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

tomorrow could be interesting ..... papers have been full of doom and gloom for banks and retailers and uk economy in general ...... apparently 70% of trades with (scumbags) TDW last week was on the banks, with buyers outnumbering sellers 3:1 ..... i question whether that optimism will be well-founded .... i think not

The day traders must love it! Bit too risky for me though as an investment, as the future of the banks is still in question.
Wed is looking interesting with Int results from BSKYB & Vedanta, Trading statement from The Pru & a number of biggish Co's going ex-divi (including IG Gp).
Also US Unemployment Claims, US Crude Oil Inventories, US FOMC Statement, US Federal Funds Rate, all of which I expect to be worse than expected.
Sentiment is still negative, imo, but if you don't put your money in to equities (or similar), where do you put your cash? C & G B/Soc have just written to me & their best savings rate is 2.6% gross!!! Most accounts are sub 2%.

"with buyers outnumbering sellers 3:1"

Might that be fund managers selling large holdings and three times as many general punters buying them up.

In other words the professionals being pessimistic and the amateurs optimistic.

TP

TP .... don't disagree with the sentiment at least .... personally, i remain short of LLOY (and a few other stocks) and am more than happy to stay so

Yep me too cyners.

short of WOS, BDEV, IAP, PRU, and Barclays.

long, POG, RRS.

Thats a devil, IG index not taking shorts on BDEV.........swines.

Slightly off topic, but a number of you guys are shorting PRU. Recent broker upgrade to a buy & increase in sp to 300p would suggest otherwise. Obviously I am missing something, but what, please?

HC..

PRU exposure to hybrid securities from UK and EURO banks, which will be useless if banks are nationalised.

WOS going right way down and did a u turn on Barclays which is now just in profit.

Sorry to p anyone off with a long post here but quite interesting from DOW point tof view from Trader tom

Today Microsoft is worth only 136 Dow points, even though it is one of the biggest companies in the world, with a market cap of $153billion. If it went bust, it would shave off 2% of the Dow. That is all.

IBM is worth $120 billion, which is less than Microsoft. If IBM went bust, the Dow would lose over 650 points!!

The Dow Jones Industrial Average (DJIA) is a price-weighted index. The divisor for the DJIA is 7.964782. That means that every $1 a DJIA stock loses, the index loses 7.96 points, regardless of the company's market capitalization.

"Dow Jones, the keeper of the DJIA, has an unwritten rule that any DJIA stock that gets below $10 gets tossed out. As of last night's close (January 20), The DJIA had the following stocks less than $10:

Citi Group (C) = $2.80 GM (GM) = $3.50 B of A (BAC) = $5.10 Alcoa (AA) = $8.35

If all 4 stocks went to ZERO today, the Dow would lose 157 points.

In the Dow index there are 4 finance stocks. There is Citi Group, Banc of America, American Express and JP Morgan.

If all 4 stocks went to zero, the Dow would lose 331 points.

If you add GE as a finance stock, and it too went to zero, the Dow would lose 434 points.

IMPORTANT

If IBM went to zero, the Dow on this stock alone would lose more than 650 points.

As a matter of fact you can take all the financial stocks including GE and including all the Dow stocks that trade less than $10, and if they all opened at zero today, they would bring down the Dow index by less points than if IBM alone went to zero.

IBM in the world of Dow is worth MORE than Citi, BAC, GM, Alcoa, JPM, AMEX and GE!!!!

You could add Microsoft to this list and not be over where IBM is today in terms of the DJIA index.

Let's look at it another way. A 10% positive move for IBM would move the Dow up by over 60 points. A 10% move by Citigroup would increase the Dow by less than 3 points.

Falc,

Interesting indeed.

I've always used the S&P 500 as my marker. I have never understood how an index of only thirty stocks could be a measure of the US stock market. Your post makes it even more irrational.

But I suppose that if computer driven trading on individual stocks is partially driven by movement of the Dow (sell/buy Ministock Inc when the Dow hits x) you cannot ignore it.

TP

Strange that something so irrational should be the chauffeur of the world markets!

Could someone explain why WOS current sp around 186p, has been downgraded to neutral by broker UBS, with a halved target price of 300p. Surely there is plenty of upside from current levels (If UBS are serious about a 300p target) to warrant a buy, or at least an add. I see this quite often from brokers where their recommendation seem to be at odds with their sp target. I don't hold these.
2517

Part of wos problem according to papers is having debt in euros

Closed long dax /short ftse for 250 points

Well market did bounce but failed to get through level of 4300, as I seem to be getting it right for once I'm gonna stick my neck out and say that we won't get and stay above that level for more than a few days again until the end of the year (Dec) .

I expect that the data will continue to disappoint, the banks recent and spectacular run will fade back to previous levels as the losses from the recession continue to hit home worse than expected, I wouldn't be surprised to see banks back at their lows at the next reporting 1/4, good chance they'll be lower.

Rights issues at miners and continuing lack of lending coupled with peoples reluctance to spend as deflation becomes the theme and continuing falls in property by as much as 20% this year will out weigh the fiscal stimulus packages for the next 1/4, we might get a bottom shortly after that if inflation starts to hint at returning, which with the weak pound shouldn't be too far away as the cost of imports holds or increases in sterling terms.

Only my opinion, probably wrong but sentiment is worsening and even people who had little economic knowledge are now talking about it routinely. (myself included you might add!!).

Still haven't hit the point of capitulation, my moneys in Gold and junior gold minors, HGM, CEY , a little in Afren, also BP and RRS. looking to get into ashtead if it drops to 35p.

AHT gone ex-divi on the 28th, so logically a drop likely, though sometimes it is priced in before the date.
Do I dare say that the worst seems over, with no nasty surprises on the horizon?
Lots of stocks seem to be trending upwards, particularly those with strong balance sheet & an assured dividend.

HC
i dont see lots of stocks trending upwards. i suppose it depends on what we consider or take as our criteria for trending, along with our time horizon.as for an assured dividend that must also be questionable in current conditions.
you could be calling the bottom with your view and maybe you are right. i dont see it just yet or for quite a while yet. i still think we have a few surprises to come along with divi cuts. thats just my opinion at the moment and i could be wrong.
anyway whats the point of an assured dividend if our capital is halved, or worse?
perhaps for some it depends on how long we have been invested in the market.
how many have seen both? i.e. capital decimated and divis cut.
i do agree with your point about having a strong balance sheet particularly for new investments or new money into the market. personally i cant see further than my nose at present, lol.
never too low to sell and bottom picking can damage your ealth. civil unrest starting to manifest itself. no arthurs around anymore to fuel the flames, so that wont help us bears. anyway i just do my best to follow the trend.
it dont matter what i think,the market will do what it will do. thats why i try to be a follower. it rarely does what i want it to anyway. currently i want it to go up so i can sell some more from a higher level on the way down.
all just my opinion.
regards
jkd

Civil unrest and protectionism have to be major possible issues in the next 12 months. Will governments have the nuance to look at the bigger picture or will they screw that up as well.

For a look at how the bottom of the market can be called wrong just look at Japan, over the last 18 months the experts have got its recovery wrong time and time again, there are still lots of downgrades to come, it will take alot longer than 16 months for this to blow over, I'd say we are at the end of the begining and certainly not at the begining of the end of this bear market.

Consumer credit lines will tighten, defaults will increase, spending still has some way to decline, unless savers think might as well spend it as rates so low, can't really see that being a possibilty though with inflation likely to return in earnest at some point they'd do better to hoard it and benefit from rising rates, whether they'd be better overall is another matter.

So return of inflation may boost stocks but it's still a long way from being clear if we'll get that anytime soon. So imho we are not at the bottom yet, the trading range seems to be getting tighter although it is still too early to be sure of that, we are going to see it go one way or the other my moneys on it being down, breaking support and then we might see a capitulation, possibly before September

Assuming the market anticipates improvement 6 months ahead. That's taking the ftse 100 into account, how the UK housing market deterioration factors into the 250's fate is anyones guess!!!

Or they could drop to further support and then finally capitulate so I'm out of going long on the market as a whole for now.

S
reading our 2 posts along with all the newspaper headlines im seriously wondering if were near a bottom. im ready for it, my stop losses are in. im also getting ready for a further sell mode. it wont happen overnight,the bottom that is, so im trying to be patient.
regards
jkd

Building Societies todays calling for the BOE not to reduce interest rates any further. A good call I think, Sterling isn't a reserve currency like the USD so doesn't have the demand. Wednesday - Thursday will be important days as the FTSE I think has priced in a further cut. If this doesn't happen Sterling will stage a recovery. Surely government must now look after Sterling to prevent national debt escalating further. How many banks are able to pass on additional cuts, so what use is a further cut within the economy? So called toxic debt is preventing the banking system from lending and will do so until either its fully/partially written down or bought/insured against default. Increased levels of quantitive measures are required I think rather then additional base rate cuts.