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

Thanks chocolat forgot about that. Currently I'm sidelined but considering shorting cable and dow just in vicinity of 6.15pm, see if Oscar is right about the trendlines. Durable goods better than expected and drop in Libor is bullish otherwise. I expect a lot of traders will be out to sell the Fed decision but there's the chance of the market doing what you least expect! Called oil right today up $3.5. It is interesting how you often get a lag in say the dollar dropping and gold and oil rising in response. If dollar rises tonight and dow drops could expect a reversal in crude and possibly gold. I'm increasingly thinking that currencies lead the market though find them a nightmare to trade! Those with CFD accounts might want to take advantage of currency conversion today with pound stronger if they have losses! I have nice profits in sterling but deficits in dollars due to some foolhardy ventures into gold, oil and currencies!

Can't see much point in holding gold at the moment. With interest rates falling around the world and asset prices sliding, surely we're heading into a deflationary environment, rather than an inflationary one. I suppose you could argue gold is a form of security against the financial system melting down, but frankly if that happens we'll have bigger things to worry. I doubt a shiny gold bar in a vault somewhere will help much. Personally I think gold is the last commodity bubble still to burst.

Given the markets are bipolar at the moment, whatever's gone up today will probably fall and vice versa after the FOMC announcement. :-) Think the size of the cut may also influence market activity, as will tomorrows GDP figures.

Markets of all flavours are still very much a lottery though......

In my opinion.

Strawbs.

Going to plan so far get those stops in for insurance

WASHINGTON (Dow Jones)--The Federal Reserve on Wednesday slashed interest rates to four-year lows, capping a dramatic policy turn in October as the U.S. confronts a severe financial crisis and almost-certain recession.

Fed officials even left the door open to additional rate cuts to below levels not seen in a half-century, putting rates on the once-unthinkable path towards zero.

The Federal Open Market Committee voted unanimously to lower the target federal funds rate at which banks lend to each other by 0.5 percentage point to 1%, its lowest since between June 2003 and June 2004. That outcome was universally expected by Wall Street economists in a Dow Jones Newswires survey.

The Fed also reduced the discount rate charged for direct loans to banks by 0.5 percentage point to 1.25%.

"The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," the FOMC said, while the financial crisis "is likely to exert additional restraint on spending."

Though the fed funds rate was 1% as recently as 2004, few if any on Wall Street thought officials would revisit those levels again.

After all, the 2001 to 2003 easing campaign was seen by some, in hindsight, as an overreaction to the mild 2001 recession and overhyped deflation fears. Those cuts and the slow pace of tightening thereafter were criticized as the root cause of the ensuing U.S. housing bubble, the collapse of which is at the heart of the current economic storm.

But this time is different. Far from a mild downturn, the U.S. economy is poised to contract sharply. Economists expect third quarter gross domestic product figures, due for release Thursday, to show a 0.5% contraction, at an annual rate. The forecasting firm Macroeconomic Advisers expects an accelerated decline of 2.8% in the current quarter followed by another GDP dip in early 2009.

Meanwhile, the unemployment rate is expected to climb well above 7% in coming months from its current level of 6.1%. And inflation rates, though still quite elevated on an annual basis, should come down quickly in response to falling oil and gasoline prices.

"In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability," the Fed said.

As recently as the FOMC's last scheduled meeting, on Sept. 16, officials had warned that inflation remained a "significant" concern. But as the credit crunch claimed more victims and showed signs of spilling over to consumer and business spending, Fed officials on Oct. 8 - in an unprecedented joint rate cut with other major central banks including the European Central Bank and Bank of England - lowered official rates by 0.5 percentage points.

Those actions should promote growth over time, the Fed said, though "downside risks to growth remain."

Fed officials will monitor the economy and markets and "act as needed" to promote economic growth and price stability, the Fed said.

Also this month, the Fed announced a series of programs to help ailing short-term debt markets, particularly by easing corporations' access to loans they need to fund their daily operations. The market for those IOUs, or commercial paper, has suffered as money market funds - the largest group of investors in the market - remain spooked in wake of the collapse of Lehman Brothers. Some money funds had incurred significant losses from defaulted Lehman debt.

Under the Money Market Investment Funding Facility the Fed announced last week, the Fed will provide funding to help money market funds purchase certificates of deposits and commercial paper. And through its Commercial Paper Funding Facility, a complementary program that started Monday, companies such as American Express (AXP) and General Electric (GE) can sell their three-month commercial paper to the Fed.

The Fed has also extended loans to banking organizations to purchase asset-backed commercial paper, started paying interest on banks' required and excess reserve balances and boosted the size of its Term Auction Facility auctions - all in effort to encourage lending.

There are preliminary signs the Fed's backstop programs are working. A key lending rate, the London interbank offered rate, for instance, was lower Wednesday, extending a streak of consecutive daily declines over the past two weeks.

"The real story regarding the Federal Reserve is its various liquidity operations; the federal funds rate is second fiddle," said Miller Tabak bond strategist Tony Crescenzi in a research note before the FOMC decision.

Still, the fed funds rate remains a powerful tool given the new global nature of rate cuts. Until recently, the U.S. was largely alone in easing rates given that the root cause of the global downturn has been the bursting of the U.S. housing bubble.

And even if the Fed is entering the final phase of its 13-month fed funds easing cycle, other central banks may just be starting. China's central bank lowered rates Wednesday for the third time in two months, following an unexpected rate reduction on Monday by the Bank of Korea. Norway's central bank also lowered rates Wednesday.

The ECB and BOE are expected to cut interest rates further when those central banks meet next month.

Dow performing more or less as expected ..... may well hold at least some Dow shorts open overnight

that was a bit of a hairy scary evening, but made a modest profit on all Dow shorts and still have one lot open o'night.

Completely loopy sell off at close, yen strengthened against dollar late as well which may send the perhaps all important nikkei into another spin. Not keen leaving open overnight though !

indeed .... lost 450 points in last 15 minutes, from Dow's highest point in the evening to its lowest

Asia up big style looks not to be a 2 day rally, until gdp anyway

it's all nuts!

70 gap down at open on ftse but rio still in auction

Damn wanted to short open but thought to do it after, to get the tighter spreads missed opportunity. Porshe/VW story is quite fascinating, market manipulation, the biggest crowded exit of all time?

Reason for DOW sell off yesterday..........

Dow Jones news service was forced to correct a report that had quoted General Electric's top executive on 2009 earnings - after the report battered GE shares and sparked a late stock-market sell-off.

I think Germany is one of the few stock markets where a company doesn't have to disclose increased holdings. It's seems they are very pleased with themselves, having gotten revenge on hedge funds.

But at what cost ? If future business is diverted to more transparent regulated exchanges.

despite the euphoria in F/E and recovery of Dow futures o/n (how on earth do the authorities allow these duff reports - GE this time - to come out of US so often?), i think it is shallow and ill-founded ...... there is lots of horrid news to come, and at some time there will be a realisation that all these borrowings will have to be repaid somehow

The problem is economic changes are slow to show cause and effect, where as markets can act instantly. The crossroads between policy changes and market movements are often volatile. It may take several years before a stratergy is proved right or wrong, but there could be plenty of market noise in the interim. As is often the case, the smart money gets where it's going first, the rest of it plays catch up, the trick as always is spotting the change.

In my opinion.

Strawbs.

Dax at 700 point premium to ftse, probably in part due to VW shenanigans, Porsche have made a 6 billion euro profit from freeing up the market by selling 5% to the hedge funds, how kind of them! Gone for the short dax/ long ftse approach requires patience to get the convergence!Should happen if the market goes into freefall again

confess i am amazed that indication are for Dow to open +300, albeit that there was (wilful?) disinformation about GE's earnings just before Dow closed last night ..... today's GDP figures showed shrinkage of 0.3%, albeit that the pundits has been forecasting -0.5%, and new unemployment is fractionally worse at 479k against a forecast of 475k

looks as though Dow is now waking up to reality and is now barely unchanged and indeed is threatening to break down through 9000

Lots of people taking the rare opportunity of locking in profits, maybe. Last week no one wanted to hold any position open over the weekend, so would expect the same this week.