The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

Having read a good many of thee posts I get the feeling that there may be quite a few who didn't experience the bursting of the DOT.COM bubble - I know quite a few did and will remember all the talk of "Dubious Sell Off". I, along with many others, found it difficult to finally get the message - but managed to survive.

If you've only traded whilst the markets have been in the bull run take a deep breath and consider whether there is any particular reason why it should stay that way - and then look at what has driven the rise in your stocks. At the beginning of the bear run there were many who had experienced their 2/5/10/20 baggers and religiously held on whilst they dipped - many buying back into the dips - "because they were bound to go back up".

2 outstanding memories remain - Dusty Bin on the dark side who went bankrupt after making over a million trading during the boom - and Scripopholist (now best known for the Betting thread) who was heavily chastised for selling the Nasdaq at 100 a point and making a great deal of money - despite being harangued by hundreds of posters.

I hope I'm just being a bit of a doom merchant and this is just a correction - but, be warned, trade what you see, not what you think the market should do.

mg (feeling a bit like a vicar giving my Sunday sermon:))))

The big difference with the dot.com bubble is that it involved stocks being inflated to huge p/e ratios and even many stocks inflated to billions market cap which didn't have a hope of even making a profit for years. The tech stocks were exceptionally over-valued. This is nothing like the case now, when most stocks are on historically fairly low p/e ratings.

Very true .

A bit like small miners and oils now then. LOL!

mg .... i did the dot.com bubble, and also made a fortune but "forgot" to sell so lost the lot, other than paid off my mortgage (a relative pittance) ..... they were ridiculous times when it was going well; can't remember the particular stock (prob ARM), but it went up and up and up ...... i remember selling out at about 30.00 and being told i was nuts, but clearly forgot something very very basic and paid the penalty

Big Al,

Certainly some of the pure exploration stocks have been over-inflated the last few years and have now come crashing down eg VOG, EME, ELP, PANR, PCI etc etc. There's loads of them, but I have tended to avoid them.
Small miners and oils tend to have quantifiable assets in the ground which do give a value to the company without an existing profit.
Even so, the one small oil company I have invested the most in has existing production, is operationally profitable, has existing proven assets worth many times the market cap, has under-developed and unexplored lease acreage and has just secured a large finance facility on excellent terms to develop them.

So, for some, markets only go up then. The dot.com was just an example, I've been in the markets for about 15 years - that was the most notable - but there have been others - Russia, Thai etc.

All I am really saying is that it is dangerous to get too fixed in your interpretation of the markets - it's now just as easy to make money out of a bear market as it is a bull - so long as you don't try and fight it.

I won't go on 'cos I'm boring myself now.

PS. cynic - my horror story was a company called Medinvest (if my memory serves me) - bought at 10p and again up to 100p - sold half my holding at that price and my broker tried to get me to sell the lot. Instead I bought back on the way down and eventually ended up losing a packet. All the BB talk was of 200p - guaranteed - and, I should have known better, I listened to the herd. It taught me a lot of valuable lessons (some of which I have ignored) - but I'm still here and still trading so I suppose I survived - not as a cynic but as a realist - you simply can't be sure of a sure thing :)

No ones saying that the drop will be as bad as the Dot com one, but what we have seen so far has been a "Market" drop based on "news and sentiment".

What that may lead to is a further "Economic" drop based on lower sales in major economy's.

"We still have no idea where all this debt is packaged away"

More worrying then that BA is that nor do "they" and thats the real crux of the situation (see post 858) the damaging reproecutions of which people fail to appreciate. "

Add this into the equation and you can see why things are far from clear.

.com bubble.....ARM.....ahhhh, brings back some warm memories.....

:-)

Strawbs

thought for tonight/Monday ......
if Dow finishes above 13000 or even comfortably above 12800, it is likely that F/E will rebound too, especially if the former level is held.
that being so, the odds of FTSE opening better on Monday, and ditto Dow indications, must be quite short

very very happy to see finish on Dow .... shall now face Monday with equanimity if not some enthusiasm, though too much needs to be repaired to expect a smooth ride.

Worthington Nicholls reminds me of the hype that even the brokers said it will go to 230p but now 19p.

hope y'all took the tip on Experian (see post 950) - happy holiday !!!

the rise today is great but has anyone noticed that Tesco share price was down today very strange., not out the woods yet.

relating Tesco's performance to general market conditions is a complete non seq ..... however, you are quite right to say we are not out of the woods yet, and it is worth constantly reminding oneself to remain cautious and not get carried away by the euphoria of this sudden but very welcome surge.

nevertheless, whether knee jerk or not, the fact is that FTSE jumped straight back through 6000 and Dow bounced firmly off 200 dma ....... early Mondaywill see a strong perfomance in Japan and that should bring further advance of unknown magnitude in London, at least first thing; it will then be fingers x-crossed that Wall Street does no worse than consolidate, ideally holding above 13,000

Market Outlook: More From The Fed
Topics:Stock Market | Interest Rates | Ben Bernanke | Federal ReserveBy Jim Kingsland | 17 Aug 2007 | 03:48 PM ET Font size: Investors will be watching every move by the Federal Reserve for buy and sell cues after being reminded Friday that more aggressive monetary policy moves can spark explosive reactions in the financial markets. Analysts say they see credit turmoil only temporarily arrested by the Federal Reserve's surprise cut in the discount rate and that more will need to be done by the Ben Bernanke led Fed.

Linda Duessel, market strategist at Federated Investors says, "were not prepared to say we are out of the woods yet and that were through with this correction. I think the fact the Fed has done what it has done says we could end up with just a correction and not a bear market."

At the worst levels of the week, on Thursday, a variety of indices fell enough to hit a 10% decline from the late July highs marking an official "correction".

That's at the crux of the bull/bear debate -- whether the market set a bottom at the 10% 'correction' level and is set for a broader rebound, or whether more blood letting is to come. A big part of the outcome in the battle of the bulls and bears lies in large part with the Federal Reserve.

"This is not the panacea for the problems in the market, or the economy," says Ned Riley, chief executive officer of Riley Asset Management of the Fed's decision Friday morning to cut the discount rate by a-half point 5.75%. "I am very optimistic long term but the problem we have is a systemic growth problem. Weve taken the housing market out of the equation for the consumer, values have fallen and the Fed should be more continuous in this easing process."

Richard Barone, chairman of the Ancora Group of Companies, echoes those sentiments saying "the Fed has taken baby steps. It's going to have to become more vocal on what it intends to do and that is provide liquidity throughout the system."

Barone believes the Fed could initiate "another discount rate cut in the next week or two, and maybe some more jawboning into the market that they will provide liquidity if and when needed."

Peter Schiff, chief executive of Euro Pacific Capital takes a more bearish stance. He says, "the Fed can't protect the market, they cant stop the economy from collapsing. They made the bed under Greenspan and were all going to have to lie in it."

"This move is like a trial balloon," continues Schiff. "Bernanke would love to cut the Fed funds rate but he knows the dollar would collapse. Bernanke knows the economy is going into recession, but he can't tell the truth, he can't tell the truth on why hes not cutting (the Fed funds rate).

Schiff advises investors avoid financial shares. "The financials Financial Select Sector SPDR FundXLF
34.5 1.35 +4.07%


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[XLF 34.5 1.35 (+4.07%) ] went up because of short covering, but they're going a lot lower, theyre ticking time bombs. I remember the homebuilders HOUSING INDEXHGX
170.56 4.39 +2.64%


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[HGX 170.56 4.39 (+2.64%) ], people were recommending the stocks because they were trading at low multiples, but earnings vanished and earnings will vanish in the financials."

Seeking Values

"Any number of stocks that dropped to multi year lows, during the swoon of the last few weeks would be a very fine place to begin being a value investor," according to David Leibowitz, managing director of Burnham Securities, who didn't name specific stocks but commented on a variety market sectors he's looking at.

"The deeper the value, the more interest I have. I am looking looking at companies with diminutive debt, that raises the dividend every year -- companies that might be so cash flow positive that they are also buying their own shares. I am also looking at some stocks that have gotten beaten down because of events and whether theyve been beaten too much."

More Rate Cuts?

If interest rate cuts are what the bulls need to push the market higher, Robert Heller, former Federal Reserve Board governor thinks we will be seeing rate cuts.

"The Federal Reserve is saving the market now, and explicitly to reduce the anxiety in the credit market and that I think they have accomplished", says Heller. "The Fed is poised to cut (rates at the next policy makers meeting in September). The Fed funds rate is very high at 5.25% compared to 90 day Treasurys selling at 3.8% That's an enormous spread, the Fed should ease up."

As the markets wait and see what happens next in the credit markets and how the Fed reacts, John ODonoghue, head trader at Cowen & Company, sees some stability emerging into the market.

"I would tend to think were going to get into a level of stability for the next week, or two and see what shakes out, but I tend to think into any strength people will be net sellers."

ODonoghue says by this time next week the market could be not to far from unchanged or up a little bit.

I thought that there were some really good Pros and Cons covered in Saturdays FT. Still available at your local Library....well the bigger ones perhaps.

Which came out on top? Pro Bull or Bear?

People will have to take the time to look and make their own minds up as it's your own money that's being put on the line.

One article (John Plender If I remember rightly) made the point that I've been banging on about this week, that until the full extent of the debt liability is known the Market is just too risky to call at the moment. Short term Trading excepted.

As I say have a look for yourselves.

Having read around this weekend, I have come to the conclusion nobody knows yet how the market is going to respond tomorrow.
But there was an interesting article in Sunday Times by Irwin Stelzer "Bernanke to the rescue with surgical strike". In it he atttemts to put some figures to the subprime debt, but not unfortunately knock on effects.

Also an interesting article Page 2 of ST "Home Loan Frauds hits UK" by Kathryn Cooper, which I have been suspecting for some time.

Cross your fingers or your hearts for tomorrow!