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

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.

Strawbs, I for one do not believe a washout is going to happen - cos it did last time does not mean it will happen again. I do not wish to go to lengths here to explain my position because it has taken a lot of learning to get here. However , I asked on what basis you thought another fall was on the cards in case I had missed something. All I will say is the Elliot wave pattern on the Dow is crystal clear and anybody serious about the markets should look and learn. Whether the forecast will come to pass I do not know but it gives a solid chart basis on which to make decisions at this time , rather than rational thought!

Over the last week or so I have started to pick up what I believe to be excellent FTSE co's with a decent yield with a view to holding for 2-3 years, I shall continue to buy similar co's over the next weeks / months on bad days. I do not know where the bottom is but I feel there is a better chance sp's being higher in 2/3years time, not lower. I remember in 1991 you could pick up NEXT for 24p.
2517

Interesting comment on the Elliot wave pattern. Some leading investment analysts refuse to use the Elliot or Gann theories, preferring the Coppock Indicator, which is a weighted average market indicator. The Coppock Indicator gives buy signals when the worst of a bear market is over. Each to his own, I suppose, but you aren't necessarily right, madd!

Agree with both sides of the argument here, but my style is as i have stated, to buy when every inch of you is screaming sell, when its utter doom and gloom and the end is nigh, this is normally a great time to start stake building for the future... also can see both scenarios playing out, we could be bouncing along the bottom and the recovery would have started with out your realising it. your still aiting for the big collapse and it never comes, at what stage do you realise that confidence is back and money is piling in - that said i will be very wary of buying pressure at the moment in case the fragile confidence disappears and we have another spell of panic...

harrycat , I would not be posting on this board if I had been right enough
times :-((

The Elliot wave boys failed dismally to see the Bull Market from 2003 and if you could look back , you would see that I called them many unpleasant names on these boards cos I sold when I should have been buying!.

This morning I just put up a chart theory for calling the bottom and as I said "I have no idea if it will come to pass"

there is no right or wrong in this game , only what happens

True. Nobody knows the future. I use various charting techniques (although not Elliot), but like every other technique it's probably not 100% accurate, and I dare say subjective after the event. e.g. I could say traditional TA suggests support here, but if we bounce around for a week and then fall another 1000 points, the analysis proved correct, but said nothing about the sentiment.

I try to use a subjective view of both states to form my opinion, then add weighting accordingly. In a bull market, when people are too ready to invest, flush with spare cash, support means support. Generally the stronger the uptrend, economic backdrop, "feel good factor", the better the support is likely to be. In a bear market, where people have seen banks nationalised, houses repossesed and friends lose their jobs, they will naturally switch to a conservative stance and will pull back spending. The bigger the scare the bigger the pull back.

Whilst chart analysis is certainly useful, it can also be deceptive. When searching for a bottom, what better place to find it than where you're expecting to.

In my opinion.

Strawbs.

Why try to pick the bottom? Falling knives spring to mind. OK it maximises profits but also leads to losses. There's no hurry, the markets will take sometime to recover and I think we are in for some choppy times ahead before we can say BULL market. I'd rather spend the time looking around for long term value rather than sitting on or closing poorly timed losing trades. Doesn't mean I won't trade whilst I'm kicking my heels though.

as a good chart man I am relying on you to help pick the bottom!!!!

Agree PT. I plan to keep adding to my prospective buy list.....but don't expect to be investing in any of them for a while yet. I won't be trading though. Don't have the time to watch all day, or access to level 2, or (perhaps more importantly) much faith in anything at the moment. LOL.

Strawbs.

Today's blog quite interesting today is d'day for Lehman cds's, doesn't seem to think it's the bottom. I'm currently sidelined as find normal trading strategies are futile presently
http://market-ticker.denninger.net/

Dow has a bad case of dysentry!

DOW down nearly 500 points!
Friday looks like it could be a grim day on the FTSE. Remains to be seen how the NIKKEI reacts.

Ha, tomorrow gonna be clenched cheeks time, but i think we need this to happen, this week should see the bottom for good, or does anyone see the Dow shedding another 1500 points next week too??? lol, reality will prevail soon...

Gm shares fall to lowest level since 1950. That would be annoying for a buy and hold investor!