Greg Secker – Global Market Update

By the end of last week, the FTSE 1000 breached the 6000 barrier several times, but by Friday’s crucial close failed to finish on top.
 

Last week’s occasional highs are being received as a movement after a summer lull for markets across the globe.
 

However, analysts will not be happy until the sometime records become a more routine occurrence, with the all-important 6000-point close still to be achieved.
 

“The FTSE failed to break 6000 last week, with much of the market undervalued a break through 6000 would be key indication of a bullish upside,” said Traders University founder Greg Secker.
 

“Since the fall initiated on May 11th, we have seen now three tests at the close to the 6000 level, first on July 31st, second on September 5^th and the more recent test at 6000 on Friday (September 29th).
 

“A break and close through 6000 would anticipate at least 100 point upside before we test further upside resistance,” he added.
 

The Dow Jones industrial average also broke its all-time high last week
 

Calm in the Middle East leading to the decline in gold and oil prices is being cited as a major factor in share price rises, as is suspicion that US interest rates have peaked.
 

Mr Secker passed on his tips for those watching the FTSE’s movements: “Sectors we are looking at on livetradingfloor.com to benefit from this move over the next few weeks are: non-life insurance; gas, water and multi-utilities and electricity as we recognise a more defensive stance to the sectors.”

Third quarter
A retrospective look at the 2006 third quarter today has seen widespread optimism for global holdings since the summer’s earlier dip.
There is speculation that the third quarter stock bounce-back will put global offerings on track for a record by the end of the year.
Global stock indexes are also showing six-year highs following a May/June dip, which saw many companies postpone their offerings.
The US Standard & Poor 500 Index has seen a 9.2 per cent advance since its year low of June 13 – hailed as the best September figure since 1998.
The Nasdaq’s Composite Index showed a 3.98 per cent rise in the third quarter, largely mobilised since mid-July.

Dow Jones
Despite the industrial average championing its intraday trading closing high several times last week, the blue-chip index finished at 11,679.07 on Friday – lower than it’s record closing high of 11,722.98.
The reaction has been to steady speculation of a fresh climb, with analysts now waiting on further proof of sustained high levels.

Oil
It is oil prices that are really expected to set the agenda this week for US trading, particularly during the first-half, which will be lean on company releases.
The data scarcity is partly due to the Jewish celebration of Yom Kippur today – the most sombre day of Judaism’s calendar.
Oil prices continue to fall from July’s high of $78.40 a barrel and closed below $63 on Friday. However, analysts are upbeat about a possible rise.

Gambling
Online gaming stocks are set to dive today, following new US legislation to prevent banks and lenders from processing payments to online casinos – the Unlawful Internet Gambling Enforcement Act. 

“Nasdaq is likely to be sold short amidst the disastrous news hitting the online gaming stocks, 888.com, partygaming and empire poker all have losses of over 50 per cent this morning,” commented Greg Secker.
 

October
Known as the “jinx month”, caution may be seen across the board, despite the third-quarter buoyancy

 This week sees the end of a six-month moratorium which has prevented New York-based stock exchange Nasdaq from bidding for the London Stock Exchange (LSE), in which it has a 25.3 per cent stake.
The Takeover Panel ban follows the LSE’s rebuff of its March takeover bid of 950p-a-share.
However, the US exchange is widely rumoured to have ruled out making a bid because the £12.43 per share minimum bid is too steep for the heavily-indebted Nasdaq.
“Nasdaq cannot afford the LSE at the moment,” one of its advisers told the Financial Mail.
It is thought that the company is hoping to sit tight and wait for shareholders to pressure the LSE into accepting a lower bid.
Many analysts believe an LSE takeover is inevitable. The most likely alternative to Nasdaq – and the rumoured preference of LSE chef executive Clara Furse – is a merger with a Far East Exchange.
“Our outlook is very international,” said a spokesman.
The market suggests investors may be holding tight for a dip in the absence of a bid or a deal, indicated by 12 per cent of LSE shares being the subject of stock borrowing.