TipTV Finance Show Review: 2nd March
It is very often the case that on those difficult to call financial markets turning points, you really do need to be in the expert hands of an experienced technical analyst. Cue the director of FuturesTechs, Clive Lambert, casting his eye over the key markets. What was interesting here is that for instance, with his view of the FTSE 100, it is an index which has not actually broken the 2015 downtrend, especially when one takes into consideration the configuration of the front month futures contract, rather than the cash market. Here we see how the line in the sand as far as a breakout would be concerned is at 6,216, and not for instance at the broken initial February peak on the daily chart of the UK index at 6,115 on cash.
Lambert was also comparing and contrasting the relative performances of WTI Crude Oil and that of Brent. The message here was that, at least for the time being one would probably be looking at the former as being the more robust market technically. Given the way that the FTSE 100 has been highly correlated to the performance of oil since bottoming out near 5,500, one might be tempted to regard the balance of probability as being narrowly on the bullish side for leading UK stocks, even after all the gains we have been treated to over the past couple of weeks.
BGC Partners Strategist Mike Ingram was happy to keep looking at the fundamentals in order to work out where the markets may be heading next. The QE / punchbowl / central bank moves according to him now appear to be very tired. The only real positive was the likelihood that the equity markets would remain on an even kilter at least in the immediate aftermath of the G20 summit in Shanghai last week, and of course the China move to reduce the reserve rate requirement for its banks.
Nevertheless, there was some genuinely positive news overnight, with the revelation that the Australian economy is growing at its fastest pace for two years. Closer to home and one had to feel somewhat for terrestrial broadcaster ITV (ITV) which appeared to be suffering from something of hangover from the end of its highly acclaimed series Downton Abbey.
There was also a sense of irony which was not missed in troubled group Deutsche Bank taking a look at the fundamental position of equally troubled Glencore (GLEN). Ingram pointed out that most brokers backed the shares all the way down, and then have down so all the way up. The new target from Deutsche Bank is 138p versus 125p, with an unchanged buy rating. It apparently remains a buyers market for such markets. Nevertheless, at current levels one could need to see Glencore pull a rabbit out of a hat, especially as the stock approaches major technical resistance at 140p. There was also a ratings issue at online estate agent Rightmove (RMV), where after all the recent gains, and with a very conservative view, the stock is trading at 30 times earnings at the top of its recent trading range.