CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

FTSE Farewell to December Seasonals

Article By: ,  Financial Analyst
December 11, 2013 4:55 PM

The FTSE is on track to posting its first declining December since 2002 if it ends the month below 6,650. No other global equity index has rallied in over the last 10 Decembers.

The percentage of FTSE-100 shares trading above their 200-DMA falls to 58%, the lowest level since October. When using the weekly chart (focusing only on Friday closes), the level becomes the lowest since November 2012.

The steady declining participation of individual FTSE-100 shares suggest an internal exhaustion, which may render individual shares more attractive for the buy-&-hold investing crowd.

The breadth indicator (200-DMA participation) sheds light on any unfolding divergence between the price of the index and the number of individual components. In today’s case, the participation rate is steadily declining alongside the index.

With average Price/Book and Price/Earnings ratios at 1.9 and 16.0, it stands a little cheaper than the S&P500 at 2.6 P/B and 16.8 P/E respectively, but fairly similar to the Dax-30 at 1.7 and 15.4.

-5% Increments

Since its highs in late October, the FTSE-100 has fallen 5%, which is similar in magnitude of the decline from the mid-September highs to the mid-October low. Interestingly, the decline from the August 1st high to the August 22nd bottom was 4.5%. The index hasn’t had a decline of more than 10% since June.

First Negative December since 2002?

The FTSE is on track to posting its first declining December since 2002 if it ends the month below 6,650. The index has been partly pressured by the Bank of England’s gradual departure of aggressively dovish statements in recognition of the persistent improvement in fundamentals. Over the past 4 weeks, the top performing industries have been technology (+6%), followed by telecoms (3%) and healthcare (-0.7%). The worst performers are basic materials (-7%), utilities (-6%) and consumer services (-4%).

Charting the technical of the FTSE-100, the index faces interim support at 6,415, coinciding with the 55-week moving average. The average has held since July. Weekly sentiment indicators (stochastics) suggest that any deterioration would be limited to December, before a gradual recovery ensues next month to recapture current levels.

 

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024