Double Dip

Despite the very real presence of the recession in the UK, the last two or three months have seen remarkable growth 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 is growing, with the nation still in recession the market is almost certain to receive another boost when the figures tell us we’re officially out of ‘negative growth.’ Of course, others would say that now is a good time to trade because the market has artificially inflated itself and is going to experience an abrupt correction, thus leading to 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 CFD trading and spread betting. If you get it wrong you can lose your original stake many times over and sustain enormous losses. They offer a raft of training information and market information so that you can read the signs of things going wrong.

So, what markers should you look for as proof of where the market is moving? Quarterly results from the banks are a good place to start; their results will be better than before but are unlikely to be so good as to trigger a massive rise in stock prices. In the slightly longer term are sales reports in the run up to Christmas. If a crash is to come it will be over the winter break when a wealth of retail reports will give evidence of the general feel of the consumer. Also look out for Bank of England announcements on the interest rates, and the actions of the Chinese 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 certainly be an impact on the big pharmaceutical companies which will have a knock on effect on share indexes as these are some of the biggest companies out there.

Unfortunately, even the professionals don’t really know what is going to happen, most people are sure that the markets will soon move sharply, but they’re divided over direction. Now is a good time to get into trading because you 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