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

Efficient markets ,,over the last 2 days definitely .. :-) .

Something has fundamentally changed in these markets over the past couple of weeks. Apart from yesterday which I believe was a lot of short covering, most small caps have now stopped moving again similar to what happened before the onset of the credit crunch. There are exceptions but the market in general has a nasty feel to it. I heard someone on CNBC say yesterday that the DOW almost collapsed 800 pts Wednesday night on a spike in the $.

I'm not short so have no vested interest in the market going down but I am being very careful atm. All the bounce in the market has gone. Even stocks that have dropped to their rights prices/ placements (BAO; GFRD secondary placement at 350p; DES to name just three) aren't rising which is very strange.

end of the month tidying up, perhaps we will see a fresh surge in november, then christmas and year end profit taking? All depends on US stats between now and 31/12.

Hopefully you are right Halifax but it feels more technical to me i.e. there isn't the liquidity to push stocks up.

Looks like all the gains made over the last 24 hrs are now being trimmed back. DOW currently -28, but possibly just friday afternoon sell off. Quite tricky to predict anything atm, imo, with no sector immune from sharp drops.

what a hairy-scary week!
at least, in some ways, as Dow is already -190 or thereabouts, PG we shan't see anything too much worse during the rest of the evening

cynic if you have time can you have alook at AVM let no yr thought on it

Dow is threatening to break below 9700 (-260), but at the moment is rallying from that point, though not with huge conviction ..... 9650 is the real nail-biting point

cynic - hairy-scary week not kidding, I think next week could be even worse judging by economic data due. The rise in the dollar today must be scary for investors sitting on huge profits since March. Suspect a lot of people reacting to the US data yesterday got there fingers badly burned if they piled into the market this morning. Luckily for me this week working nights Tues,Wed,Thurs so I didn't get involved. Had 2 stock shorts open from last week EMG (murphys law took profits to early for +22.50 @ 332.0) and still in HFD, though still in profit managed to close up today +0.10, go figure.

hard to know ...... hope you're wrong; these highly volatile markets remind me of a year ago, and they're not fun!

I refer you back to post 4533.

As you say, it reminds of a year ago.

15% market correction being talked about which would take the DOW to the region of 8500.
Digitallook : "The Dow Jones ended the day at 9,712, down 249 on the previous close, erasing all Thursdays 199-point gain. The Nasdaq Composite tumbled 52 to 2,045 and the broader S&P 500 fell 29 points, or 2.8%, to 1,036.

Many experts think the much-talked about correction of as much as 15% could well be underway following a rally of more than 50% from Marchs lows."

Of course in real terms, the gap is not as big as that.

Firstly, the market dropped to a level where total economic collapse was being factored in ie we should have no need to go there again as governments appear to be reasonably on top of things

Secondly, 50% upside of very little (ie FTSE 3500pts) is not very much (1700) whereas 15% drop from here ( a top of 5300) is quite a lot (800). Thus we would be losing almost half of the 50% upside.

so many unknowns and imponderables .... caution, watchfulness and nimbleness called for

cynic - Absoluteley! Is long overdue, personally I think it can only be good for the market to consolidate has come a long way and is far removed (especially the fundamentals) from reality. My gut feeling is the cash that has been sitting on the sidelines will be used to short the market and then a rally can be considered more seriously. But hey what do I know!

The best ways to deal with increased volatility is perhaps firstly to decrease leverage or use extreme money management. Alternatively market neutral; pairs trades can insulate from extreme ducks and dives, I'm long nikkei, short dow from parity though usd/yen can mess things up

Why long Nikkei? Futures currently -60. You may be right, but surely, whichever way the Nikkei goes (with any conviction) the DOW will follow?

I'm working on the premise that the Nikkei normally trades at a premium to the Dow and is relatively oversold ... compare daily rsi. They will rise and fall together but there will be divergence/ convergence. The last time they were at parity, the nikkei added 400 we shall see...

dd
ref you post 4544
had to read it more than once,although i already understood your reasoning on the first read. i like to be sure.no doubt some will fail to understand that a rise of of 1700pts can be considered to be not very much when comparing to a possible decline of 800 pts.which might be considered to be quite a lot.where's the logic? LoL
regards
jkd

jkd

I think you understand the point I am making even if I didn't make it very well!