two lower highs and potentially a third in play right now. The arrows on the chart show the downward direction, but also the potential for upside if that downward trend tram line is broken.
MACD is negative. Two lower highs showing divergence on the chart in Feb and March. The headshake described in my update the other day looks like it may be happening again as MACD is currently near enough to the zero line to give bulls fresh hope of an upward move, but could easily reverse and go further into oversold territory. It's been some time since MACD did that so it is due.
20 DMA looks like it is just about to go through 50 DMA on the downside.
Support on the chart at between 6250 and 6300 needs to hold.
Weekly chart.
Still a lot to play for
MACD is going negative, but is still some way off the zero line. We still have higher highs on the MACD.
20 and 50 DMA still holding on this chart.
Trend tram lines and support lines below suggest that on this longer time frame chart we could have a decent sell off yet still be in a general uptrend.
Overall, things look more negative and it will be interesting to see if the FTSE holds and we get consolidation between 6250 and 6500 or bigger falls below 6250. Right now there is less reason to be bullish, although if this is a bigger bear market move then it is very early stages.
Charts below:
Daily chart
A downtrend with two lower highs and potentially a third in play right now. The arrows on the chart show the downward direction, but also the potential for upside if that downward trend tram line is broken.
MACD is negative. Two lower highs showing divergence on the chart in Feb and March. The headshake described in my update the other day looks like it may be happening again as MACD is currently near enough to the zero line to give bulls fresh hope of an upward move, but could easily reverse and go further into oversold territory. It's been some time since MACD did that so it is due.
20 DMA looks like it is just about to go through 50 DMA on the downside.
Support on the chart at between 6250 and 6300 needs to hold.
Weekly chart.
Still a lot to play for
MACD is going negative, but is still some way off the zero line. We still have higher highs on the MACD.
20 and 50 DMA still holding on this chart.
Trend tram lines and support lines below suggest that on this longer time frame chart we could have a decent sell off yet still be in a general uptrend.
Overall, things look more negative and it will be interesting to see if the FTSE holds and we get consolidation between 6250 and 6500 or bigger falls below 6250. Right now there is less reason to be bullish, although if this is a bigger bear market move then it is very early stages.
Charts below:
Wednesday 10 April 2013
Margaret Thatcher, the Big Bang and the hypocrisy of politics
Even in death it was probably inevitable that Margaret Thatcher would divide opinion in very black and white terms. Much has been written and said in the last few days about her, a lot of it by people that look at the world in very black and white, what's right and what's wrong ways, very much like Mrs Thatcher herself use to do. They talk with a certainty that they are right while everybody else of course, is wrong. It makes life very difficult for those of us who tend to see the world in shades of gray, although I might argue with the same level of certainty that the world is exactly like that.
So, let's explore some of those shades of gray that exist around Margaret Thatcher's legacy and we can start off with the Big Bang that freed up the city and banks back in the 1980's. It has been written that Thatcher somewhat detested the old boy city network way of doing things and that by freeing up the markets she would effectively destroy that old way of doing things. This she undoubtedly did, but perhaps she didn't see some of the long term consequences that she was unleashing.
For average investors/traders like ourselves, this change was in many ways a good thing, in time it opened up the market to Mr and Mrs Average to get involved. We can trade and buy shares today with a few clicks on our keyboards via the internet if we so wish in a process far more easy than what went on before Big Bang. To some degree, the stock market was "democratised" and opened up to us ordinary folk. This was helped on by the privatisation of many nationalised industries, usually at a discount. In the UK, "Sid" was born to patronisingly describe the eager new shareholders to the market, many of which simply wanted the quick profits that could be had in the first few days after IPO, easy money, greed is good, a mantra of the 80's and beyond was born.
However, this old wrong way of doing things was also extended to the banks, Big Bang helped see the birth of the investment side of banking. Many of the old fashioned big building societies like the Halifax, were happy to jump on board to become banks, allowing them to take advantage of the new financial freedoms. It was a time of light touch regulation that was taken to the extremes of almost no touch in the years of Blair and Brown. Much has been written about the banking crisis post 2008, but one thing that stands out is how the banks and financial industry exploited this light touch/no touch approach for their own ends, much of which they did in criminal ways.
So, let's explore some of those shades of gray that exist around Margaret Thatcher's legacy and we can start off with the Big Bang that freed up the city and banks back in the 1980's. It has been written that Thatcher somewhat detested the old boy city network way of doing things and that by freeing up the markets she would effectively destroy that old way of doing things. This she undoubtedly did, but perhaps she didn't see some of the long term consequences that she was unleashing.
For average investors/traders like ourselves, this change was in many ways a good thing, in time it opened up the market to Mr and Mrs Average to get involved. We can trade and buy shares today with a few clicks on our keyboards via the internet if we so wish in a process far more easy than what went on before Big Bang. To some degree, the stock market was "democratised" and opened up to us ordinary folk. This was helped on by the privatisation of many nationalised industries, usually at a discount. In the UK, "Sid" was born to patronisingly describe the eager new shareholders to the market, many of which simply wanted the quick profits that could be had in the first few days after IPO, easy money, greed is good, a mantra of the 80's and beyond was born.
However, this old wrong way of doing things was also extended to the banks, Big Bang helped see the birth of the investment side of banking. Many of the old fashioned big building societies like the Halifax, were happy to jump on board to become banks, allowing them to take advantage of the new financial freedoms. It was a time of light touch regulation that was taken to the extremes of almost no touch in the years of Blair and Brown. Much has been written about the banking crisis post 2008, but one thing that stands out is how the banks and financial industry exploited this light touch/no touch approach for their own ends, much of which they did in criminal ways.
Tuesday 9 April 2013
Video market round up for the week ending 5th April 2013
A week ending round up of the markets from Steve Briggs YouTube channel.
Links:
Links:
Steve's YouTube site http://www.youtube.com/user/sjb5555.
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Friday 5 April 2013
FTSE250 Update - can it hold 13000?
Well, that was quite a day! The FTSE250 closed down around 275 points, one of the biggest day falls for some time. Little was spared, although a few mining stocks which have been out of favour for quite a while (see here) did manage to stay in the blue.
The chart below is the weekly for the 250 and it is suggesting that the current trend is at the very least having a rest, there are negative signs although it could still stay in an upward direction provided it doesn't fall much below 13000. Moving averages are still positive and we have support points below, the major one being around 12200. MACD however does look like it is about to go down, but it is still some way off zero, the crossover of which is usually the bearish signal. Bears would be jumping the gun by going short now on the basis if this chart. It's important to remember that the FTSE250 can move a long way very quickly, although bulls should start being worried if we have one or two more days like today close together. A lot to play for next week I think.
The chart below is the weekly for the 250 and it is suggesting that the current trend is at the very least having a rest, there are negative signs although it could still stay in an upward direction provided it doesn't fall much below 13000. Moving averages are still positive and we have support points below, the major one being around 12200. MACD however does look like it is about to go down, but it is still some way off zero, the crossover of which is usually the bearish signal. Bears would be jumping the gun by going short now on the basis if this chart. It's important to remember that the FTSE250 can move a long way very quickly, although bulls should start being worried if we have one or two more days like today close together. A lot to play for next week I think.
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| FTSE250 -Weekly |
FTSE100 Update - Finally rolling over?
A couple of days ago I posted a chart showing the FTSE100, it looked like it was ready to go up again. Indicators suggested that we might be in for an early reversal of a minor downtrend that had been in place over the previous couple of weeks. Well, it looks like we got a classic example of indicator headshake, looks like it is going one way and then suddenly reverses, the previous trend still in place.
This is something that needs to be watched out for whenever indicators look like they are reversing from an existing trend. I call it the headshake, because a little like the dummy move that defenders (put in your favorite sport here) are often sold by attackers, you can go one way and then suddenly find your foe has gone in the opposite direction. Yes, you can look like a dummy and markets behave in the same way to.
A typical example of this is the headshake that often happens in the early stages of a Bollinger Band expansion. The Bollinger Band will often, especially after a period of consolidation, open wide, the direction can be up or down. You can see on the chart below how the band opens like a bubble in places, but quite often the initial move that price is making is not the direction that price eventually goes. In other words, you might think the bands are opening to the upside because price seems to be heading that way when in fact it is going to eventually reverse after the initial move and go in the opposite direction. This why it is often important to wait for confirmation. It means you will always miss the early part of a move, but it should keep you clear of the headshake.
As for the FTSE100, the MACD has reversed, moving averages are under pressure and the Parabolic Sar didn't hold. The chart now looks negative, with the Bollinger Band opening towards the downside, unless of course what we are seeing is another headshake. Perhaps the US numbers due out later today will confirm one way or another the direction? If they don't meet market expectations, the charts are telling us we should go lower.
Chart:
This is something that needs to be watched out for whenever indicators look like they are reversing from an existing trend. I call it the headshake, because a little like the dummy move that defenders (put in your favorite sport here) are often sold by attackers, you can go one way and then suddenly find your foe has gone in the opposite direction. Yes, you can look like a dummy and markets behave in the same way to.
A typical example of this is the headshake that often happens in the early stages of a Bollinger Band expansion. The Bollinger Band will often, especially after a period of consolidation, open wide, the direction can be up or down. You can see on the chart below how the band opens like a bubble in places, but quite often the initial move that price is making is not the direction that price eventually goes. In other words, you might think the bands are opening to the upside because price seems to be heading that way when in fact it is going to eventually reverse after the initial move and go in the opposite direction. This why it is often important to wait for confirmation. It means you will always miss the early part of a move, but it should keep you clear of the headshake.
As for the FTSE100, the MACD has reversed, moving averages are under pressure and the Parabolic Sar didn't hold. The chart now looks negative, with the Bollinger Band opening towards the downside, unless of course what we are seeing is another headshake. Perhaps the US numbers due out later today will confirm one way or another the direction? If they don't meet market expectations, the charts are telling us we should go lower.
Chart:
Thursday 4 April 2013
Turning Japanese? More like Japanese turning American?
Or at least trying to?
Some might be familiar with an old rock, pop song from the 1980's called Turning Japanese, a choice of words that increasingly has been used in economic circles to describe what may become of the Western economic experience if we are not careful. That experience is one of low growth, lower asset price valuations and little inflation bordering on deflation with dreaded doses of deleaveraging.
Essentially the Japanese experience since the heady days of asset bubbles being almost everywhere, 39000 on the Nikkei and property valuations that would have taken several lifetimes of mortgage repayments to justify them being just two, has been one of economic struggle. It's not as if Japan has been a total economic basket case, it's just that they have struggled to find that one thing so loved by Western financiers and Governments - inflation.
Don't let the politicians in the West kid you that inflation is a nasty thing that should be fought against at all cost, because for most of them it is what they actually want, or at least a little bit of inflation The last UK politician to promise a fight against inflation was Margaret Thatcher and the cost was several million unemployed, not that the millions out of work should all be put down to her economic policies, but in order to fight the price inflation that was running wild across the UK economy, drastic measures were undertaken. It is unlikely that politicians today would ever take such measures when "printing" money is so simple.
The one thing that has been missing from the economic fallout of the financial crisis of 2008 onwards has been the hyperinflation that many were so convinced was inevitable following the "money printing" of Central Banks as the answer to the crisis. It hasn't happened, probably because that money printing has been kept out of the grubby hands of the masses, there have been no helicopter drops for them (for those not familiar with this, do a search on Ben Bernanke, Helicopter), it has largely been parked in the vaults of the financial elite.
Some might be familiar with an old rock, pop song from the 1980's called Turning Japanese, a choice of words that increasingly has been used in economic circles to describe what may become of the Western economic experience if we are not careful. That experience is one of low growth, lower asset price valuations and little inflation bordering on deflation with dreaded doses of deleaveraging.
Essentially the Japanese experience since the heady days of asset bubbles being almost everywhere, 39000 on the Nikkei and property valuations that would have taken several lifetimes of mortgage repayments to justify them being just two, has been one of economic struggle. It's not as if Japan has been a total economic basket case, it's just that they have struggled to find that one thing so loved by Western financiers and Governments - inflation.
Don't let the politicians in the West kid you that inflation is a nasty thing that should be fought against at all cost, because for most of them it is what they actually want, or at least a little bit of inflation The last UK politician to promise a fight against inflation was Margaret Thatcher and the cost was several million unemployed, not that the millions out of work should all be put down to her economic policies, but in order to fight the price inflation that was running wild across the UK economy, drastic measures were undertaken. It is unlikely that politicians today would ever take such measures when "printing" money is so simple.
The one thing that has been missing from the economic fallout of the financial crisis of 2008 onwards has been the hyperinflation that many were so convinced was inevitable following the "money printing" of Central Banks as the answer to the crisis. It hasn't happened, probably because that money printing has been kept out of the grubby hands of the masses, there have been no helicopter drops for them (for those not familiar with this, do a search on Ben Bernanke, Helicopter), it has largely been parked in the vaults of the financial elite.
Wednesday 3 April 2013
UK mining sector, what is it telling us?
Although the market has been steadily rising for some time it is perhaps difficult to believe that there have been losers also, most notably in the mining sector. This sector has seen quite a sell off in the last month, but some have been falling pretty relentlessly for longer than that. Here's a list of some FTSE350 mining stocks and their percentage fall in the previous 3 months.
African Barrick Gold -59.84%
Kazakhmys -57.54%
Hochschild Mining -45.59%
Fresnillo -30.50%
Antofagasta -30.47%
The 3 month change in the index is -15.94% and it is down -15.42 over the previous 12 months.
So, some hefty falls there and you do wonder if the world economy is in recovery mode, why are so many miners, the providers of commodities that go into making everything falling so steeply? Some of these are gold and silver miners, a sector that can be very volatile even when the price of gold is steadily going up, but the falls seem to be across the board even when good individual company results are produced.
Bargain hunters may well want to keep an eye on the sector, but you may also want to watch for a recovery on the charts first as falls for the miners can be relentless. Get in at the wrong time and you can be looking at big losses. If anything this has been the sector to short, but could it also be a sign that the wider market may follow if economic growth forecasts don't live up to expectations as the year goes on?
African Barrick Gold -59.84%
Kazakhmys -57.54%
Hochschild Mining -45.59%
Fresnillo -30.50%
Antofagasta -30.47%
The 3 month change in the index is -15.94% and it is down -15.42 over the previous 12 months.
So, some hefty falls there and you do wonder if the world economy is in recovery mode, why are so many miners, the providers of commodities that go into making everything falling so steeply? Some of these are gold and silver miners, a sector that can be very volatile even when the price of gold is steadily going up, but the falls seem to be across the board even when good individual company results are produced.
Bargain hunters may well want to keep an eye on the sector, but you may also want to watch for a recovery on the charts first as falls for the miners can be relentless. Get in at the wrong time and you can be looking at big losses. If anything this has been the sector to short, but could it also be a sign that the wider market may follow if economic growth forecasts don't live up to expectations as the year goes on?
Tuesday 2 April 2013
FTSE100 Update - still looking positive
It must be getting boring, especially for market bears, that the charts are still looking pretty positive despite being very deep into an uptrend that seems to defy gravity. Not even North Korean talk of war threats (have they ever talked of anything other than war?) added to the Cyprus banking fiasco can shake the markets it would seem.
Price on the chart has been hovering between the 50 and 20 dma which seems to have flatlined, however, other indicators suggest that the next move may be up again. MACD is still above the zero line and after a period of decline is now heading up again. No green bars yet but the crossover is almost ready to go. This is supported by the Parabolic SAR indicator going positive with the first green dot on the chart under today's move up. That needs to hold, but if it does we should be going higher.
I do wonder if we might be heading for an ideal sell in May scenario this year?
Price on the chart has been hovering between the 50 and 20 dma which seems to have flatlined, however, other indicators suggest that the next move may be up again. MACD is still above the zero line and after a period of decline is now heading up again. No green bars yet but the crossover is almost ready to go. This is supported by the Parabolic SAR indicator going positive with the first green dot on the chart under today's move up. That needs to hold, but if it does we should be going higher.
I do wonder if we might be heading for an ideal sell in May scenario this year?
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| FTSE100 - Daily |
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