This type of trading activity is generally an indication that we are about to break out from the current range but nobody is too sure which way.

As Simon Denham of recently commented, ?On the face of it, valuations appear generous with good p/e levels and solid yields versus Treasury and cash rates. On the other hand the continuing, and seemingly accelerating, rate of decline of the Global economy leaves many investors wary of taking the plunge.?

There is also the added theory that yields on corporate bonds are now so generous, and also afford investors greater protection than straight equities, that they are affecting the possible attraction for stock.

The FTSE 100 made a series of attempts to trade below the 4000 marker at the end of last year and the start of 2009 but there is a definite support between 4000 and 4030. We will probably need something new to actually break lower.

One of the major problems for any rally is that the banks seem to be on a one way trip to oblivion. Without a banking system able, or willing, to lend at some point in the future, the chances for solid growth once the recession has run its course are getting slimmer and slimmer.

Nationalisation of the banking system sounds attractive at the moment. However, State control is never efficient and without the incentive to perform (sorry, but this means bonuses and dividends) banks may retreat into a safety first mentality. That could stunt growth for years to come.

Trying to find some sense in any market activity is getting quite difficult with almost random direction being the apparent order of the day. The most successful traders at the moment seem to be those who are fastest on their feet.

The idea that you should invest for the ?long term? seems almost laughable especially when you analyse the performance of equities since the current administration came to power. The major UK indices have not moved for 11 years and this is with the continual removal of the weak stocks which are replaced with the strong/new.

If you were lucky your portfolio might be worth the same as ten years ago but with transaction costs etc this would be unlikely. So how long is a long term investment?

Daily activity on the markets continues apace with solid trading levels every day. The varied market swings seem almost designed for contrarian day trading as every big move seems to have a significant reversal almost immediately.

Unfortunately every factor seems to be working against the UK at the moment. The house of cards built by the UK Government is in danger of collapsing irreparably. Not that I am suggesting the Conservatives or Liberals would have done any better during the same period.

The hope that a weak pound will somehow help pull the UK out of the situation seems very old fashioned. We have to have a serious manufacturing base for this to be the case. With such a small percentage of our economy actually based on export manufacturing, and what we have still having to survive the global downturn, any hope of a solid recovery seems some way off.

So what to do if the markets will not go up and will not go down? Well you could trade the ranges. I have been trading them fairly well over the last couple of months but I have been doing so with small stakes. Even with small stakes there have been unpleasant moments when the markets have spiked out in one direction.

The problem with trading ranges is the markets only play ball for so long. I like . It's quick, easy and tax free*. I say ?easy?, I mean it is easy to place spread bets, it is not easy to make a consistent profit. Despite the benefits the one problem the text books never mention is that when you start trading well, you get over confident and the markets give you a slap. The slap always comes after you have increased your stakes. Before you know it, your profits and then some have gone.

For the time being I'm going to stick to trading the ranges. I will do my best to stick with small stakes. However at some point the markets will turn. They will breakout. I just hope I will be on the right side of the bet this time.

One last warning though, spread bets carry a high level of risk to your money and may not suit all forms of investor. You can lose more than your initial investment so make sure you only speculate with capital that you can afford to lose. Likewise make sure you understand the risks involved and seek independent financial advice where necessary.