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

just shows what an impossible market this is to trade.
after hours last night, Dow slumped another 100 points, with FTSE being dragged with it, yet we wake up this morning with Dow indicating +300 and FTSE +100 for no reason whatsoever that i can determine

Just wonder if it's Asia putting the boot in. Japan got poleaxed yesterday and Friday perhaps partly because it's economy is dependent on exports and the yen is going to the moon due to the carry trade un-winding. The hangover hits the European markets and US futures which then progressively recover only for profit taking before the close in anticipation of another Stuka!

apparently bounce is solely on the back of a strong showing in F/E o'night, though that merely recouped some of the previous devastation

One of the strange things about these big drops is the prices of certain shares when they occur. On previous FTSE higher lows for example shares such as BP were hitting 3.80 whilst yesterday they hit 4.10 now 4.60, and Glaxo which has previously hit 10 yesterday only hit 11.40 and is now 12.10. This must be to do with dollar strength and their strong divis though both could be vulnerable to governmental windfall raids, so perhaps when going for value it's worth looking at the currencies when buying. I managed to exit Lloyds yesterday at a small profit which strangely went up most of yesterday!The miners seem to be battling at key support levels with Rio fighting hard at 20 which it has hit 5 times now! If that support breaks I think the FTSE will be heading close to 3000 with its high miner weighting

BP had great figures and also, i think, offers a good divi

Markets appear to be forming a bottom at these levels. Assuming US GDP isn't really bad on Thursday, we could be lining up for a post US election, pre Christmas rally. I think markets will ultimately head lower though, probably testing sub 3000 at some point in the next 6 months.

In my (turning slightly bullish) opinion.

Strawbs.

I lucked out on a long dax short ftse trade that has looked annoyingly miserable recently but evidently due to Volkswagon getting short squeezed is showing a hansome profit. Ftse looking a bit double toppish at moment on a 10 minute chart! Arbitrage may be the way to play these markets unless you are sharp as a butcher's knife and fit as his dog. I think the market moves so fast that if you want to buy some value shares like BP, Gsk, it's worth lobbing in some cheeky buy orders e.g. bp 380, Gsk 10, Lloy 1.40

Yes, FTSe may fall to 3000, but it can rise to 5000 too. You should risk to get the reward.

If I had some spare money I might be tempted with a short term index long, but I don't, so I won't. :-) Just posting my observations really in case they're of any interest.

Strawbs.

Im neutral, but cant really see 3000 or under, prices just get too cheap...

All relative. If nobody has any money then people will only buy if prices are cheap (affordable). Works for equities just like houses, commodities, everything really. Asset prices tend to rise when people are flush with cash, and fall when they're skint. Logic tends to have little to do with it, and cheap is only relative to previous prices, not necessarily market conditions. All balances out eventualy though, even if it overshoots for years in one direction or another.

In my opinion.

Strawbs.

It is interesting to hear investment gurus talking more about companies paying dividends rather than potential capital gain, times are changing,perhaps we are going back to the days when only companies paying dividends had high ratings rather the "pie in the sky" ratings we have seen in the past decade.

From FT via trader tom
VW vies for title of worlds biggest company
By Richard Milne in London
Published: October 28 2008 09:34 | Last updated: October 28 2008 11:02
Volkswagen briefly became the worlds largest company by market capitalisation on Tuesday as panic-buying by hedge funds desperate to cover losses caused its value to shoot up by up to 150bn.

Shares in Europes largest carmaker soared as high as 1,005 in early trading, having closed at about 210 on Friday. That gave it a market capitalisation of around 296bn ($369bn), higher than that of ExxonMobil, the oil company that closed on Monday with a value of $343bn.

what a loony market .... Dow currently +800 at 8890 ...... surely to goodness this has to be far far too far too fast, with reality coming back to haunt when Fed announces the actual rate cut.

quite incredible .... as we get to the bell, Dow is up just over 1000 from it's low point o'night

Well I said I thought we were near a bottom... LOL.

You're quite right of course, the market often prefers to travel than arrive. At the moment everyone is travelling and leaving together though. I suspect this sort of behaviour can't be sustained for much longer. I doubt even the market professionals have a clue what's going on. Super volatility will no doubt make the patient very sick eventually......

In my opinion...

Strawbs

I'm sure you are right that the market professionals haven't a clue to what is happening, I just hope that not too many people were caught short today, this sort of market can wipe out an investor.

Time for caution now with reduced stakes, and sensible stops.

I was looking at blogs on another site, with some people placing ftse position from 50 to 200 a point if that can be believed, total madness if true.

That's a big jump! Jap and US rate cuts +megga short squeeze+pres election+seasonals,missed out on it but stopped out my ftse short thankfully at 3980. Buy on rumour sell on fact? Presumably 730 tonight will be US decision. Cable has reversed a fair bit I'm tempted to go long oil for some reason, US stockpiles out today certainly noticed people being more enthusiastic at the pumps though industrial usage must have dropped a lot, hope you were on the Dow train yesterday ahoj

i quite bravely went short Dow just after the bell last night, albeit with stops in place ...... imo, that rise was almost more crazy and overdone than some of the collapses we have recently seen .... i would expect Dow to fall at least 200 points today and maybe a lot more after the Fed announcement, though for sure a drop in rates will be forthcoming

How about this pairs trade long wti oil at $62, short Jonathon Ross? The latter has got a huge market cap, but might want to be disposed of by massive conglomerate after putting foot in it again!