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

Analysis - Fed delay both delights, confounds investors

The last couple of paragraphs :-

"I think the Fed is very concerned about the potential for political dysfunction and to start withdrawing stimulus now might be to put something back in the bag that they may need in literally a couple of weeks," said Brad McMillan, chief investment officer at Commonwealth Financial in Waltham, Massachusetts.

And that leaves investors wrestling with whether to be happy or worried.

On one hand, "people are going to say, ‘Hey, great, the Fed is back in the game, they've still got our backs,'" said McMillan. But "from a real economy standpoint, what (this decision) says is the Fed is more nervous about the economy than generally perceived."

FTSE falling reality beginning to sink in nothing has changed.

not quite true, but certainly some profit-taking

ASC was ridiculous (don't hold in either direction), and looks like some badly burned bears as traffic very heavy for them

for myself, i did succumb at the very last knocking and bought back my "trading" contract in NMX 3720 at 10343 (sold this am at 10407)

Harry,

That's Ok - I shall forgive you on this occasion, although please note that I shall accept nothing short of immortality in future.

:o)

Regarding the market always being right, however, I would assert that the market is simply a place where buyers and sellers come together and find a common price level at which to trade. All the time that the market is able to successfully match its buyers and sellers, it is unquestionably right.

News, data releases and speeches simply serve as a catalyst to change the balance of buyers and sellers which, in turn, can lead to new price levels being set. If you (or Anatole Kaletsky) are suggesting that the various Fed commentators had incorrectly induced market participants into thinking that the Fed would taper last night, I still think you're mistaken. When you look at the charts for both cable and the Dow on a slower timeframe (eg. 1hr or 4hr), it's pretty clear that both markets had been trending upwards since the start of September. Last night's news simply prompted an extension of the moves which had already been in place for some 2 or 3 weeks. If the market had seriously been expecting anything different to that which we saw last night, then we would have almost certainly seen the bounding lines of those 2 or 3 week uptrends being broken in a flash.

That wasn't the case, so, again, I have to conclude that the market got it right.

The market is always right!!!!!!!!!! what a load of bollocks the market is always wrong.

Think about it, how would opportunitys arise if it was always right. !!!!!!!!

LOL here we go, well I suppose Goldfinger for someone who's always looking for a breakout and the market being overbought or oversold you would think that its always wrong.... However Hilary has to be right saying that the market is always right as the market needs to find a buyer and seller agreeing on a price, thats a fact..

Overbought, oversold, breaking out is mere speculation, nothing more..

As a leading global economist, Fishfinger, I would have expected you of all people to have a thorough understanding of both Game Theory and Efficient Markets Hypothesis, but I was clearly mistaken.

My oh my, whatever do they teach at Holmfirth University nowadays (aside from spelling and grammar)?

Youd have a neutral lock down if the market was always right......think about it. Maybe I should have said the market is in many cases wrong.

And by the way Hilary old boy Ive read more books on Efficient Markets Hypothesis than youve used slices of bog roll.

The first thing they teach you at the 'Institute Of Traders' seminar is that the Market Is Always Nearly Wrong and that is why opportunitys are thrown up.

Why would you need to read lots of books on the subject? Were you too thick to understand the concept at the first attempt?

And the 'Institute Of Traders' seminar sounds rather interesting. Where did you have to go to for that exactly?

PS. What prompted you to unsquelch me? Or was that yet another one of your incessant lies, and you never actually squelched me in the first place? Haystack did say that you were far too vain to squelch people because you'd worry too much about missing something, and I'm inclined to agree.

Here we are Hilary old lad, it would appear you need re- engineering in the way you think on the market.......mind the old ways of thinking on the market are now defunkt.

http://www.instutrade.com/

Ohhhh and by the way Hilary old chap youl find its one massive step up from the Robbie Burns seminar you went on for your training LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL.

Oh right, I live in your wake and bow to your superior knowledge, Fishfinger. That course sounds like it's the dog's danglies. Unfortunately I had to make do with selling fruit and veg in Surrey Street Market as a teenager to learn how markets work. Hey ho, but I did have fun schmoozing the grannies and grandads.

And you were OK coming down to London on your own?

I thought fish baiting had died out with bear baiting......obviously not.

Bullish?

Just as a final comment on the tapering issue, the IC carried an article last week starting as follows:
"The long awaited 'tapering' of the Federal Reserve's QE policy is likely to begin on wednesday. Economists expect the Fed to reduce it's buying of bonds from $85bn per month to around $70bn . Tapering is, says David Woo at Bank of America Merrill Lynch 'A done deal'. "
Of course it's just yet another opinion, but these guys are presumably far more qualified to make judgements than private investors on their laptops at home?
Presumably the foreign exchange traders had positioned themselves to take advantage of a strengthening $ in the event of tapering? Or did they also know that it wasn't going to happen yet?

Harry,

I'm not aware of any currency traders being able to walk on water just yet. Maybe that's one for next month....

:o)

But, what I'm saying is that nobody knew what the Fed were going to do. Traders would have only been interested in being long if the market went up and short if it went down.

Personally, I was already long cable from the morning of the Fed and I was happy to hold that position over the news because I considered the downside risk minimal. The day before it had been trading in a narrow range between 1.5885 and 1.5915. On the morning of the Fed, it broke to the topside of that range and resumed the uptrend which had been in place for a few weeks and which was clearly defined by a rising trendline which could be used as a stop. By the time of the Fed announcement, that position was already about 40 or 50 pips in the money and the market had moved into another range between 1.5960 and 1.5980.

I regularly use robots to enter the market and manage trades, and I have one that can be used on news releases. Basically, I set it up with its psuedo code saying:

If it's 5 minutes either side of the news

AND

the bid is greater than 1.5995 and the offer is less than 1.6015 (ie. the market goes up) -> GO LONG

OR

the offer is less than 1.5945 and the bid is greater than 1.5925 (ie. the market falls on the news) -> GO SHORT

I trade with 3 different raw spread ECN brokers (FinFX, FXCC and AxiTrader), and I run a rack of HP DL380 servers from the cellar of Nelson Mandela Towers. Normal round trip latency on a trade for me (ie. send the order to the broker, wait for its execution and get a ticket back) is around 400ms. On Wednesday night, I set the bots to trade up to 20 lots with each broker which was, in turn, split into 4 x 5 lots in case there wasn't the liquidity in the pool on a flash rise/crash. I managed to get 1 x 5 lot trade away with each broker. Presumably, by the time the bot looped around on the next price tick, the price had moved away from my entry range.

The alternative to that approach would have been to use buy or sell stops, but they wouldn't have been guaranteed and the risk would have been of getting a fill which was 50 pips or more away from the order level.

I closed Wednesday's trades manually after the football and once the market had settled. I've gone long cable again this morning.

The other thing to note is that I also act as an introducer for over 20 different Forex brokers. On both Tuesday and Wednesday, my commissions were down heavily, suggesting that most traders were hiding behind the sofa for the Fed.

Well done with that one Hils, just before the Fed I wimped out of a long EURUSD trade that I had held since 9/9 for 150 pips which would have been doubled. I also went long on cable this morning just after the new H4 bar on the basis that the H4 and daily trends are both up and there had been a retracement to the 21LWMA.

LOL... Rodney you dip-stick...

6620.8 gone short

Its witching - I've put a couple of limits in.