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

We've had 3 bubbles this year(at least) gold+ other associated precious metals, oil, and now the US dollar. Bubbles near their popping point according to Kahn when they feature repeatedly in the front pages and become popular dinner conversation as Joe Bloggs starts to accept the premise. They always have a degree of logic and go well beyond any accepted rationale. The dollar seems to be off to the moon on the basis that it is the reserve currency of choice, interest rates can't be cut much lower, emerging market redemptions and probable significant fund speculation. We shall see. Some would argue that the US will come out of this mess before others and their leverage ratios were mildly more conservative than the 1:60 that some have created but there does seem to be a small question of massive cash injections epic trade deficits and possible de pegging. Never easy to call a top to the bubble but on the look out none the less! If it does reverse it could fire gold and oil off again!

Dow down heavily again (7975)...... could be heading for 7800, even tonight uinless there is a smart about turn

Could be heading down to a new lower trading range 688 S&p 1030 nasdaq mentioned in live oscar

Dow back up to 8143 and moving fast. But ftse held up well today when you look at the 5% drop in Dow and 6% drop in Nikki before the open.

Seems to have rallied off 8000

Probably the most ludicrous rally I have ever seen 1000 points in 2.5 hours ! Even the woke up from its Mervyn depression

So the forecast for the FTSE tomorrow is....?

re these huge rallies or falls - the only explanation I can come up with is that the computer trading programmes are just playing follow my leader

Stay away?, you must be joking MD. Have a look at trading ISF on the up and XUKS for the down..I'll leave the timing to you -):

stan , just been on the traders thread and seen one of the guys has had his biggest win ever so I have modified what I have said. It must be just me but these 100s of points moves in minutes just scares the hell out of me.

timing is always everything .....one could have easily lost money on Dow last night as made it

Maddoctor, that was me.

was not sure if you wanted your fame spread far and wide so left out name! :-)))

"re these huge rallies or falls - the only explanation I can come up with is that the computer trading programmes are just playing follow my leader"

A point I was trying to make on another thread that quickly died for apparent lack of interest.

I track the S&P 500 and it also went from about 5% down to 6.5% up.

In no way could humans made sales and purchases on five hundred different stocks over such a short period to effect that amount of change. And remember that whereas you can trade an index it trading price is determined by the value of the stocks it contains. So the computers that md is talking about are trading the 500 individual stocks - but seemingly making buys/sells based on the movement of the over-riding index.

Scarey stuff when you think that all this talk about recessions and oncoming gloom are dominated by the movement of indices like the S&P 500 - which is being driven by computers.

TP

lol MD.

TP , glad somebody is thinking the same way - although I don,t think they(the computers) are trading all the stocks - I have been wondering if they somehow pick out all the stocks say trading UP and buy those or pick all the stocks trading down and pick those. I would love somebody to try and give an explanation.

MD sometimes it can be irrelevant to "know", but just trade what you see in the short term.

Stan , agree entirely with you but interested cos something seems to have changed over the last nine years although the Elliot boys are presently showing a graph of what happened in 1930 and huge moves were made then over days in the bear market but I do not think in the minutes we are seeing now.

Yes agree with all that, but don't forget that that was then and this is now, all new territory.

I suspect last nights rally was short covering ahead of the G20 meeting. I don't suppose they'll come up with anything, but many will want to lock in profits just in case. I read somewhere this week that trading volumes are down too, so any buying or selling pressure creates relatively big moves. Given recent volatility, many will be running close stop orders, so a sharp movement against the trend probably creates a "domino effect".

My guess is we'll probably restest the lows after the weekend.

In my opinion.

Strawbs.

P.S. Well done Keaydian