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

Interesting to see while Barc is being punished, but HSBC and UBS are rising.

The difference is in the honesty and reputation of their managers over the years, IMO.

I think the clearing out process will go on for years as debt becomes re-structured and risks change. I don't believe that years of excessive lending and CDO packaging has been dealt with yet. Banks declare CDO's as assets on their balance sheets but don't define how much of assets are CDO's, what they're linked to and what risk if any exist against them being repaid in full. There's also the question of how much of this debt is unsecured personal loans or credit card debt and also of the secured debt mortgages does the asset cover the debt and by how much. Its all one very large can of worms due to the nature of the sector and its continuing need to create liquidity out of debt to drive growth.

markets now digesting BARC's pronouncements and seemingly now taking a dim(mer) view

FTSE 100, 6567 gone short. Lets see how long the trend holds up.

Good luck Shortie, I was short from 6,594 to 6,574 earlier - now just watching/waiting.

Re the banking sector, Robert Peston's book 'How do we fix this mess' makes an excellent read, and makes clear the dilemma that banks have between capital and exposure.

skinny + shortie - i know both of you try to scalp in the market, so where do you set your stops? .... merely being nosey as not for me

For index trading, I use a 10 minute chart (also have a 5 minute running) using points calculated as per Frank Ochoa's method - shown to me by Klal ( a fellow poster ) also conventional pivot S1,2,3 etc and of course personal feeling, news etc on the day.

R1 today was @6,596.36 and as posted above, I went short @6,594.

I closed on the bounce back up through the pivot point (6,570.25) @6,574.

Stops/limits depend whether I'm watching or not.

Stops and trailers all depends on what I'm trading, how much I'm trading and how volitile the trade currently is.

Right now I'm shorting the FTSE without a stop in place, the bets small and the market isn't volitile. My bet gives me a foothold in the trend I currently see on the 1hr chart. If the trend continues then I'll add to the position. If the upper channel gets broken about 6590 right now I'd be looking to close and take a loss, this is where my initial stop would be placed also as per the above chart (top diagonal resistance line).

I don't really scalp the market though, I just look for a strong trend or a developing trend and jump on the band wagon. I also trade futures in equities which I feel are under priced or again are trending strongly.

6597 extended short on FTSE

6597 extended short on FTSE

How odd - I'm short @94 and thinking - too early!

Shortie - out of interest, the software you mentioned yesterday wants limited info - your date of birth etc - do you get junk mail/contacts as a result of registering?

Skinny, I've never registered with them, I use the software that I get with my CityIndex accout which I think is provided by them.

Ok thanks.

European stock markets dropped on Wednesday after the release of disappointing German retail-sales data. Investors were staying cautious ahead of the U.S. second-quarter GDP report and the latest policy decision from the Federal Reserve. The Stoxx Europe 600 index lost 0.4% to 298.40, on track to snap a two-day winning streak. Shares of Eutelsat Communications slumped 5.3% after the satellite provider said it will buy 100% of Satelites Mexicanos SA for $831 million. Shares of ThyssenKrupp AG dropped 4% after UBS cut the German financial conglomerate to sell from buy, citing an increasing risk that it will need to raise new capital. Diageo PLC gave up 1% after the drinks maker warned of some weakness in emerging markets and continued trouble in Western Europe. The broader European stock markets also reacted to downbeat news from Germany, where data showed retail sales unexpectedly slumped in June. Sales dropped 1.5% on the month, fully erasing gains made in April and May and marking the sharpest monthly drop since December 2012. The DAX 30 index traded 0.4% lower at 8,237.59. Among other country-specific indexes, France's CAC 40 index lost 0.4% to 3,969.25 and the U.K.'s FTSE 100 index dropped 0.1% to 6,564.63. U.S. stock futures pointed to a lower open on Wall Street, ahead of an eventful day stateside. At 1:30 p.m., or 8:30 Eastern Time, second-quarter economic-growth data will be released with analysts expecting the gross domestic product to rise 1%, a decline from the 1.8% printed in the first quarter. Later in the day, and after the European market close, the Federal Open Market Committee announces its latest policy decision, with investors expected to hang on every word-change in the statement to see whether the central bank adds more clarity on the timing of tapering asset purchases.

German jobless claims unexpectedly dropped in July amid accelerating economic growth in Europe's largest economy, data from the BA labor agency showed Wednesday, indicating that the labor market is catching up further from a weak start to the year. German jobless claims in July fell by 7,000 on the month, after declining by a revised 13,000 in June and beating economists' forecast for an unchanged outcome. The data are adjusted for seasonal swings. The German labor market is benefiting from a pickup in economic activity in the second quarter, said the head of the BA, Frank-Juergen Weise. Most economists, including researchers at the Bundesbank, expect that gross domestic product gained "strongly" in the second quarter, following almost no growth at the start of the year. Germany's adjusted jobless rate, at 6.8% in July, remained stable near a record low. Germany's labor market is one of the strongest in the euro zone, where unemployment exceeds 12%. But the "onset of the summer break" in July pushed up total unemployment by 49,000 people on the month to 2.914 million people in unadjusted terms, the BA said. "That's common for this time of the year," BA said. But solid headline figures mask some underlying weakness. Total unemployment was up 38,000 from July 2012, while registered demand for labor further slipped as vacancies were down 56,000 on the year, the BA said.

i think you're quite brave to go short in these markets, as the indices on both sides of the pond look disinclined to fall much and are perhaps getting puff in their lungs for another upward swing

I carried a FTSE bet overnight Cynic so average now 6582 accross two bets. I need 6580 to break even and think there is enough swing to achieve this and possibly make a small profit. Of course this could go against me, but the last 10 days have had flat momentum and upside testing has failed.

By Alen Mattich One of the most astonishing things about the post-crisis world is how well corporate profits have performed, particularly in the U.S., at a time when ordinary people have been struggling on. Ironically, this suggests that as the economy recovers, corporate profits will come under pressure. It also threatens to pose the Federal Reserve with a conundrum if companies try to resist falling earnings by boosting their prices. That firms have done well as people suffered maybe shouldn't be so surprising. Companies sought to defend their earnings by making deep cuts in their labor forces in the wake of the financial crisis. Normally this would have rebounded on them--people without jobs don't have money to spend on things that companies produce. But the government stepped in to make up the shortfall with the biggest peace-time deficits ever. But now those government deficits are winding down and companies have started to rehire and to boost wages, however slowly. So far, this hasn't dented corporate profits too much, but that's because households are digging deeper into their pockets. John Hussman, a fund manager, notes that in the first quarter the government deficit improved by $269 billion but that was offset by a drop in household savings of $349 billion. Eventually, household dissavings will slow, particularly if market interest rates start to pick up with the economy's revival. Wages growth is unlikely to keep up with the pace of government deficit cutting, which suggests corporate margins will finally start to come under pressure. Exceptionally high margins, meanwhile, make high corporate valuations even more vulnerable to correction. Using the Shiller price to 10-year cyclically adjusted earnings ratio, which attempts to smooth out the effect of economic cycles on earnings, U.S. shares are currently on a P/E of 24, some 32% above average post-World War II valuations and 46% above valuations since the start of the series. At a more normal profits relative to revenue ratio, the current Shiller P/E ratio would be 29, according to Mr. Hussman. Bulls point to large cash holdings by non-financial firms. But they've also been ramping up their debts as well. Rising interest rates will prove to be a further squeeze on corporate profits. The upshot is likely to be inflation. With the economy picking up, firms will finally start to feel comfortable about jacking their prices up and as they do, workers will demand more in wages. And that'll be fine--it will imply normalization of the economy and allow the Fed to tighten policy--unless it happens with a relatively high unemployment rates. If that happens, there'll be a policy dilemma. And a dilemma for investors too. This is an opinion column by Alen Mattich, who has been a columnist for Dow Jones for more than a decade.

6616 short again to average 6593.3

6616 closed at 6604.5 for +11.5, now average 6582