Double Dip

Despite the very real presence of the recession in the UK, the last two or three months have seen remarkablegrowth in the stock market, not quite returning to pre-crash levels but getting up into that sort of area.

Some would suggest that now is a good time to become involved in spread betting and CFD trading. The market isgrowing, with the nation still in recession the market is almost certain to receive another boost when the figurestell us we’re officially out of ‘negative growth.’ Of course, others would say that now is a good time to tradebecause the market has artificially inflated itself and is going to experience an abrupt correction, thus leadingto a sharp fall during which money can be made.

CFD trading companies like CMC Markets* are keen to make sure that their traders are aware of the risks of CFDtrading and spread betting. If you get it wrong you can lose your original stake many times over and sustainenormous losses. They offer a raft of training information and market information so that you can read the signs ofthings going wrong.

So, what markers should you look for as proof of where the market is moving? Quarterly results from the banksare a good place to start; their results will be better than before but are unlikely to be so good as to trigger amassive rise in stock prices. In the slightly longer term are sales reports in the run up to Christmas. If a crashis to come it will be over the winter break when a wealth of retail reports will give evidence of the general feelof the consumer. Also look out for Bank of England announcements on the interest rates, and the actions of theChinese and American manufacturing sectors for their impact on commodities.

Finally, keep an eye on healthcare reforms in the United States. If they go through there will almost certainlybe an impact on the big pharmaceutical companies which will have a knock on effect on share indexes as these aresome of the biggest companies out there.

Unfortunately, even the professionals don’t really know what is going to happen, most people are sure that themarkets will soon move sharply, but they’re divided over direction. Now is a good time to get into trading becauseyou can learn about the markets and how to trade before sharper adjustments come.

*Visit the CMC Markets website for full details of their CFD trading options