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

FWIW I believe we're near (200-300 points) the bottom and this morning added SBRY @268p to the BT.A I bought last week @257p (ok I'm shy a few p on BT.A) Anyone looking 2-3 years out will benefit from purchases made @ these levels in blue chip co's, imo.
2517

I agree. Now is probably the time to start thinking about core holdings for the future. Utilities seem to have held up quite well, though unexciting. Div yield should be maintained, though OFWAT inspection coming out in 2009, I believe.

An extract from Mike Swanson...

Yesterday once again the stock market fell - this time going through the lows set on Monday. There is still no sign of a bottom. Despite Tuesday's drop the VIX only went up a point while the put/call ratio actually closed down - in other words despite the market drop a lot of players in the options market were trying to bet on a bottom. This is a bad sign, because at bottoms you see people buying puts in mass as insurance against further declines.

We also did not see the increase in volume that I'm looking for to spot a bottom. Again let's look back at the charts I showed you yesterday, because they are so critical

This is the market bottom that came after the September 11th Bin Laden attack. Notice how when the market bottomed volume picked up into the final bottom. That has not happened yet.


The same thing happened at the bear market of 2002. I consider the current market environment very similar to what happened during this bottom. The selling became intense and as you can see the market fell a lot over eight weeks. As the market reached a bottom it fell hard on huge volume for four days.

We have not seen selling like this yet in this market - but I think it is coming. It would have started today if the central banks hadn't cut, but now it will start in a few days or a few weeks - depending on how long this government created bounce can last. I basically am expecting several high volume 3-5% down days in the market to bring us a bottom or one huge crash type day to bring a bottom to the current market and until I see that I will not be convinced we have seen a real bottom.







Earlier this morning the DOW futures were down over 200 points on the back of huge sell-offs in Asia and Europe. The Japanese Nikkei fell 9.40% while the European indices were down 4-5%. Everyday it seems we get another bailout plan or government intervention. Today it is the UK government which announced a plan to invest taxpayers' money directly into the bank and a simultaneous 50 point rate cut from all of the world's major central banks.

The futures popped up into the green on this news, but I do not believe it will stop the decline. Once this bounce ends the market will simply go down again.. I consider it a joke. I remember when I was a kid being at someone's house and we all got the idea of flushing all of the toilets in the house at the same time to see what happened. We did it - and guess what - nothing special happened. This rate cut is not going to cure the woes in the economy or stop the bear market market in stocks.

I'll say it again - the bailout plan has done nothing to restore confidence just as every single announcement of government intervention or rate cut over the past year from the Fed and Treasury have not stopped the bear market, the economic slowdown, or the credit crunch.

The market is washing itself out and it can't be stopped. The Fed can only make the market go up for short periods of time. This bear market is going to continue until all of the traders, hedge fund managers, and weak hands sell. The only people that will be left will be the few strong investors who can stomach this drop and do not sell. Every potential seller is going to sell.

We are on the verge of a panic waterfall decline that will bring us a key bottom - possibly the bottom of this bear market if the market falls enough.

A shorter then

A self-fulfilling prophecy of course if he spreads it around enough.
I'm not aware anybody can call a bottom otherwise they'd be a millionaire and would be sitting on a beach and not writing articles trying to influence people.

Only IMO

Entirely in agreement with the sentiments of your post Ted, still think we haven't reached the bottom yet; the trick will be to judge when we have and start to buy. Having said that I do think there is already good value waiting out there. I'm going to hang on for while longer though.

Am fairly well stressed at mo, although, also, cos waiting for exchange on my sale and my buyers solicitor has decided to be an utter bitch!
But am gearing myself up to handle one more massive sell off and promising myself some hefty top ups just when every inch of me is screaming 'sell'... it will take nerves of steel i believe, and depending just how big the chisel actually is, i may lose a few digits... lol!

appears to be little trading on-line.

can't get any quotes for any shares atm.

not even for 200 HBOS =240+

BT
i meant with provisions not fork handles.
good luck
regards
jkd

tonight in NY will give a strong clue, though Dow all over the place, as was FTSE earlier ..... Dow currently +30 or thereabouts having been quite heavily off not more than an hour ago ...... keep watching.

imo, though i rarely have one(!!), the consensus will be positive (with which i concur) which should bring some stability and much needed relief ..... the initial result, assuming NY keeps its head, will be a strong showing in F/E o'night followed by a good day in London - i hope!

My guess. People will keep trying to pick the bottom, but unlike any recent market crash, this one will keep on going. Why? Because the worst financial crisis since the great depression demands an equally spectacular collapse. It also wouldn't surprise me, that after promising billions and billions in bailouts, governments actually struggle to raise the money......

Charts would suggest we're near support, so a bounce may be close at hand. I wont be buying. See you again at 3000.... ;-)

In my opinion.

Strawbs.

dow future currenty 9137, ouch Not much confidence there then. will it bounce tomorrow. Probably all over the place.
Having bought ore at the bargain of 20p yesterday only to see it lose 50% first thing, I will ted to stick with ted on this one.

Strawbs,

Wouldn't disagree with much of that.

If people are in cash, it's worth staying there until the dust settles IMHO.

when people are at their most pessimistic like Strawbs , the bounce will come and they won,t recognise it.

Or they'll buy and regret it... ;-)

Actually I'm confident prices will go lower. Maybe not today, or this week, but certainly at some point. I'm happy to wait for things to settle down before I bother investing again. The best deals in the shop windows are often yesterdays bargains..... If I could monitor all day then maybe I'd go for a quick buy and sell.... but then I bet everyone else is doing that too... ;-)

Strawbs.

on what basis will prices go lower?

Simplisticly. Governments have used the interest rate trick too many times to stoke economic expansion. Excessive borrowing has to be paid back eventually, you simply can't keep borrowing your way out of recessions. Sooner or later the worlds creditors will be in as much trouble as it's debtors, and maybe already. Asset prices have risen massively on the back of debt, even if cheap money returns though (unlikely in the short to medium term), the system will only tread water. To see prices return to previous highs, new money will need to enter the system again. Money that currently doesn't exist. I see no reason to invest in a market that may simply tread water, or more likely continue downwards as the charts would suggest.

In my opinion.

Strawbs.

all the above I agree with , however , you and I have been in the market long enough to know such rational thought has little to do with stock prices!!!!

I wonder which is the next bank to go bust ?....there has got to be another one that's in trouble somewhere out there !.

MD, the Banks still won't lend to each other..now what does that say about the state of things?

Indeed MD. I've no doubt we both have our own succesful ways of investing too, which means we'll both be proved right and wrong in equal measure. As long as we're both proved right for our style of investing though, it really doesn't matter. I'm happy to give up the possibility of short term gains now, for the prospect of a more stable base to invest from later. :-)

As for rational markets. I think plenty of people have been picking the bottom, and in fact waiting for it to arrive. Not the sort of capitulation or washout point that a normal market crash creates. Which to my mind, is another sign it's not necessarily over yet.

In my opinion anyway.... :-)

Strawbs.