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

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!

2,561 points blown away in 9 days of trading.
A decade of market growth wiped out in a week.
Stand in front of this and you'll be crushed.

In my opinion....

Strawbs.

HI ALL BACK AGAIN LOL. I HAVE DECIDED GIVE SOME ADVICE WHICH IS RARE I JUST VOICE THINGS BUT DON'T OFFER ADVICE. OKAY THE PRICE OF THE FTSE IS APPROX 4100 RIGHT NOW AND YES IT COULD HIT 2700'S BUT IF YOU HAVE ENOUGH MONEY TO COVER TO ZERO SO 4000 AT 1 PER POINT WILL COVER EVERYTHING AND YOU WILL STILL GET SOME INTEREST FOR HOLDING SHORT IF IT GOES TO ZERO. YOU UNDERSTAND WHAT I MEAN. THE FTSE WILL NOT DISAPPEAR UNLESS MANKIND DISAPPEARS TOO. SO IF YOU BUY NOW OR LOWER AND HOLD FOR THE FUTURE, YOU CAN SECURE A TIDY NEST EGG FOR YOUR CHILDREN YOURSELF OR WHATEVER. IT WILL GO BACK UP FOR SURE JUST DON'T GET TOO GREEDY AND OVERSTRETCH YOURSELF.

Actually well said HT, my sentiments exactly, anything bought around now provided they are well funded and dont hold a risk associated with financials has to see great upside on a medium/long term...

Thats 25% knocked off DOW in 2 weeks, lets get tomorrow out the way, should be the big one...

MD, if I could predict where this is going to reverse with any certainty I'd probably end up a rich man!!

I think we still have further to fall, 3000-3500 for the FTSE and 8000 ish for the DOW before even considering the bottom has been reached. One thing I have learned from my forays into FX is that when you believe it can't go any further down or up, it nearly always does. (FX used to be one of the most volatile trading commodities before the Indices came along and changed everything!).

Incidentally the advice given by HiThere is nonsense. It's a bit like saying buy any old stock in the expectation if it goes down it will eventually go back up. There are no guarantees here, the rules are being re-written every day.

FTSE likely to open -350 at 3980, Dow predicting a further fall of 350 to 8300

I'm affraid it won't stop at 3000, although we may see pauses on the way. My charts don't go back any further in time anyway, so I guess beyond 3000 we're really in uncharted territory... :-)

I have a vary accurate contrarian indicator though, that suggests we'll just keep on falling (taken with a pinch of salt maybe). I tend to read a lot and spend a large amount of time in bookshops. They hold the best prediction for the future I know. I've seen large numbers of books on "How to Profit From the Internet Boom", "Making a Fortune From The Housing Market", "The Commodity Supercycle", "The World is Running Out Of Oil".... The common theme. They all appear just in time to be totally useless.

My father was very keen on doing the football pools, but wasn't very successful to be fair. When I was much much younger then today (:-) I found him a book on "How To Win The Football Pools". I offered to buy it for his birthday. He said "Don't bother, nobody's going to sell you a system that works". How right he was.

So why do I think it'll keep falling, and equities will be a wasteland for a decade or more. In the spring of this year, the local bookshop had a new set of books in the business section. "Technical Analysis", "How to Profit From Fibonachi Trading", "TA For Begginers"..... The list goes on.

I think we're doomed...... :-)

In my opinion.

Strawbs.

must have been a book by Horace Bachelor if you are old enough to remember

I have a feeling you are a 'Glass half empty' sort of chap, Strawbs?

These days I find it hard to remember much. :-) I was only a kid at the time, and we were looking for any easy birthday present, as kids do. Can't remember who it was by, but I do remember the blurb. I suppose now we'd call it spin. Rather stuck in my mind though. I suppose it's also true in a way, the best ideas are always the unique ones. I guess we won't know for sure if the "bookshop proxy" system still works until after the fact, now everyone knows about it. LOL.

Strawbs.

I did say pinch of salt Harry... :-)

Strawbs.