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

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!

that's interesting .... i see that Dow blipped down to 9644 during the night, hitting the "mysterious" 9650 and bouncing off it ...... keep watching with fingers crossed and breath held

jkd and dd,

Is it not the same logic that warns you about capital protection.

Lose 25% and you need to gain 33% to get even.
Lose 50% and you need to gain 100% to be back where you were.

Except that you were looking at the reverse.

TP

Don't forget it's "Non Farm Payrolls" Friday at the end of this week all.

Trouble is, it's not a question of the figures being bad, but whether they are worse than expected. So, anyone know what we should be expecting???

Non farm payroll - forecast is -165k previous -263k.

Thanks skinny. Now all we need is the help of a corruptible congressman to give us the inside info before it hits the press!

HARRY :-)

The market has been very nervous about the banks the last couple of weeks.

I'm wondering now whether today's news actually underpins everything and over the next few days (perhaps after an initial drop) we will start to see some significant movement northwards.

I think the market is correcting itself now, so even though there is the odd crumb of good news, it isn't enough to turn the trend around.
I am cashing in most of my shares which are in profit & will sit on that cash until I think the market has turned up again. Most likely some time after the friday U.S. figures.

Today's FT : RBS cheif strategist:
"Outlook:
We said in late Aug that S&P would get to 1100/1120 by end Oct/early Nov. We said growth would peak in Aug and then weaken (see above) into and in Q1. This is all playing out. As this plays out, I expect S&P to be in the mid-900s by y/e, and mid/low 800s by Q1 2010. Credit spreads will weaken materially, IG will do better than HY, QUALITY (strong balance sheets) will be the winner. I look for 750 Crossover by late 2009/early 2010, and then further weakness as Q1 unfolds. Govvies shud rally - I prefer BUNDS to USTs or GILTS. The USD will probably rally,
but I dislike any currency where PMs are simply printing. GOLD please.
GET DEFENSIVE RE RISK."

House prices up 1.2% in October
Business Financial Newswire
UK House prices rose by 1.2% last month, according to the Halfiax Building Society.

This is the fourth consecutive month that the Society has recorded an increase.

Nationally, house prices are now 7.1% higher than they were six months ago at the trough of the market but they are still 4.7% loweer than they were a year ago.

Halifax's senior economist Martin Ellis says: There are some indications that more people are deciding to put their homes on the market, encouraged by the recent improvement in market conditions.

"A continuation of this trend could help to improve the balance between supply and demand, curbing the strength of the stimulus to house prices resulting from the current imbalance."

Dow 9650 quite probably to be challenged again today ...... hope for a bounce, and a sustained one at that

"hope for a bounce, and a sustained one at that"

How about some pretties whilst we wait.....

Can't offer you the Dow as I don't track that. But I can show you the S&P 500.

All three charts are showing 3 box reversals. The middle one is a 1% box size which is what most people would use. You'll see the drop to the line that should support and bounce. It has in the past, you'll see.

The top chart is a 0.5% box. Smaller than the norm, but still showing bounce lines that worked.

My bottom chart is 1.5% boxes. Larger than one would normally use and showing now a fight at resistance.

So, Cynic, the vote is two out of three for your bounce.



TP

Thanks for that TP and very pretty it looks too.

Let's hope you're right!

and reality as i write is that Dow is pretty much b/e ..... let's hope it sustains it and consolidates above once more

And my S&P is modestly positive at 19.29.

TP