Financial Betting Articles

The US and UK markets are donning their climbing gear and preparing to go high. New record levels are being achieved with alarming frequency. The question every mountaineer must ask about an unconquered peak is "Will it go?"

Acquisition and merger frenzies have sent the markets up, fueled by private equity and stoked by market speculation. There are rumblings that a Chinese bubble is forming. Signs are that speculation spending is crowding out investment here and the UK Total Business Investment figures on Thursday will give a clue.

If it's a speculation game, then the skill will be guessing when the bubble will burst. To do this you have to gauge the markets psychology. The sentiments of an excited market are often found in the charts.

The FTSE is developing an interesting pattern over the last few weeks. From a base camp of 6416.40 on 12 April, it scaled almost 100 ticks in a three day rise. Here it paused for a fortnight, acclimatizing to the altitude in the 6400-6500 band. The index trended downward with the peaks and troughs getting closer, steeling itself for the next ascent starting 2 May. In under three days it climbed almost 200 ticks, reaching a high on 4 May at 6614.70. It's been meandering down in the 6500-6600 range for almost 2 weeks, shooting up on Friday. Will the pattern be repeated or is the FTSE gasping to breath at this altitude?

Wall Street too is pausing to admire the view after rocketing up the rock face. Having spent two years meandering up the foothills from 10,000 to 11,000, the burly Yank overcame his mountain lassitude, scrambling up the next 2000 ticks in a dizzying 11 months. Indeed, the last 3 months have seen the steepest climb. After such exertion, it wouldn't take much to stumble down a crevasse and fall a long long way.

Are these foolhardy rock-hoppers heading for an almighty tumble? Put your pound where you make the sound at ChoiceOdds.com

The FTSE has shown steady upward progress with few reversals since its 10 year low of 3277.5 in March 2003. The average annual growth over the last 4 years to last March has been 18.0%, but the last year's was only 4.7%.

From 16 April, the FTSE went +53.8, -75.6, +46.2, -57.3, +39.9, -50.7, +30.5, -29.6. The sequence of progressively smaller ups and downs was broken by +184.1, taking the FTSE to a new high on 4 May.

66% of trading days on the Wall Street this year have finished higher, with 16% of these being greater than +100 ticks.

I have met Peter Crouch. He is 16.75 sherbet fountains tall (about 2.01m). I haven't met Mongolian herdsman Bao Xishun, but they say he is almost 3 sherbet fountains taller (about 2.36m).

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