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

They'll always find something to worry about Cynic. If the bailout doesn't happen then they'll worry about financials going pop, if it does happen they'll worry about the state of the dollar, oil, commodities, higher inflation etc. Market movements depend a lot on overall sentiment, and if sentiment is largely negative, then there's always a downside. Unless the markets can attract new money (which seems unlikely at the moment), they'll just move up and down on low volumes until sentiment (in the real world) improves.

In my opinion.

Strawbs.

thoroughly agree .... sentiment is everything so anything that is done to improve that, whether it is Mr B and his $5bn or US Congress/Senate hammering out a bailout plan (which they will assuredly do)

You keep saying that cynic. Whilst I agree, the Senate are making me very nervous that they may water it down to some extent or even refuse to ratify it.

We are on a bit of a precipice here.

Senate/Congress will give the Republic administration a very hard time for incompetence etc etc, but at the end of the day they will ratify the bailout in an acceptable format, but prob not until well after hours on Friday if not Sunday.

To refuse to ratify would be suicide and they know it!

If they don't pass it, then it won't be the end of the world. Things might be miserable for a decade (as in the 1930's), but the financial system won't collapse. Companies will go pop, banks will go pop, and the tax payer will no doubt end up protecting all our savings. World governments have no interest in seeing the financial system collapse. Every country is interlinked, if one falls they all fall. By constantly trying to avoid failure, governments keep stoking up problems for the future. One day they may create a problem too big to save. The ultimate moral hazzard maybe.

In my opinion.

Strawbs.

There will be political point scoring in the senate, but I can't for one moment imagine them not passing this. Lets just hope that the Banks have learnt this lesson, like they should have done in the early 1990s.

When it's passed there will be a bounce, the question is how to take advantage sell or hold.

For me I would sell and buy back on weakness.

IMO

I suspect they'll pass the bill in some form, now they've managed to scare everyone into thinking it's needed. Not sure which way things will go afterwards. In theory I suppose it should be bad for the dollar, so I guess gold, oil, and non dollar currencies should rise. Which I guess is inflationary for the U.S. The stock market presumably gets a pop from the removal of uncertainty, but not sure if that'll last long. It could take a few years for people to feel confident again that banks etc. are free from trouble, so maybe the markets will stagnate for a while.
Don't know really. The markets seems very unpredictable these days. They could just as easily plunge as go up on the news. Some smart analyst will no doubt make up a reason for whatever the market decides to do. It's often the mindset of the markets participants that's more important than the reality though.

The chart TA would suggest we're going to see lower prices at some point, but then all chart patterns can be proved right over a long enough time horizon.

In my opinion.

Strawbs.

I would expect a bounce at first, but not for long before economic reality kicks in again, well thats the way I will try to trade the banks.

But as this is a indices thread - it makes a change to see FTSE ranging today, it's the first day in ages that I couldn't decide which way to go before the open. So sidelines is a good place to be today.

I'm sure there will be a big bounce at the open similar to last Friday IF it is ratified by Senate but if the market hasn't heard for sure by Monday then a crash is on our hands.

IMO

I wouldn't bank on markets rallying for too long. The next question they're bound to ask is, "what happens if this doesn't work?", and if there's no immediate impact after the package, "what do we do now?". Actually, if the impact isn't major, people will probably ask..... was a trillion enough? Maybe we need more.....

People like an instant fix. I'm not sure a mess built up over several decades can be fixed instantly though.

In my opinion.

Strawbs.

i wasn't necessarily looking for a long (initial) rally ...... in any case, as we all agreed earlier, sentiment is the driver, and as long as peeps feel things are rather more stable, the market and general spending will improve ..... obviously there will still be days of wild swings for all sorts of reasons

Yes I was talking for one day only.

That'll do for me!

They're talking about giving the money in drips and drabs whch IMO could be a disaster for the markets.

I seem to have left myself very exposed tonight for some silly reason - on the ftse I mean of course! Not sure I dare retire at my usual early hour, though I like to think that Bush will be urged to say something sensible enough for the market to rebound just a little by morning.

Bush is due to speak at 9pm US time - that's 2am here.

I watched a bit of the Paulson/Bernanke thing on Bloomberg last night. I thought one of the senators hit the nail on the head when he said "you can't borrow your way out of debt". The $700 billion bailout may slow the rate of the problem, but it won't actually fix it. Assuming it works and manages to reopen the credit markets, all that happens is companies that would otherwise be bankrupt can struggle on for a bit longer. The sensible ones, having been so close to collapse will just do everything possible to avoid being in the same position again. That means job cuts, asset sales and significantly slower growth. The others, will probably keep running up debts until they simply go pop. The bailout may avoid a meltdown in the financial system, but it won't avoid a long and painful recession.

In my opinion.

Strawbs.

In my opinion.

Strawbs.

Maybe but surely the point here is what will happen if they don't do it. I don't think it will be a financial collapse as you say but rather a total economic collapse around the world which means eg most pensions will go to start with, therefore a massive % increase of people living in poverty for the rest of their lives.

IMO it would make the great depression look like a tea party. Marx might have it right in that this is the last stage of Capitalism.

you both seem to miss the point entirely ..... it is confidence that is lacking - i.e. the banks are afraid of or lack the spare cash to lend to each other, which then spills over into the rest of the economy ..... that said, none of this cataclysm looks to have (yet?) affected either the shipping or the chemical worlds, both of which are usually first clobbered

That's my point. The likely outcome is probably going to be the same, bail out or not. The only difference being one is a massive shock to the system, the other a long and protracted one. Governments will no doubt prefer the later as they won't be in power to clear up the mess. Don't get me wrong. I think they've no choice but to spend the money, but from an equity point of view, I don't see this as a long term positive for the markets, just a short term fix.

In my opinion.

Strawbs.

Try not to be too arrogant cynic.

It is not just a question of confidence. It is a highly complex issue that is beyond the boundaries of even you. If the package isn't ratified then most banks go bust -simple and I know for a fact that our government does not have the money to pay anywhere near the 35000 payout so most people will lose a lot of money. No banks = no credit. All credit withdrawn = total system failure.