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Thoughts from the Frontline

Please note that this article is out-of-date - long gone are the golden days of Simon Denham. The new CEO of LCG is Charles Henri Sabet and we have a serious business dispute with London Capital Group

A trader who has attended one of Capital Spreads seminars shares his thoughts with us comrade-in-arms ;)

Seminar at the time conducted by Richard Morrish and Simon Denham of Capital Spreads. Richard a lawyer turned pit trader turned macro economist and hedge fund manager. After the seminar Simon bought a few of us a drink in the pub. The whole thing was a marketing exercise, nobody tried to sell us anything.

For 1.5 hours Richard spoke seamlessly on technical analysis using live charts (hurrah, at last). He agrees technically that as things stand this is still a correction but his doom and gloom scenario on the US and UK economies suggests to him a 1929 scenario. Greenspan has left things in bad shape (which is why he went rather than stay on, which he was offered to do), Berneke is an academic (GS an ex trader) who will not be able to sort out GS mess, nor will he be a strong enough decision maker. UK debt ridden, what will happen if discount interest rate window shuts on banks and they can't borrow money cheaply...they will charge us more or start calling in debts.

He was very doom and gloom - says we are being lied to, the truth much worse than we realize, UK/US could be going bust.

..have to say that I thought he was 'playing to the audience' a bit but keep in mind he's paid to give macro economic advice to hedge funds.

Said no reason DOW has continued up for last year. Reason it's being doing so is that it has been propped up and now the money to prop it up has run out. Nasdaq too big to prop up...only applies to DOW. How far will it go? They 'always find the money' in the end.

Technically watch key levels - nothing new, we've been talking about these levels on this site for a while.

Many hedge fund managers have lost all their gains over last 6 months to a year...there's a lot of pain out there.

Thursday EMU ECB rate announcement important - markets will tank at no action; fall and then rise on 0.25% rise and heave up on 0.5%. He doubts they will raise by 0.5%.

Returning to technical analysis - he uses Gann and thinks this is the best indicator around. Predicted the top and steps in this fall very accurately.

Long chat with Simon about spreadbetting, different pricing, slippage, hedging...etc. He said of IG that they are very fair players in the industry (unlike Cantor and City Index) but they have to charge more to pay for the 200 staff they employ. 30% of IG bets taken on phone, 0.3% at Capital Spreads.

He confirmed that the FTSE 250 cash rolling bets are being added and will appear over next few weeks.

At IG Index the computer will take out a stop on a price spike. At Capital Spreads a human takes a 'view'. He claims this works in favour of the punter. They have 55,000 clients at CS and 20 staff, although I'm not clear whether that's 55,000 at CS or 55,000 over the 11 companies that use the Capital Spreads platform e.g. E-trade is CS for spreadbetting. Either way, not surprising that at busy times stops are missed (happened to me yesterday).

I have only scratched the surface of what was discussed. Richard talked for England...a real conspiracy theorist (dad was in MI5).

This morning, as I go through what was said I am less inclined to pay too much attention. For example, he said that this is a zero sum game - generally, propping up aside, the only new money that comes into the market is when there is an IPO. That's not true is it...ISA money and pension money comes in..that's new money.

Anyway, top marks to Capital Spreads - an interesting evening and nobody was 'on the sell'.