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

Seems like a lot of respected people think otherwise though Antony Bolton, Warren Buffett Simon Thompson to name 3 all seem to expect an October election bounce. I would have thought it would have to be seen that this rescue package wasn't working before such a big drop and another US cut not out of the question. May be even the ECB as well! Could be a sub 10,000 false break out. 3 trillion dollars waiting in the sidelines looking for an entry according to market ticker

certainly a drop below 10,000 is not out of the question, but beyond question is that no one but no one has any idea how the markets are even going to react over the next week, let alone over even a slightly longer period.

for sure there are still some nasties to come out of the closet - the latest being the collapse of the Hypo Bank rescue in Germany and the lurking problems in Iceland - but i would hazard a guess that the worst will be over by the end of the year, and some slight shoots of recovery appearing by early Q2 2009, and that is really not that far away

Bailout: Will it work? .......... Experts differ on whether the $700 billion bailout plan will prompt banks to lend and help the economy. But even if it does, it will take time.

the above is the headline on an article on cnnfn.com .... it's worth reading for a balanced view

Elliot wave boys also calling the bottom but not the absolute bottom

Well, I have read up on Elliot, Gann & Fourier to try & figure out what may happen & I am totally confused, but I suppose the big boys have got some fancy software which makes it all a lot easier!
The consensus seems to be that markets will be generally flat during 2009, so for those people still holding equities, now is not the time to cash in imo, as this is probably close to the bottom.

it is interesting to note that not one pundit has said that the bailout was a waste of time and money .... the only differential is its perceived effect and the time it will take to filter through

Except that a number of sources have said that $7bn won't be enough. I have seen final figures in trillions quoted, so...... who knows?

try $700bn! ...... maybe not, but as i said ..... and also the banks are stuffed full of cash but are reluctant to lend .... anyway, all we can do is sit and wait and watch

looks as though 10,000 may indeed be imminent .... total bloodbath looking on the cards this morning

you're telling me.

Good time to buy!?

Lots of equities too terrified to come out of the auction

down 5% at start,


who dares doesn't know what they are doing

Fair old gap down on Rio £4!

what a truly terrifying start to the day ..... confess i predicted that totally and utterly wrong ...... that said, HBOS recovering a bit and at current level may be worth buying ..... glad i sold 2/3 of my original holding by close of biz friday, and at least that is still showing a very healthy profit

enrc down 20%. now in auction

next coordinated move looks to be a (certain?) sharp cut in interest rates across the world ..... however, having seen the sickening reaction of the dog once it had got its much sought after bone, one wonders how this move will be greeted.

The markets will no doubt bounce at some point as the shorts cover and sellers take a break. I suspect there'll be plenty of volatility for a while until something snaps decisively. Nobody will trust the bounces though. If you can buy on Friday and find the market 250 points underwater after the weekend, it does little for investor confidence.

In 1929 (also an election year I believe), investors thought the market would recover from it's earlier wobbles, but when they began selling in October......they just kept on going. Of course, nobody knows if we're going to have a re-run of the 1930's, but they didn't know then either, until after the event......

I would say you need to be pretty brave to buy at the moment, and you also need to be very good with your stock picks. Personally I'll stay firmly on the sidelines for now.

In my opinion.

Strawbs.

FTSE 4600 appears to be the next support level, who would bet on it not getting there?

Seems that the bad news is accelerating as more and more skeletons drop out of cupboards with resounding thumps.

Conversely the rate of decline in the FTSE is slowing down and showing divergence on the MACD which would suggest (for the moment at least) the bottom is approaching. Having said that tops and bottoms always seem to approach quicker than one thinks. If anyone has the time it would be a worthwhile exercise to study charts of a basket of comapnies and see if that divergence is replicated on individual stocks. Wonder if the Santa rally might mark the change of sentiment?

We're way overdue a bounce but as you say will it happen.

I certainly believe we can't carry on like this ie we'll either bounce or have total collapse. Wish I knew now ...

The 4300 to 4500 zone looks like a good support area to me. I find that technical analysis only works when the majority are feeling rational though...... :-)

Strawbs.