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

My GBP/YEN future doing well, buy at 19199 yesterday and now 19384.

March 18 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may be readying the deepest interest-rate cut in a generation as the central bank struggles to prevent a meltdown in financial markets and a recession.

Traders predict the Federal Open Market Committee, meeting today in Washington, will lower the overnight lending rate by a full percentage point or more, based on futures prices in Chicago. That would be the biggest reduction since 1984, when Paul Volcker led the central bank, and would bring the benchmark rate down to 2 percent.

The Fed took emergency steps over the weekend to stave off a financial panic, lowering its rate on direct loans to banks and becoming lender of last resort for Wall Street's biggest dealers in government bonds.

``The Fed has moved very aggressively to deal with liquidity problems that are major,'' said former Fed Governor Lyle Gramley, now a senior adviser at Stanford Group Co. in Washington, who said today's reduction may be as much as a full percentage point. ``They need to be aggressive on the monetary policy side. This is the worst crisis we have faced in more than 50 years.''

The severity of the crisis was underscored by the Fed's emergency action on the evening of March 16, the first weekend policy shift since 1979. A week ago, the debate among economists was whether the Fed would cut by 50 basis points or 75 basis points.

Volcker's Fed

Now, a reduction of 1 percentage point is seen as a sure bet among futures traders and some anticipate a move of as much as 1.25 percentage points. Either would be the deepest since Volcker's Fed lowered the federal funds rate to 10 percent from 11.75 percent in October 1984.

The dollar traded at $1.5757 per euro at 7:42 a.m. in London from $1.5729 yesterday. Against the yen, the U.S. currency was 97.51 yen from 97.33. Treasuries declined, pushing the two-year yield up 3 basis points to 1.38 percent.

Bernanke, whose views on monetary policy were shaped by his scholarly work on the Great Depression, has seen losses at the world's biggest banks and securities dealers balloon to $195 billion since the start of last year, culminating in the collapse last week of the fifth-largest securities firm, Bear Stearns Cos.

Bernanke has failed to calm the turmoil, which his predecessor Alan Greenspan calls the ``most wrenching'' since the end of World War II, even after lowering the overnight rate five times since September and committing to pump an unprecedented $400 billion in cash and securities into the banking system.

Avoiding a Crash

Policy makers have scheduled an announcement at about 2:15 p.m. in Washington.

Bernanke, 54, has already stepped up efforts to keep strains in markets from triggering a crash. The Fed agreed March 16 to help finance JPMorgan Chase & Co.'s purchase of the failing Bear Stearns and the central bank offered last week to lend $200 billion in Treasuries in exchange for debt that includes mortgage-backed securities.

``The Fed will be extremely hesitant to disappoint the markets,'' said Stephen Stanley, chief economist at RBS Greenwich Capital Markets Inc. and a former member of the Richmond Fed staff, who predicts a full percentage-point cut. ``Things are still very fragile. We are in a situation where credit tightening has started to feed on itself, and it has real economic implications.''

Recession Signals

Recent economic data suggests the first recession since 2001 may have begun in December or January. Harvard University economist Martin Feldstein, a member of the committee that officially declares when a recession has started, said last week that he believed a recession was under way and it could be the most severe since World War II.

``They are worried about the spillover effects of financial markets and what they can do to keep that from happening,'' said Robert Eisenbeis, former research director at the Atlanta Fed who is now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey.

The economy expanded 0.6 percent at an annualized pace last quarter and economists surveyed by Bloomberg News this month predicted the pace will slow to 0.1 percent in January to March.

``Bernanke believes the economy is in a very serious situation right now,'' said Paul Kasriel, director of economic research at Northern Trust Co. in Chicago. ``The Fed is worried about a very severe credit contraction that can cause an even weaker economy.''

Fed's Forecast

Fed officials lowered their projections for economic growth by half a percentage point this year, according to quarterly figures published last month.

Fed Governor Frederic Mishkin said March 4 that the economy may face an ``adverse feedback loop,'' where tightening credit and a declining economy create a cycle that leads to further deteriorating conditions. The FOMC discussed that possibility during the January meeting, according to its minutes.

``The overriding concern is the condition of the financial markets.'' said William Ford, former president of the Federal Reserve Bank of Atlanta and now chairman of the finance department at Middle Tennessee State University. ``They are fighting a financial panic and want to preserve orderly markets.''

expect usual surge with the announcement followed by quick reversal ..... would be good if Dow could actually stay above 12000 or pref 12100

just picked up from CNN ..... moderately interesting ..... Goldman Sachs reports earnings well above Wall Street forecasts; CEO says market conditions 'clearly very difficult.'

and the next snippet from CNN ...... Lehman reports lower earnings that top forecasts; firm says it 'maintains strong liquidity position.' More soon.

doesn't sound bad, but it's the analysis etc that will be scrutinised

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and a tad more

Brokerage puts talk about its imminent collapse to rest after reporting better-than-expected results. Shares up 12% in pre-market trading.

Just closed a long on ftse from this morning for modest gain. not prepared to hold any longer, what happens this afternoon is anyones guess. Most people seem to be expecting a 100 bhp cut, what if it's only 50, or even 75 would be taken badly.

Far to risky for my taste, will re-access any positions this evening.

fed cuts interest rate by .75 - market did not react favourably initially.

Hopefully a good day for equities & the spreadbetters are prsumably long the FTSE?
Only oil inventories today from the U.S., so can't see them rocking the boat today either. Back from the abyss again & time to take some profits I hope, in anticipation of the next round of bad news from a U.S. bank.

Running short on wall st rolled over from last night at 12404, look a small loss last night getting the sale on. Sold GBP/YEN last night also at 19746 looking to buy at some point today if it gets to 19450. SWISS also looking to buy 19600 being the price I'm looking for.

After a rise first thing this morning on ftse the trend is down now, so short for me before dow opens. I could of course be wrong.

US Futures down and also oil + gold, were looking at higher US inflation which with higher inflation in China and Japan should help push international earnings estimates down.

Morgan Stanley earnings still to come though, even if they do beat estimates the longer term outlook for earnings I wouldn't have thought to be positive.

12259 closed wall st positions... Playing safe...

19439 buy GBP/YEN on June Futures

for once - I managed to make some cash on shorting the Ftse this evening - but closed too early again - still - I was satisfied with my gain. Closed all positions tonight

Been in London all day, so have not been able to watch a screen.
Having assumed we would mirror the DOW 400 pt rise of yesterday, things seem to have gone t*ts up today. Not sure why, but miners seems to have been hit pretty hard. Looks like profit taking, so hopefully a slow rise to follow.
Interesting that a totally unsubstantiated rumour that HBOS was seeking extra finance has been quashed, but moved the sp considerably. Dark forces at work!
Don't blame you guys for not holding your positions open. Quite a bit of data from the U.K. & U.S. thurs, so anything could happen.

Miners may have been affected by turn in the dollar, fears of recession and general drop in commodities. Market sentiment seems to swing manically at the moment and FTSE seems to have decoupled from DOW probably because of the miners and because US is still in post rate change euphoria still!

At the moment there is a partial meltdown of good stocks...really crazy...I hope this ends soon....because : as things drop ...people sell and the more people sell...and so forth ! at this rate shorting will be the only thing to do !

This is a time to either be out of the markets completely and just watching until such times as some order returns, or short anything that became overbought in the bull run and is trading with an overinflated PE ratio, or if you firmly believe in a certain company just buy them on the dips....

Agree BigTed...I reckon certain banks are in serious trouble and are liquidating positions in a big way (just guessing on that one) !