rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

Toya,

I'm sorry if I've confused you (or anybody else for that matter) if you think I've said that you should ignore the fiscal cliff.

What I'm trying to say is that the fiscal cliff does impact the market, but it isn't the largest single factor which has been moving the markets in recent times. However, reading down through the thread posts, it struck me that too much focus was being put on the fiscal cliff, whilst the largest single factor which has moved the markets recently (Japanese elections and Shinzo Abe talking about a financial nuclear bomb) was being almost totally ignored on the thread.

The other thing to bear in mind about reading press releases (like the one above) which quote US fund managers and traders is that most Americans think that the world stops when you reach the Pacific and Atlantic Oceans. If you ask them anything about Japan or Europe they won't have a clue what you're babbling on about.

Narrowing LDP lead points to Japan post-election confusion

TOKYO | Mon Dec 3, 2012 5:14am GMT

(Reuters) - Japan's opposition Liberal Democratic Party's lead has shrunk in the polls ahead of a December 16 election, suggesting the conservative party and its partner may need help to make up a majority and threatening more policy confusion for the world's third-biggest economy.

Former Prime Minister Shinzo Abe's LDP is expected to win the biggest number of seats in parliament's powerful lower house, putting Abe in pole position to form the next government, most likely with long-term LDP ally, the smaller New Komeito.

To explain a bit more, here's some relevant information.

Last week:

EURJPY +3.44% DAX +1.32%
GBPJPY +2.38% FTSE100 +0.82%
USDJPY +1.71% S&P500 +0.5%

Elections and Abe's rhetoric spurred the yen flight last week. Friday night's CoT report showed Yen shorts were at their highest in 5 years.

The bulk of those yen went into Europe, and the DAX was a major beneficiary after the Greeks were given a load of euros to blow at the start of the week. The least amount of yen went into US dollars because the fiscal cliff concerns were weighing. Consequently, the S%P was up but not as much as its European counterparts.

Easy innit? :)

A 'Glen' no less!

Obama taking tough stand on fiscal cliff talks

WASHINGTON: Political posturing by the White House and Republicans in Congress hit new heights over the weekend as the Obama administration laid out specifics of its plan for avoiding the looming “fiscal cliff” and the top Republican in Washington said he was “flabbergasted” by what he called a “nonsense” approach to solving the nation’s budget crisis.

President Barack Obama and congressional Republicans have until Dec. 31 to reach agreement on how to increase government revenue and cut spending to avoid big automatic tax increases on all Americans and massive cuts in government programs ranging from education to the military.

Adding to the negative consequences of a negotiated outcome is the coincidence of the end to two other programs at the same time — a reduction in the payroll tax that Americans pay into the federal Social Security pension program and extended government benefits to the long-term unemployed.

Economists say failure to find an accord could send the U.S. economy back into recession and cause a spike in already stubbornly high unemployment.

Thanks Hilary and Skinny :)

Moved my stop loss to 5850 - this is scary

5850 is arguably a bit HIGH for the stop loss as there should be decent support at 5820
shortie may give you a different reading

GBP Manufacturing PMI 49.1 consensus 48.1 previous 47.5

Thanks cynic

Thanks cynic

5820 is where support sits as Cynic states. However considering heavy resistance at just over 5900 a sliding stop at 5850 isn't a bad idea. As the above chart shows, if a further test occurs of 5910 then a pull back above 5850 is likely. A fall below 5850 would be a likely early warning of a change in direction. IMO..

US ISM PMI @3pm.

To frack or not to frack - Gas-fired power stations to be encouraged by government

The government is to unveil its contentious gas strategy this week.

Chancellor George Osborne has ruled that gas should continue to play a role in day-to-day electricity generation beyond 2030.

Merkel's euro push leaves east Germany out in the cold

EISENHUETTENSTADT, Germany | Mon Dec 3, 2012 11:50am GMT

(Reuters) - This fading industrial city, like many in Angela Merkel's former East German home, is stony ground for the chancellor's message of European integration and fertile soil for opponents trying to stop her winning a third term next September.

More than two decades after unification, income and jobs in the five eastern states, home to 15 percent of the population, still lag behind the west and trillions of euros in transfers have not stemmed an exodus that has left some areas looking like ghost towns.

Bank of England credit scheme sees moderate initial take-up

LONDON | Mon Dec 3, 2012 11:18am GMT

(Reuters) - British banks and building societies drew down 4.36 billion pounds from a Bank of England programme to boost lending in its first two months, in what analysts said was a moderately encouraging start.

Net lending by the banks involved rose by only 496 million pounds, but the BoE's executive director for markets, Paul Fisher, said it was too early to use Monday's data as a guide to the scheme's success - a view largely shared by economists.

Greece Makes Buyback Offer as Merkel Floats Writeoffs

Greece offered 10 billion euros ($13 billion) to buy back bonds issued earlier this year as the bailed-out nation attempts to cut a debt load that may threaten future international aid.

Greek bonds rallied after the so-called modified Dutch auction was announced today by the Athens-based Public Debt Management Agency. PDMA offered an average maximum purchase price for the bonds maturing from 2023 to 2042 of 34.1 percent, based on information in the statement. The offer runs until 5 p.m. London time on Dec. 7.

Nokia Speed Advantage Opens Way to Holiday Gain on IPhone

When Tommie Johansson was looking for a new smartphone in Stockholm last month, he quickly ruled out the iPhone 5. The reason: It’s too slow.

The Apple Inc. (AAPL) handset can’t connect to the newest networks of most European carriers. That creates a potential opening for Nokia Oyj (NOK1V) as it seeks to claw back lost market share with new phones that can take full advantage of the fastest networks.

USD Final Manufacturing PMI 52.8 consensus 51.7 previous 52.4

Bouncing off resistance, the above daily chart shows how strong 5910 is. Long term bullish bhunt?? See below...

USD ISM Manufacturing PMI 49.5 consensus 51.5 previous 51.7

USD Construction Spending m/m 1.4% consensus 0.5% previous 0.6%

USD ISM Manufacturing Prices 52.5 consensus 54.3 previous 55.0

Cheers Shortie - I am letting it run for time being - still with 5850 as my SL

Your welcome bhunt, it'll be interesting to see which way the FTSE breaks long term. Since the credit crunch we've seen a flag formation as shown in the yearly chart above (solid diagonal green support, and red resistance lines). Either direction could be argued at the moment however I feel the downside will prevail due to QE and money supply. Sooner or later the banking system will release QE funds into the open market which will affect exchange rates and cause a period of hyperinflation. We're already seeing this as unimpaired commodities soar in price. Take the UK, energy, food etc have all soared recently and the countries QE policy isn't about to reverse this trend any time soon. When the markets finally give way to QE and the central bank realises it can't print its way out of debt we'll be left with higher interest rates and over supply of money. Unless wage inflation is able to keep up then we're looking at a major contraction even a depression. Of course this isn't about to happen any time soon, look at Greece, the can keeps on being kicked further up the road. But something will have to give sooner or later and history tells us the giving normally occurs in the lining of our pockets... Of course you could argue this from the other side but lets face it, governments are unable to remove their structural deficit currently, without this first step the larger problem can't begin to be tackled. All this is IMO and I'm sure others will disagree, who knows we may end up needing a new thread...