Punters looking for rally in Dow, and rebound in gold

Many spread betting traders have been caught on the wrong side of recent sharp moves such as last night’s plunge in the Dow and the run-up in Nymex oil to the $57 area.

Some have read the markets right however – one bookmaker reported a couple of very large sellers of the Dow yesterday at 7.15pm immediately after the rise in US interest rates. The index fell 140 points in less than two hours.

Wednesday morning found the majority of punters going short of the FTSE, apparently on the view that the UK index had not reacted sufficiently to the US sell-off.

IG Index said that many of its clients had opened long on the Dow today, looking for a rally from the 10,470 close last night.

On oil, traders are deeply split. IG said that most of its punters are long, eyeing a further rise in the Nymex contract to $60, but Capital Spreads said its clients were generally short – sticking to positions opened before the latest rise.

Both bookies said that customers tend to be long of gold and silver, especially since the recent setback in precious metals has opened things up for a buy-on-the-dips approach.

On currencies, IG said that many punters were long of the dollar against the pound on a contrarian view, but Capital reported client short positions in the dollar against sterling, the euro and the yen.

Among individual stocks, Capital said bulls were in the majority on banks and supermarkets,while bears were in the ascendancy on insurers.

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