TRADERS on Wall Street will have one eye on the forthcoming Thanksgiving holiday
weekend because we’ve already seen a degree of risk mitigation in recent days. However with so much uncertainty right now it seems unlikely that the buyers will come back with any real conviction. No one wants to get caught on the wrong side of a sell-off, especially with New York as good as closed from Wednesday night. The short session on Friday may offer some opportunity but with European sovereign debt and China both remaining high on the news agenda for the time being, the risk that another bout of volatility could materialise cannot be overlooked. The current IG Markets price on the Wall Street Cash (the Dow) is 11,235-11,236.
Mining stocks have seen substantial gains this year. Despite concern that China will rein in its lending its uptrend remains intact. Capital CFDs quotes a price of 2,343.8p-2,346.7p for BHP Billiton.
After popping up to the 20-day moving average at 5,770 on Monday morning, the FTSE 100 dived over 70 points because the initial positive reaction to the Irish bailout began to wane. This also took it back below a six-month trend support line and below the 30-day moving average. The 50-day moving average lent some support around 5,694 but this may well give way and we could see 5,600–5,550 come into play this week. Spread Co offers a spread on the FTSE 100 index of 5,695.4–5,697.4.
Foodservices giant Compass Group updates the market this week. A decent update could well see its shares break out of a wedge pattern it has been in for the best part of 2010. There appears to be strong support in the 530p–520p region so the path of least resistance looks to the upside. A break out of the 545p area could well see it target the summer highs around 570p. Spread Co offers a spread on Compass Group of 538.6p–539.9p.