18 Dec 2015

The markets have had little on their mind recently bar that ‘momentous’ decision to raise US interest rates for the first time since the financial crisis. Following that, attention has come back to emerging markets and their old buddies, commodities. Of course, market volatility is always good for bringing us opportunities – and all the more so when you can use CFDs to speculate on falling prices! And yes, shares in mining and oil companies are at their lowest for years. Everyone thinks that commodities will recover one day, it’s only a question of time. The world is still growing, right?

To know when to get into the market is the first task and one you will do well to learn ahead of time. Consider some possible consequences of this week’s Fed rate hike: US Dollar strength – will it get stronger, hurting commodities further? Or will it get weaker (a boon for commodities) as investors digest a slow and unsteady series of further hikes – seeing such language as an indication the Fed acted only to maintain its credibility? All this will become clear in the very near future and we can let you know as soon as it does. January perhaps?

So the volatility continues. The UK 100 has traded a fairly reliable range between 5900-6500 since October and still remains around 1000 points from the April highs. With many stocks trading 2015, if not multi-year lows, are we going to get a repeat of last year with an end of December surge onward into the New Year to make and break record highs? With the US finally initiating lift-off on interest rates, has the uncertainty started to ease? If so, is now the time to Buy?

George Walker, Trader