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

That article in The Times is all very well, but I think that the BoE are torn between the devil and the deep blue sea.

This is the BoE mandate from their website:

The Bank's Strategy

The Bank's strategic priorities endorsed by Court for 2007/08 are:

To maintain its track record of achieving the inflation target, the Bank should improve the quality and efficiency of the process supporting the Monetary Policy Committee, advance its understanding of the changing nature of the inflation process and contribute to the development of inflation targeting.

Money market operations should ensure stable overnight sterling interest rates and support improved banking system liquidity management, including by providing longer-term finance through, and adopting electronic bidding for, open market operations.

Banking operations should be focused on ensuring monetary and financial stability, thus eliminating activities that do not contribute to those objectives, while also being efficient and resilient, in large part to be achieved by continuing to deliver the objectives of the Customer Banking Transition.

The Bank should ensure that its banknotes are designed and produced in order to maintain a high level of security against counterfeiting, and that the distribution of notes, including the new 20, ensures an efficient circulation that meets the Bank's objectives for quality.

The Bank should draw on its upgraded analytical and market intelligence capabilities to deepen its understanding of the major risks to the UK financial system and work effectively with others to lower them.

The Bank should be fully prepared in its management of financial crises and its business continuity planning, within the Standing Committee framework, and should work with others to strengthen international crisis management preparations.
The Bank should promote safe and efficient payment and settlement systems and be at the forefront of best practice in operational and policy areas.

To deliver these strategic priorities, the Bank will aim for the highest business standards and will continually improve the quality and training of its people and the integrity, controls and efficiency of its systems, processes and financial reporting.

Number 1 item on the list is inflation which they are struggling to control with oil at $100. A cut in interest rates today will simply fuel inflation further and Mervy King will end up having to write a Dear Darling letter in the new year.

For there to be a cut in rates one of two things has got to happen.

Either oil has got to back away substantially from $100. Is that realistic?

Alternatively the Government would have to set a higher, more realistic, inflation target. If they did that it would be construed as an admission that they were wrong in the first place.

If the MPC do succumb to the clamour of calls for a cut, then it can only be a matter of time before they're forced to hike them up again. Imo.

Dont know what all the fuss is about the official rate of inflation bears no resemblance to reality. Statistics...... lies etc.

Closed at 6522 for 8 points, FTSE jumping around all over the place. Will now sit on sidelines and await the BOE announcement.

Just pleased I maneged to exit before midday.

a sensible move! ...... from a personal point of view, i would like to see European Central Bank cut rates, as the strong Euro (vs ) does nothing positive for our biz!

the market seems to have convinced itself that a rate cut is coming, but though that means i have "missed" some extra profit, i am happy that my decision to close out my index positions and also take other money off the table was both correct and prudent.

come 12.30 or 13.00, it will be more apparent how the markets truly interpret BoE's decision, whatever it happens to be

if there is a cut i may just (perhaps very foolishly!) be enticed into buying back into RTN or DOM, on the basis that there will be a feel-good factor and an encouragement for peeps to start spending on luxuries etc (knee-jerk relief!)

if there isn't a cut I would obviously like to short the FTSE, the only chance I might have would be after the initial fall on any bounce back.

Must admit I would now be very surprised if BOE held rates, even with their heads stuck in the sand.

well there was and that and the fed decision next week may well be the last hoorah of the bull market for the medium term. I'd expect some profit taking in next 36hours, then a bullish run to fed and then downhill from there.

If I'm feeling brave I could put both a long and short position on FTSE with a 30 point stop/loss at 6540ish and run with the winning position after the BOE announcement. I wonder.......

rate cut by 0.25% so have opened new longs both Dow and FTSE

OECD recommended fed don't cut rates again, and hold for up to a year. Fed probably will though, but wouldn't be surprised if it was only 25 points and not the widely muted 50.

Whatever it is in the price now so I generally don't see much upside from here, but I am usually wrong!!!

long FTSE at 6502

closed long at 6472 ouch, I will now write 100 lines. Never go against the trend.

got shut out of FTSE long at 6475 while out for good lunch ..... serves me right but no big damage

Had a work out and good run to clear my head, and returned to write out some rules which I will stick on my computer when trading.

1. Never go against the trend.

2. Always use stop/loss, never move them when in a losing position.

3. Always stick to my trading plan, and make sure I have a good reason for the trade.

4. When in doubt do now't, there is always another day.

5. There is no rule 5.

6. See rule 1.

7. Always use trailing stop/loss.

Good luck

I think we could all use those rules, Spitfire!

ultimately another OK day being long Dow and FTSE, the lunchtime loss being obliterated and a modest profit to boot when positions shut out o'night

closed one short for profit, keeping one running for march.

gone short again today at current level with tight stop.

Agree should write down your rules spitfire. Might benefit from reading rule 1 today!!

FTSE or Dow?
certainly i find the current Indian Rope Trick bewildering, and am inclined to short Dow, but have yet to work out an entry point

ftse today hence rule 1, will wait until tues evening to short dow