The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

Doesn't need much cause at the mo!! LOL

have just opened a small short on Dow, so shall be very happy to see sharp fall, so long as it recovers by close!

Looks like a good bet. I don't suppose many will be buying ahead of the weekend, especially with the Asian markets opening first on Monday and all the nervousness in the markets.

Strawbs.

opened short FTSE earlier this afternoon and have left it running.
opened short Dow later as stated, but closed it when i left the office ..... got hoem and back on line 30 mins later and it had dropped to -100 ..... re-opened whether rightly or wrongly time will tell

Hmmm. Don't know where that corresponds to current support levels. Seems a big move. Last time I looked it was down around 50 ish, but then I don't have live prices. If it closes over 100 points down it'll probably scare the markets again next week. IMO.

Strawbs.

correct! ...... Dow currently 12145/149 -87 .... it tried a small recovery and promptly failed .... from memory, Dow could fall to around 11900 ..... gold may well be a good play, but just wait for about $638

Cynic do you tend to spreadbet or use CFDS? I am new to the world of shorting and leverage. I understand that the former are tax-free but vulnerable to abuse from shifting spreads to trigger stop losses and their are fees for borrowing for the leverage . They must be useful as a hedge though in this environment if you don't want to incur cgt by flogging off the whole portfolio.

i used to use spread betting which i know is tax free .... confess that i have forgotten exactly how they work ..... now use CFDs .... both enacted via IG whom i find very friendly and helpful

if you need a contact i will willingly help

Thought it bounced from 12060 ish yesterday? That should be short term support now. Oh well. More wobbles next week then. Not that it matters. If we're where I think we are in the cycle, I'm expecting all gains since the correction last year to be wiped out in the next two or three months. I think that would take things back to 10700 ish on the DOW. All just in my "scarey" opinion though. :-)

Strawbs.

Your scary opinion will be reflected by many ... however neither shares nor indices rise or fall in straight lines (not even SOLA - lol!) ..... there are also shares that will go against the trend (SCHE today and no doubt others), but that does not stop it being any less scary

I agree. There's always good value to be found in any market. For the moment though I'd rather sit and wait. When these things drop they tend to throw the baby out with the bath water. If the price is right, I'll be happy to buy. Things aren't cheap enough at the moment though to reflect any "indiscriminate" downside risk. My "scarey" outlook won't be a straight line, and it's only really valid if you believe (as I do) that bull markets can't go on forever. If nothing else, eventually people want the comfort of "real money" when they start to get nervous. I also think there'll be some nasty surprises out there in the financial markets. When you leverage the gains, you leverage the pains, and I doubt if anyone truely knows how deep and complex all these interactions are. As Scotty I believe once said.....the more you over take the plumbing, the easier it is to bung up the works!

All just in my opinion......

Strawbs.

tell me; i know for that is how CFDs work!
i suspect i shall be looking much more closely at indices and probably gold which reacts differently from (not to!!) other hard commodities

Just imagine borrowing loads of Yen, changing them into dollars, and then leveraging them up to use in the market. Then when the exchange rate starts moving against you it makes it more expensive to pay back the loans, while at the same time the markets fall making your leverage margins higher and your profits lower. I dare say some will buy these "cheap" stocks to average down, but if enough sell then eventually a critical mass will develop, and the drops will feed themselves. In my "nightmare" opinion.... :-)


Strawbs.

Thanks cynic I'll set up an account with IG, if you have a contact that would be good . As I understand it, the carry trade is being disrupted by the rising yen. Dangers exist for hedge funds that have tried to chase bigger profits by going outside their centre of expertise, e.g. indiscriminate lending to private equity. Though if the yen goes up, the differentials remain the same if the corresponding currency also rises as well which it is at the moment e.g. NZ dollar. Long term capital management famously went pair shaped in 1998 and got bailed out by the banks though the level of borrowing now 280 billion would surely be excessive- financial melt down

falco .... send me an e-mail

Just make sure you're careful with that leverage. :-)

I can see lots of people going to the wall trying to second guess the markets direction when it gets this volatile. For everone making a profit, there'll be plenty making a loss, and it won't just be the big guys paying for it.......

Might also be worth trying a simulator (most seem to offer them) to see if it's right for you. Although I tried one this week and rather wish it was real money now..... :-)

Strawbs.

an excellent caveat Strawbs, especially in current markets ...... have already reduced my exposure significantly and shall prob pare a bit more, notably after figures from both RTN (should be excellent) and YUCT (not sure) this coming week.

have held open my Dow short though closed the FTSE one last night.
shall reconsider the latter on Monday, though prob after the first flurry of almost inevitable sells.
shall also take a good look at gold, which is now looking oversold ..... $638 is my entry target

With all the press coverage, I suspect people will be considering their positions over the weekend. Fund managers included. :-) One thing to remember though, markets never move in the logical direction you expect. Some will see cheap prices as a way to make some money. The fact that others will see it as a good time to sell explains the volatility. A good reason to sit on the sidelines. Trading the trend is easy when it lasts for months......not so easy when it lasts for 5 minutes.

The fact that so many asset classes have fallen together, makes me wonder if the carry trade leverage has been "spread around". If everything goes up together, does it come down together too?

Further falls in Asia may just spook the horses on Monday......and the run up to non farm payrolls on Friday might be interesting too.....

In my opinion.

Strawbs

Bit of coverage on carry trade. This could underpin market weakness until trades unwind
http://business.timesonline.co.uk/tol/business/economics/article1464436.ece

More red in Asia overnight with the Yen continuing to strenthen. Could be another mess on the FTSE and DOW later.

Take care out there......

Strawbs.