Economic Data

Will Debenhams be lost from the High Street?




Will Debenhams be lost from the High Street?

The Credit Rating Agency Moody’s recently changed Debenhams outlook to negative from what had been stable, this is because it believes creditors could have risks lending to the store which is currently the latest in a list of struggling department store chains.

Debenhams sales continue to decline in the 18-week period to the beginning of January, with it’s like-for-like sales down 5.7%.

With the high street struggling to compete with online competition, a lot of high street department stores are struggling in a big way and taking a lot of the heavy cost in jobs.

Debenhams loss from the High Street, could be a massive hit, employing 27,000 people with 165 stores, it’s loss could leave an already decimated high street looking even more empty.

From the chart it looks like the short sellers have entered in a large majority, this stock price could take a beating, if Debenhams can be saved, it will have to take some good fortune not just from the high street, but from investors and the restructure of it’s large debt.

We’re taking in this opportunity to take a quick short position, we believe it could continue in a downward trend, at least reaching 2.000 price, and at that price, who knows what could happen.

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Is Deutsche Bank Too Big To Fail?




Is Deutsche Bank Too Big To Fail?

It’s not been a good time for Deutsche Bank lately, going in to 2019 Deutsche Bank could be a major risk to the market.

The bank is a major financial company in Germany and a very powerful one within Europe, what is so dangerous, is they’re holdings of derivatives.

A lot of people don’t understand derivatives, and this is what makes the trading and holdings of them so dangerous to the markets. It is estimated Deutsche Bank has in the region of €50 TRILLION (€50,000,000,000,000) this is about the size of the global economy.

Deutsche Bank shares have dropped a huge amount already; going in to 2018 the shares were trading at around $20 (as time of writing they are trading at $8). The shares haven’t traded above the 50-day moving average since way back in September.

Now do we think the German Government can bail out the bank; is Deutsche Bank too big to fail in the German mindset? Well the bank does have an advantage with a large deposit base compared to other banks being dependent on wholesale funding.

Though a warning; with having the world’s largest derivatives book, and the stock going lower, a potential risk of spooking other financial businesses looks greater, and the lower Deutsche bank share price goes, the greater probability the German government will be asked for an injection of capital.

We don’t think Deutsche Bank will be allowed to fail, it’s quite possible the German Government (with the use of German Taxpayers) won’t allow it to happen, though how much it will cost is any ones guess, however will be a painful one.

That won’t stop us from taking a Short position, we’re going to hold as more downside of the stock is most likely before it gets any better for them.

Deutsche Bank Too Big To Fail

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




When will the FTSE 100 be in a Bear Market?




When will the FTSE 100 be in a Bear Market?

Looking for when the FTSE 100 may enter a Bear Market. Despite the media saying a 20% drop is a signal for a Bear Market, the real number is 16%.

Taking a measurement of 16% from the previous high in the summer of 2018 and a 16% drop comes to around 6442.
If price drops below this mark, (red dash line) this could signal the Bears are in full control.

Taking a measurement (purple line)from how far the FTSE dropped in the last recession and price could move to around the 4800 mark.

FTSE 100 be in a Bear market

(Tradingview chart used)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Strong Pound or Dollar Weakness




Is it a Strong Pound or Dollar Weakness?

Still monitoring the current economic data, indices recently have been tumbling.

We’ve taken a trade in cable, taking in to account recent economic news relating to UK trade balance, this has shown a deficit of -£1.2 billion, which looks to have missed the market expectations.

Also noting however, is the news of the UK and EU negotiating diplomats who have come out and recently announced they’ve made progress in the Brexit talks, as both sides now seek to reach agreements in continuing in talks. This news will have given the Pound a boost while having a downside effect on the FTSE 100.

The Dollar on the other hand has weakened, recent data regarding NFIB Small Business Index which is a survey of small businesses showed the score as 107.9 which is less than previous months and missed market expectations of 108.9.

We unfortunately didn’t get the GBPUSD trade in the market as early as hoped, we’d have wanted as close to the 13000 as possible, we believe the strong Pound or Dollar weakness could continue some more up until the area below the 13400 price, an area that could still look to be containing many more sellers.

strong pound

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Still Holding for the Sale of Gold




Still holding for the sale of gold.

With the stronger US Dollar and rising US Treasury yields these both put pressure on gold prices, we still believe Gold could still be heading down for the price to touch the 1150 mark.

1150 still looks to be a strong area of Buyers to get in on the sale of gold and buy cheap and take price back up.

Even with a sale of gold, the commodity is still an investment, seen as a safe asset.

For the time being, price has been stuck at around the 1200 price area, and could still contain sellers waiting to drive price further down.

While we wait and keep hold of this trade, we’ll keep an eye on US Dollar and economic data as these could have a major influence on gold price.

sale of gold

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 

Stock Market Tumble Allows More Trade Opportunities




With a stock market tumble allows more trade opportunities.

What a few weeks it’s been, and may still not be over for a while, trade disputes have been stepping up a notch, the mention of around $200 Billion worth of tariffs voiced from Trump and the Beijing reaction from China has meant a stock market tumble recently.

Both Washington and Beijing have stuck to their positions, however we could be upbeat about this, so long as no further trade spat happens or deteriorate between the two.

Not forgetting Brexit, a word close to peoples lips both in the UK and Europe, but also in North America.

We took an opportunity to enter in to some more trades to take advantage of the stock market tumble, with the DAX  we’ve got in to a buy trade on what appears to be a bounce in price, this looks to come from an area of buyers waiting at around the 12000 level, this may last until a possible area of sellers at around 12500.

stock market tumble

(Our trading and image was done using an account with UK based broker IG)

In the FTSE we got in to another buy trade from the move up in price from buyers at around the 7200 to 7300 level, we feel this may go back to pre-economic worries of around and above the 7600 price.

We’ll wait to see what happens when Theresa May is set for talks with the EU on post-Brexit Irish border problems, this could lower the value of the pound, so could potentially help boost the FTSE price.

stock market tumble

(Our trading and image was done using an account with UK based broker IG)

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




Brexit and the British Pound Journey





June 2016 and that vote, see’s the British Pound fall off a cliff, well not a large cliff exactly , but it was a significant drop in the value of the Pound.

From the news, it all sounds like doom and gloom, companies who import from abroad or mainly from Euro nations and the US are seeing their import costs going up, which results in a squeeze in their purchasing power and potentially effecting other business costs.

From many in the public view, a lot of people see the value of the pound effecting their holidays, potentially the cost of a trip to Europe may now be dearer than compared to top the previous years, a big difference  being seen in the cost of all the important travel money for those holiday spends. The price rise of a glass of Sangria in Spain can leave a bitter taste in the mouth, then followed by a quick remark ‘The Pound doesn’t go as far as it used too’…

British Pound

But let’s look at the other side of the coin (or the Pound if you pardon the pun).

Firstly a lot of the companies listed on the FTSE 100 make a large proportion of their profits overseas, so when the Pound falls in value against other currencies the great profits when the sales are made in one currency and converted back, such as converting the US Dollar into British Pound, this means the companies list greater profits, which in turn boosts investor confidence and they invest in the particular company hence the share price goes up and up.

Well what’s that got to do with the average man or woman on the street I hear you ask, well be sides from perhaps buying or holding some of those share in the particular company you may also have pension contributions made to a fund which invests that pension contribution into one of the FTSE 100 companies, buy buying those shares, so the higher those shares go, the more those share are going to be worth meaning a greater profit potential when they’re sold.

Also when the company is making more money, in theory this should allow the company to invest more in a number of things such as the workforce pay and conditions or research and development, boosting productivity with better machinery and or computers; investing in its future.

Another thing to remember is a weakened pound also makes Britain a favourite for tourist visits from overseas as their currency has greater buying power, so more tourists give our tourism sector a boost; enabling more small industries such as gift shops, fish & chip shops, B&Bs and even Pubs and many, many more who support the tourism trade to make successful trade and to hiring more people, boosting their local economy with jobs and further investment. British

So there are many things to consider with the direction of the British Pound after the vote of last year, there are positives and negatives on both sides of the argument, it all depends on which side of the argument you’re on,  some people can argue this has all been terrible look at the value of the pound, it’s eroding our purchasing power and now it’s costing us more to go on holiday abroad or others may argue, this is great, business has picked and the drop in the pound has given our industry a much needed boost.

If you’re going to trade British Pound, well hold on because you may be in for perhaps a few bumps along the way while Brexit is sorted out.

*Please Note, Forex and other forms of trading carry a high level of risk to your capital as you could lose all of your investment. These products may not be suitable for every investor, therefore ensure you understand the risks and seek independent advice. Invest only what you can afford to lose. We are NOT financial advisers and we do NOT offer financial advice. 




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