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

Due today:
"Merrill Lynch and a number of other financial services firms due to report quarterly results before the start of trade in the U.S.
The December housing starts and building permits reports are also due before the start of trade."
Don't get your hopes up too much!

"Merrill Lynch reported a quarterly operating loss of over $10 billion Thursday that was much worse than expected, and the company also announced an $11.5 billion writedown related to the subprime crisis."

DOW currently tipped to open down 33 points.

Shocking figures, after some initial weakness on the ML numbers, the uk banks have picked up the baton again, they aren't running though just a casual stroll atm. This morning the DOW was expected to open up around 80 points, so it's weakened from then. Good luck all.
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Very messy indeed!

damn chart update was 2/3 days late ...... since 20 mins ago modestly short both Dow and FTSE and almost sorry to say both already in the money

Dow stopped out at limit, so a little profit in the bank; FTSE left open and, i am almost frightened to say, also pretty well in the money ..... London could be very scary tomorrow

It would be a disaster.

closed london short .... Fed heavies clearly about to wade in very heavily to try to stop bloodshed ..... good news at least in the short term

Well, what a market we have here !, stockpicking and timing will be essential this coming 2008, very difficult.

a more detailed extract of what Mr B said last night for you all to contemplate .....

Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow.

"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next twelve months or so," Bernanke said.

Bernanke said that current losses from the subprime mortgage mess were probably about $100 billion but cautioned that this figure could wind up being higher.

During Thursday's hearing, Bernanke said he thought a fiscal stimulus package of up to $150 billion, would be "reasonable."

Bernanke cautioned though that any stimulus "should be explicitly temporary" in order "to avoid unwanted stimulus beyond the near-term horizon and, importantly, to preclude an increase in the federal government's structural budget deficit."

The Fed chairman said that extending some of the tax cuts engineered by Bush in 2001 and 2003, which are set to expire in 2010, could have a positive impact on the stock market today. He singled out the cut on dividend taxes as particularly key to stimulating the economy.

Bernanke stopped short of suggesting that the Bush tax cuts should be made permanent. He said he's most in favor of the "law of arithmetic" - regardless of what Congress spends on fiscal stimulus, it should make sure that it had the resources to support the package.

I think I am correct in saying that the DOW is tipped to open up 129 points, so hopefully may see the FTSE continue it's recovery today!

Amazing how sentiment changes so quickly, I went out at 09:30 with ftse heading down 40 point's and full of pessimism, looking like it would head much lower. Then up 80 point's when I returned and opposite sentiment.

This market is so volatile at the moment, with extreme mood swings, they need a good dose of prozac.

I understand the FTSE is on a PE of 11.
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i RECON THE ftse WILL BE NEGATIVE BY THE CLOSE ??

It's the same old story push the market up in the morning and stuff the suckers in the afternoon just like Wall Street has been rigged for the past weeks.

It's certainly been a rollercoaster today, a great day for trading the index, trouble is you need to be more of a gambler than me.

2517GEORGE

A PE of 11 is cheap, when you factor in that alot of companies in the Oil and Gas sector are priced much higher. So other sectors would be much less, having factored in much forward bad news.

I would interested to know the average ftse PE in the past, during other weak times. Maybe 1973/4, 1987, 1990/1 and year 2002.

I will try and search for the ratios, but if anyone else knows, I would appreciate the info.

spitfire43----Don't forget the PE is historic, yes it seems cheap as a whole, but within that there are individual stocks that have the capacity to disappoint on the earnings side, and therefore their PE would increase. I would be wary of dollar earners myself, having said that there appears to be an awful lot of bad news priced in. I believe the market is content with a PE of 17 in times of normal growth. I heard a guy today on Squawkbox (may have been from ING, I'm not sure) say that on a PE of 11 it wasn't a market to short.
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very difficult; potentially very nasty indeed.
according to advice i have received ....

FTSE
key level is/was 5900/5910
currently 5885 which cannot be called a break downwards but is perilously close nevertheless, especially after a cheery earlier day.
IF this further downtrend is established, then 5065 is on the cards.

DOW
having comprehensively missed or ignored the down signals at 12800 and then about 12450, 12000 should provide decent support.
looks as though might easily be tested later this evening as now -75 at 12090 after + about 150

UNKNOWN FACTOR
it is already heavily signalled that the Fed is going to come in with some strong action.
inevitably this will have potential long term inflationary implications.
one would guess that everything will surge on publication of the measures, but it is decidedly questioonable whether or not that can be sustained

Yes very scary cynic, I also heard today that bonds were sold off first, then equities which we have seen, notwithstanding your scenario above, and then it is the turn of commodities. The guy from ING mentioned that they (ING) had called the market a sell in October 07 and were looking for a 20% drop, so far the fall is around 14% and he saw no reason to alter their stance.
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