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

well that's another scary week out of the way that has seen fall yet another 4.5% against to just over 1.07, a "pretend" bailout of the US car makers and oil finishing in NY at $33.87.

so what's ahead?

between now and end year, i would expect to see Dow falling further and oil having a sharp bounce, even if it is only the traders squaring away their books.

2009 will inevitably be tough, but as always, the chemical industry will almost certainly show when the trough is at or nearing its nadir.

worldwide, manufacturers are destocking as demand falls and uncertainty, the bane of everyone's life, remains foremost ..... however, a company can only destock once - it can go bankrupt of course, which will happen to many - and sooner or later, it will need to start buying its base chemicals once more ...... my gut feeling is that this will slowly restart in the second half of next year, but i state that with no real conviction.

My sister-in-law works at a small chemical firm , people are ringing up for chemicals which they mix up on the premises but the firm can't get any chemicals off suppliers because of credit restrictions. The boss has re-mortgaged his house and I think bankruptcy is looming despite a demand for their services. That's why they're so keen to get the banks lending. The long term looks like a period of sharp deflation whilst the world economies contract regulate and initiate lots of protectionist policies followed by a period of hyper inflation when oil and particularly soft commodities go ballistic when presumably it will be good to short bonds though that is probably not going to happen before mid 2009 at earliest from what I can glean.

falco .... your post does not quite follow a logical trend ..... on the one hand, you talk about long term but in the next breath you say mid 2009, which is only a very short time away.

anyway, as i am at the sharp(ish) end of worldwide chemical traffic, i'll attempt to keep this board updated when trends in that field are apparent.

cynic companies de-stocking should generate cash to tide them over the inevitable downturn as demand falls,those unable to reduce stocks will probably go bankrupt hence M&s etc rushing to bring forward seasonal sales. We don't agree that oil prices will rise rapidly as global demand will fall further in the first half of 2009 cuts by OPEC will have little impact as producing countries need cash to support their expanded infrastructure.

Mid 2009 earliest investment opportunity as supposedly best to invest 6 months before the worst. Hugh Hendry Of Electica plans to pile into Gold 2010 anticipating $2000 from there he's done a few interviews on CNBC if interested

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/3852773/Oil-at-40-a-barrel-will-cause-price-explosion-in-future.html

Gold looks good for next year, but what miserable times these are !.

M&S destocking so-called fashion items is nowhere near the same as base chemicals .... fashion has a season, and once that is past, the stock is almost worthless .... they need to get rid of it and fast!

i can tell you now, that saudi has effectively stopped well development, but Aramco who control this sort of thing, are notoriously fickle and even disorganised and are almost as likely to hit the panic button in late jan/feb as to stay standing still.

my own view is that the current oil price is as much speculator driven as was the silly level reached earlier this year ..... US monthly crude stock report will give the obvious clue as to demand, and hence the likely course of crude prices ..... however, as posted before, i would still be far from surprised to see crude spiking before year end

Hope so Cynic !.

money and mouth have now joined hands, to mix a metaphor, and have just taken a small long in Feb Nymex at $41.07 ..... there is a premium in there of (i guess) about $1.00 so you can easily track my gloom and elation vicariously!

A long bet on the FTSE at 4200 looks a reasonable bet to me ?

along bet at 4200 followed by a short bet at 4300 - would have been an excellent bet - shame I did not follow my own advice - but I have lost too much on the indices in the past - prefer to watch you professionals

lol. There's nothing professional about my portfolio I can assure you!

just possible my prediction that many crude short positions would be closed before year end could be coming true

I suspect low volumes and liquidity is helping a number of markets and shares at the moment. Unrest in the Middle East no doubt helps the oil price too. True market direction probably won't become clear until after the New Year. I must confess I'm not sure what it'll be yet though. My best guess is a sell off early on due to poor trading figures, unemployment etc., followed by an "Obama bounce" as we get close to the change over. It could equally go the other way though. Guess it depends on how the New Year hang overs play out. :-)

Good luck all with trading in 09.....

Strawbs.

A bit frightening when we don't really know whether the FTSE is heading for 2000+ or has already bottomed out. So many unanswered questions that I suspect will be answered in the next 3-6 mnths.

Most of the articles which I have read recently believe that the first quarter of 2009 will be difficult as many companies will report poor figures, unemployment will rise & the pound is weak against other major currencies. But the consensus of opinion seems to agree that the pound will strengthen against the dollar as the current $ strength is not built on any sustainable fundamental reasons & the U.S. budget deficits are going to be difficult to turn around coupled with high U.S. unemployment. Long term inflation in the U.S. & a weaking dollar(?) also seem to indicate that gold is going to be a good haven for investors.
The only commodity which no one seems to be able to agree on is oil. I have seen anything from $28 to $95pb, but if the price of oil doesn't increase then the russians are also going to be in trouble in 2009. Another conflict somewhere would certainly help the price of oil however, India/Pakistan, Middle East or Black Sea/Caspian sea areas???

I have stopped putting links to bullish articles on the day trade thread. Nobody shows any reaction to them. I would not mind a 'what a load of poppycock' once in a while. But I guess if you trade on the rumour and sell on the news then there will never be a time when it's not NO News is Good News.

And anyway if you are a day trader you don't need hope that things are sorting themselves out to make money - it's just whether you can keep it !!

However, this was in the FT on Saturday. The author makes some interesting points and I hope that at least some of them are true.

Glass half full time.....

TP

Ftse at 4400 - time to go short I think

i am certainly more than happy to stay SHORT of ASC, WOS, WPP and MKS ...... i think the december/january retail numbers will be vile with cautious forward trading statements at best