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

13:30 US unemployment data due, could move markets either way.

Markets feel very nervous this morning, I will just content myself with some bargain hunting today.

once we get through this new bout of selling after the hedge funds have liquidated all of their commodity stocks there should be some cracking bargains around. There are so many stocks at 80-90 % off their all time highs. It like shooting fish in a barrel. In the ,meantime hold on tight as the ride could be bumpy as players are flattened at the exits in the apparent stampede. I would not be surprised if the FTSE ended up near 4800 by month end.

I have seen 4800 level mentioned as target many times, I think it refers to a support level seen in early 2005. If I have read the charts correctly we first need to see a fall below 5200, which is the next support level from late 2005.

See chart below, it's only a basic chart, but it does show the support levels.

The unemployment data should be interesting. Less about the numbers, more about market sentiment. Personally I think the selling will continue for the next few weeks, regardless of the numbers. Tuesdays close on the DOW looked rather ominous to me.

In my opinion...

Strawbs.

don't disagree, esepcially with the enforced sale of equities by the hedge fund that is being closed down

however, i shall close my FTSE short before those numbers as yesterday's fall is almost certainly overdone and surely (clutching at straws?) the bad news is already discounted?

Only IMO of course but I do disagree. I'm setting myself up here but I think we're testing the recent 5200 low and as we've had several days of large losses, I believe we're due a bounce of sorts.

see my amended post above, but FTSE and Dow do not move entirely in step with oner another

have taken a small profit on FTSE short and opened Dow long with guaranteed stop ...... quite brave, but properly protected.

a useful bit of local knowledge ...... about an hour before the figures, MMs (i don't think it's IG) are quite likely to increase the guaranteed minimum stop level from 30 points (currently) to 100 or more

i was correct .... just checked and guaranteed stop is now 100 points from strike price

Sounds expensive if you happen to be on the wrong side of a spike. Good luck.

Strawbs.

Unemployment rate 6.1% from 5.7%. Market in freefall

glad i had guaranteed stop

Dollar weakening oil rising maybe commod stock won't get eviscerated. Is Buffett spending like Marcos today I wonder or waiting for vix to hit 40 ?

just picked up the following, which on balance, and assuming its accuracy, is probably good for the markets, insofar as it should give some stability ......


AFP - Saturday, September 6 05:05 amWASHINGTON (AFP) - The US government is planning to put under strict federal control troubled mortgage giants Fannie Mae and Freddie Mac, fire their top executives and use federal funds to bail them out, US media reported on their websites.

Fannie Mae and Freddie Mac, government-chartered, shareholder-owned firms that provide liquidity to the housing market, have been whipsawed by the financial meltdown in the past year, losing some 90 percent of their value on fears of losses from mortgage defaults.

A law enacted in July gives the US government the authority to buy shares or offer liquidity to the companies to keep them afloat, averting what some fear could be a major shock to an already fragile global financial system.

The Washington Post said the plan calls for placing the firms in a legal state known as conservatorship.

That means the value of the company's common stock would be diminished but not liquidated while the holdings of other securities, including company debt and preferred shares, would be protected by the government, the report said.

The government also plans to make quarterly infusions as the companies' losses warrant, The Post said citing unnamed sources.

The New York Times, for its part, reported that senior officials from the administration of President George W. Bush and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac and informed them of the plan.

The Times said it was not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars.

An American Northern Rock then, I would guess the dollar would weaken on this news, why do governments persist on short term bailouts for long term pain, if NR, F/Mae and F/Mac were allowed to fail this would send the strongest message possible to other financial institutions to (belatedly ) get their houses in order.

The banking sector in the UK has a lot more downside yet and the sooner we get there the sooner they would be able to build from a sounder base, but with the Gov tinkering it will take longer and so the pain will last longer. UK bank lending will contract markedly over the next 12-18 months. AIMO of course.
2517

because the knock-on effect is too frightening to contemplate

Very frighting, if F/Mae and F/Mac was alloweed to fail, it would be the same as letting Lloyds and Barclays to fail in the UK. I couldn't even begin to imagine the consequences.

Hmmm. Next week should be interesting then. I think the bullet of a market crash has been dodged a number of times since the credit crunch first began. Of course at the start everyone was feeling bullish, so an excuse to rally had the desired effect. Now though, we've had months and months of mounting gloom, everyday more bad economic news, and maybe an equity market in denial.

Those of a nervous disposition, look away now.....

In my opinion.

Strawbs.

I wasn't saying that I expected big market falls Monday, it depends on how markets react to F/Mae and F/Mac news, you can never be sure but I would think the reaction should be favourable, because it will remove some uncertainty.

So we may see some short term recovery, before a retest of the 5200 level.

But I feel you are right in saying we have avoided a major fall so far, and we still haven't reached the bottom yet.

only imho of course..........

and what level do you think Dow will reach?