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

DOW tipped to open down 180 points at present.
Not sure if going long FTSE is the thing to do yet. More downside to come imo.

GM + Chrysler
these arrogant bastards don't deserve to be saved.
i suspect that at the end of the day, there will be a forced merger and a lot of overpaid and totally inept managers sacked.
inevitably a slab of the innocent workforce will also be sacrificed, but it has amazed me or many years how any of these auto m'facturers ever make a profit, for they have to sell an obscene number of new cars every year just to break even.

Don't get too worked up. It's always been a question of over capacity but with people in jobs. Something has to give eventually. Nothing you or I can do about it. I suspect, as you say, they are too big to survive in today's climate. Looks like the jobless figures are due to rise again:
"The Obama administration autos task force rejected the turnaround plans of General Motors Corp and Chrysler LLC, forcing out GM's CEO Rick Wagoner, and warned both could be put through bankruptcy to slash debts. The news sent equity markets overseas lower by more than 2%. A potential bankruptcy for the auto industry should send traders to the sidelines and look to lock in profits from last weeks gains."

i'm not worked up exactly .... it's just that we have almost never come across an efficient US biz, though they all think they know it all and are God's gift!

The managers should have a read of Durable car ownership re. Morris Minor's in their retirement (Charles Ware).Is the system of buying new cars every 3 years and then binning them fundamentally flawed! Built-in obsolescence, excessive hype, ecological cost etc., keeping up with Jones'.An old Moggy will do 40mpg, do 90mph safely with appropriate mods,have free road tax and cheap insurance and be 50+years old. Where is the progress?

well as expected ftse didn't manage to stay above 4000 for long, starting it's journey down again. Question is how long can the dollar stay strong? This is clearly affecting commodity stocks, as well as worsening news on global GDP.

China is going to start making big waves about US fiscal policy and will be looking at setting up it's own reserve currency, certainly in asia. Until the subsequent weakening of the dollar, commodities and therefore ftse will weaken, banks will come into negative focus again after such a stella rise, protectionism will resurface in next week as G20 spend alot of time talking about doing things.

negative expectations surely outweigh positive, when will it end?

Will it end in the next quarter? When will dollar weaken? When will inflation return? That's when we'll get growth in equities that is a true bull market and not a technical rally. I'm short and going with the trend.

Watched Bloomberg last night after going long wti.nikkei, ftse,s@p, Hong kong from close(all closed now). Bloke from IG interviewed reckoned it was a trader's not investors market at the moment ie short term USD strength.The drop on Dow yesterday wasn't GM/Chrysler as their weighting is small but general sentiment vix hit 45 highest for several months. One trader said 760 s@p was key support and likely to be tested this week with Jobs data on Friday . Again it was a last hour rally(short termers taking profit?). Yesterday could also have been longs taking profits but ISA rally fund managers talking things up to get investors locked in could still have an effect...sidelined

in other words he had no idea at all!
in fact, i think US on reflection will applaud the fact that GM and Chrysler were given short shrift

Lucky Alphonse had another good day at the races and is looking to continue it with a FTSE long (3908) while NY is open and looking strong ..... shall prob encash at least some of that during the course of the evening

Well, poor data from US has been well and truly shrugged off today, could this be a sign of a bull market? I haven't got a clue either!!

If 4050 breaks, could we be on for 4300, certainly volatile at the moment.

Last hour reversal yet again, rally on low volume today. Things perhaps looking grim for G20 resolutions on Thursday not good if George Soros is to believed+ jobs data on Friday should be interesting

Small Uk company apparently doing very well Cynic unsure if listed
http://www.rocks-off.uk.com/whoweare.asp

estimated 700k job losses in US last month, 3x last years figure, market shrugs it off, positive data from US re housing and confidence, albeit from low. Market is getting optimistic, suckers rally or bull market?

markets are always forward looking by 6 months or more .... however, expect a rocky ride for some time to come .... all could yet go pear-shaped

A fools rally or the start of a recovery? A difficult one. Although this rally is on low volume, some tiddlers are starting to show life and interestingly I've been able to trade and make more money over the last couple of weeks.

I'm less convinced that this is a fools rally compared to the last one. I guess 'the trend is you're friend' as long as you don't over commit and history will tell us the rest.

certainly glad i opened another FTSE long before i went to bed last night

be careful everyone ..... to me, markets are beginning to look rather frothy and certainly better to bank some profits than to see them all wither away and become losses

for myself, have sold 1/3 of FTSE longs, and also taken full profits in ANTO and KAZ ..... on the other hand, i have opened a new long in WOS which until tomorrow morning is cum rights - house prices have ticked up for the first time in 18 months

i have also opened a position in LAM, but that is with a somewhat longer view - see thread

Good piece here and sounds familiar especially after back testing my trading last weekend (for the past 6 week) where I found that although I had made a nice return if I had held longer (although I would have stopped out on 5 stocks) my return would have been to the tune of 32% better.

Try the exercise yourself, its certainly an eye opener but I guess these markets have made most very cautious.

heres the article....

Premature small-capitulation problem for investors
By Rob Mackinlay 1/04/2010 Investigate.

When the market rises investors are likely to sell too early but they could also be deterred from buying shares that have risen by small amounts, believing they have missed the boat according to Investec.


This charge could yet be levelled at Akuman, Investegates beleaguered investment club, which has sold all its shares in AIM-quoted Uranium Resources today for 1.97p each. The sale falls just short of recouping the original investment despite the stock gaining 88 per cent yesterday.

Philip Rodrigs, manager of the Investec UK Smaller Companies also believes that this theory could apply to investors in small cap funds: The herd ignores small caps advice may not help

He gives two examples that seem to confirm his view. The first is Smiths News which, along with Menzies, benefited from the downfall of Dawson Holdings last week.

At the time small cap managers looked like the losers with three funds holding Dawson in their top ten holdings but none holding Menzies or Smiths News, despite these companies being significantly larger (Investegate covered the story: Small Cap snapshot: Dawson and fund managers lose in news distribution battle)

Rodrigs said that he bought Smiths News when its shares had already increased by 14 per cent. For many investors the first bit of good news; that Smiths News had won some of Dawsons lost contracts, would have been the end of the story. For those holding the shares it would have looked like a time to sell, while those considering buying believed they had missed their chance.

Rodrigs said: The first bit of good news presaged further good news and created a kind of virtuous circle. I bought at about 50p, they are now trading at 84p (83.25p on 1 April)."

He also said that he held shares in AIM-quoted oil and gas exploration firm Afren, which saw its share price rise by 220 per cent between 16 and 30 March from 13.75p to 44.25p. Its shares now stand at 36.37.

According to Financial Express data, none of the 56,000 funds covered in its database hold either Afren or Smiths News in their top ten holdings.

Are managers missing the rally?


To comment on this article please contact :
rob.mackinlay@financialexpress.net
Tel. 020 7408 8074

Good article GF. Problem is it goes against human instinct. If I was given a penny for every time I didn't sell into a rally and then got burnt as my profit disappeared into a loss I would be very rich. Conversley, I now bank my profits although most of the time I bank too early. I find trying to judge it is impossible so it is a case of the better of two evils. Thus, I'm happy to have my profit even if eventually I could have made more.

Good point DD, but when you do a back testing exercise like I did, it does leave you a bit deflated.

Its all about getting a happy medium I guess.