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

i see nymex has dropped another couple of $, but shall not try to catch the bottom - or even, in this instance, give it a gentle squeeze tempting as that might be

as long as it isn't mine .....

:-)

you never know your luck!

Nice short from the bonkers rally at the close my favourite situation to trade dow and ftse at moment, make up for nymex!

Dow
weekly price/ rsi shows a potential divergance. suggests a good rally.
dont matter what i think. i'm still a bear.be careful, be patient.
regards
jkd

am staggered by Dow rise ..... i think totally nonsensical, but thus are the markets sometimes

Possibly a case of sell on the rumour, buy on the fact (normally the other way around for long players). Volume looked pretty light, so maybe not too convincing a rise. My guess is markets are starting to price in the turnaround. e.g. It's unlikely you'll get any more 500K + job losses in a single month, so a turning point perhaps has been reached. Both DOW and FTSE are attempting to form a base, but light volume is a bit of a worry. I remain sceptical. I suspect it will turn again come Monday or Tuesday, but we'll see. Light volume over Christmas and the New Year can do strange things to an already strange market!

In my opinion.

Strawbs

i am not often gloomy, but all looks pretty horrid almost everywhere in the world and likely to get tougher still over the coming months ...... 2009 does not augur well, though i would expect to see some market recovery in late Q2 or 3 as some sort of economic recovery is perceived in 2010

Technically the Dow surfed down to the bottom of the channel and back up to the top.Fundamentally it seemed totally ludicrous but not worth trying to stop a charging bull. Oil really tanked at the ICE and Nymex close and then rose after 4;30 and 7;30 so possibly a trading opportunity there in the same way ie buy at those times if it tanks for a short term retracement, a bit like the dow at the close! I am confused about oil. I had a watch of Bloomberg last night, quite entertaining listening to the experts or talking heads trying to explain the US rally though it seems there has been some sort of auto bail-out. Their report from Nymex suggested that oil bulls were extinct and that they were betting on $20 crude.We could be in a mirror situation to oil at $100 when no one thought it possible to go higher and boy did I lose that particularly fight. This situation here is better in that it is easy to work out the downside risk of oil at one dollar and if your bet is low leverage you will be gaining at the pumps and fueling the house. I thought $43 would have held but now it looks as if $40 is the next line in the sand and then $37! I'm beginning to think that oil could drop to any price in the short term with speculative pressure and fund redemptions and a resurgent dollar but it won't last for long especially when the dollar starts faltering next year and stagflation kicks in. I have read that Kuwait stopped exporting when it hit $55 and Russia has stopped exports and is just supplying domestic demand though not sure of accuracy as on a bb. If oil stays down for long the Majors are going to start sucking up cash strapped minnows and trout like a great big catfish!

Markets are forward looking and will be trying to pick the first signs of recovery between 6 and 9 months out. I generally look for a huge spike in volume, on an otherwise uneventful day (price wise) as a sign that things might be turning. The same can be said for the top of the market too, although I normally look for "economic events" to decide if the spike in volume might indicate we're at or near a top. Thus far I've seen nothing to make me think a turnaround is near.

The market will no doubt pick several false bottoms on it's way to the real one. I think stability in credit markets and the U.S. housing market are a prerequisite before the economy turns though, and both seem a long way off.

In my opinion.

Strawbs.

ref: Falcothou ; talking about the $, it seems surprising that it is doing so well, I can't help feeling that we are going to see it dropping like a stone at some stage, probably next year, I think that you are right about the majors picking up a few minnows, for instance ; Shell possibly snapping up Northern petroleum, now that they are partners, just an example of what could happen. The smallish companies with good prospects in the ground, but not enough cash will be targets !.

strawbs - quite often disagree with your opinion (lol - when do you post anyone else's!), but not this time .... however, what to you is "long way off"? ..... i think the credit markets will stabilise first, and that may even be in Q1 ..... US housing must surely take much longer to settle with so many already unemployed and, i am afraid, an awful lot more to follow ...... however, the markets are likely (i think) to start being a little more positive in Q2/3, as already posted above

falco - i would certainly be a very happy bunny to see $ weaken, especially against and , not least because our comoany has just switched to accounting in $ but receives 35/45% of its revenue in ...... would be much happier still to see strengthen vs

The credit markets will stabilise eventually, but probably not until the scale of defaults can be sensibly calculated. The economy is a different matter. Growth for possibly the last decade has been the result of debt. That debt will take a long time to pay back. What little "real money" is left will barely keep the economy moving. Add the potential risks of a deflationary spiral into the mix and things look grim indeed.

In someone else opinion....mine too. ;-)

Strawbs

don't forget that the likes of India, China, M/E and BRIC have all been genuinely expanding, and though that will inevitably be cut back an unknown amount in the coming 12 months (or so), there is still much (new) biz to be done ..... that may not be of much immediate solace the general public in UK and USA and also Europe, though they have yet to own up, but the results will filter back down

Just been catching up the last 30 or so pages... been interesting lately, to say the least... lol Strawbs, ref : your double top charts posted couple weeks ago or so, if you draw a rising line from the base to the left, through the low of 2003, it connects with the recent low of around 3700, not saying i believe it, but that would suggest the bottom is in? I believe the turn of the year will see the markets looking towards 2010 earnings, as 2009 doom already factored in.
Falco, im with you - got burnt short on oil earlier in year at just over the $100 mark, and again recently going long in the $50's, a tad early! although i was making shed loads for a couple of weeks! just for ref using City Index, who will accept $2 (or around 1.40 p/p)
According to charts both trendlines intact at the mo, we could still be within the falling resistance lines on the next leg down (although the FTSE really didn't want to go under 4000 on friday, did it???) and we are still within the recent set of rising trendlines, from memory i think we are getting quite close to the upper trendline of the down channel, so i guess a largish move one way or the other should be on the cards - either a fall on the next leg down or an upward break to continue the rising channel... still anyones guess...

Worth reading imo...


A. Stock markets lead fundamentals. It's perfectly normal to expect stocks to bottom before the fundamentals of the economy start to look any better.


The Dow bottomed in 1932. But economic numbers didn't head up until 1935.
Indeed, during the Great Depression, the Dow bottomed in 1932. But bad economic news continued to stream out for another three years, with economic stats not showing any signs of turning up until 1935.

In the next great bear market, the 45% loss in the Dow between 1973 and 1974, the Dow rallied a whopping 53% from its 1974 low even as bad economic news poured out of the economy for the next 18 months.

[Also note that toward the end of 1974, after the Dow had bottomed , inflation started to spike higher , reaching 10.3% by early 1976. Inflation continued rising all the way through 1980, blasting gold skyward to $850. The main cause: Just like today, massive money pumping by the Fed.]

Another, more recent example comes from Sweden. In the early 1990s, Sweden experienced a housing bust worse than what's happening now in the U.S. Bad debts related to the housing collapse reached 12% of Sweden's GDP, far greater than what we're seeing in the U.S.

In September 1992, Sweden's government injected capital into failing banks and implemented blanket depositor insurance.

In the 12 months that followed, Sweden's stock market soared 42%, even while the economy continued to recede.


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Incidentally how far has the Dow receeded from its high??? 14,000 less 45% equals 7700

how to make/lose money (i had no position either way!) ..... January Nymex + about $2.00 this morning ...... next direction? ..... qui sait?

Colossal gap up from Friday bear squeeze no doubt and possible ~Santa rally but Dow futures right on the edge of the channel so gone short

Did both... closed some FGP for decent gain although holding more for greater rise??? also shorted FTSE earlier for 50 point gain (bit early in closing but profit is profit after all!), so good start to week...

Stopped out evidently,even oil has gone up! Santa or fool's rally? Euro pounding the pound again