Quiet markets tend to rally

If we look at the performance in the major market indices over the past 3 weeks, we cannot help but be impressed.

The FTSE 100 has climbed 600 points or 12.5% and the Dow almost 1000 or 10% !

Even thought these gains are extremely impressive, they may well continue over the summer period as quiet equity markets tend to drift higher; maybe a generalisation but ProSpreads clients are on the same tack.

However beware; although the Greek crisis and the potential default of other PIIG nations seems a distant memory, the problem has not gone away, so the party may come to an end if or when another default occurs.

And the same goes for BP shares, which are obviously also well off their lows. The removal of their CEO Tony Hayward and realisation that BP is still a very good company are considered firm foundations for further recovery in the stock price, which will only aid the summer rally that is expected in the FTSE 100 index.

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About Simon Brown
Simon Brown has over 20 years experience trading Derivatives on everything from Gold, FTSE to Dollar/Pound. Simon has lectured in Trading Psychology, Strategy and Technical Analysis, in addition to regular appearances on CNBC television. He is now Managing Director of ProSpreads.

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