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

20% is a key number from the high ..... a fall below allegedly signals a recession
anyway, herebelow is what the Dumbcluck had to say just before noon in NY .....

Bush: Economy needs 'shot in arm'
President says immediate, temporary tax cuts for businesses and individuals are needed to keep economy on track.January 18 2008: 11:51 AM EST

President Bush proposed an series of short-term tax cuts that he said would provide a shot in the arm for the struggling U.S. economy.

Speaking at the White House, the president did not give details of his plan but said that it would include tax breaks for both businesses and individuals, which he said must together be worth as least 1 percent of the nation's gross domestic product, or roughly $140 billion.

"By passing an effective growth package quickly we can provide a shot in the arm to keep a fundamentally strong economy healthy," said the president.

He said that his advisers believe the economy can keep growing, but that there is a risk of a downturn. "Our economy has seen challenging times before, and it is resilient," he said.

He said he was confident the measure should be able to win support from both Democrats and Republicans.


the market has clearly been most impressed!
i hope the reaction is rather better when (please God) Fed announces rate cut of at least 0.5%

I understand the details of the package will be unveiled next tuesday. So is the $ going to weaken further from here?
2517

How much of the expected Fed cut is already factored into Cable?

typed a longer and actually (for me) quite sensible response for George ..... MAM system could not believe it and collapsed when i tried to post!

in very brief then ..... not necessarily (for George) and certainly 0.25% and prob 0.5% (for Peter)

encouraging to see Dow now recovering smartly having dipped quite close (12029) to the dreaded 12000 level ..... if i was not going out for dinner tonight, might have taken a very modest long ..... anyway, it will be interesting to see

where is the money coming from , the government is already up to its neck in debt

just do not understand how they can pull these amounts of money out of a hat

SAN FRANCISCO (MarketWatch) -- Gold futures rose slightly Friday as a stimulus package announced by the White House to boost the slumping U.S. economy failed to soothe the markets, fueling safe-haven flows into the precious metal.
"The proposed 'solution' is further cheap money, liquidity and 'stimulus' -- this time in the form of showering tax rebate checks of some $150 billion on the citizenry," said Mark O'Byrne, executive director of Gold and Silver Investments Ltd, in a note.

But the equities market retraced its move higher after another analyst downgrade hit the financial sector, with President Bush's call for a fiscal stimulus package only intensifying the negative sentiment.

Frankly, the big problem with the usa is these huge suv's and monster trucks using vast amounts of (gas)(american term for petrol) and the fact that they are encouraged to do so, they do not have a very fast rail network which they should have, and should have developed years ago, huge aircraft carriers costing billions to maintain even though I suppose that they are the police force in this insecure world we live in, they also have encouraged people into getting themselves into debt and voila ! here's the end result !

RF .... sorry m8, but your logic is ridiculously narrow ..... i am no economist or analyst or even an accountant, thank goodness, but regardless of the mess the US appears (chose that word intentionally) to be in, it is almost imperative to the wellbeing of the rest of the world that the US economy remains robust and that the peasants keep spending, spending, spending ..... it may well be, and perhaps now just may be the time, though i suspect not, that the wheels really do finally and irrevocably fall off .... and God help us all if that is the case

I think that one thing is almost certain is that when the FED reduce their interest rate then the DOW & the FTSE will see a big bounce. Not sure of the exact date for their review, but certainly worth looking at stocks which are oversold & due for a correction. One problem may be that if they only reduce by a quarter point, then this will disappoint the market, but nevertheless a bounce is likely.

Looks like Gordon Brown is off to China to sell off the UK ! I have started learning Mandarin the Berlitz way, apparently takes 28 days!
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3213566.ece

i am inclined to agree with you Harry ..... Dow just may dip a bit more on Monday to truly test that 12000 level, but a good bounce is certainly due ...... whether or not it can be sustained is much more questionable ..... for myself, i am pleased that though decidedly bloodied and battered, i took some much needed action (should have done it at the first reak in Dow - fathead!) so have a reasonable war chest should i want to risk anything.

not sure whether the markets have already factored in a 0.5% cut by the Fed, and certainly anything less will mean a further slump in the market .... if Fed cuts by more than that, then the reaction could be in either direction, albeit that there will be the usual 10 minute euphoria ..... i believe Tuesday is chalked in as announcement day

FOMC announcement looks to be on wed 30th Jan '08. (According to CNN calender of events).

I believe the fed annoucement is due on 30th also, unless thay surprise the market and make an early intervention, lets hope not it would be seen as panic by the markets. I can only see a 0.5% cut, the fed knows what the reaction to anything less would be, and they have already indicated that they will take strong action to avert a recession in the US. I would think the markets would rally strongly at first, but not for long with the large players moving in to try and off load some holdings. (They should have been offloading 4 or 5 months back.) It's good to see reading these bb that most private investors seem to be in a healthy cash position now.

I will be very carefull re-investing in equilties evenly over the next year in small amount's, so as not to be caught out with timing, and content myself with CFD trading for now.

Well yes Cynic, I hope that the americans and canadians keep on spending, but can they afford to ?, these interest rate cuts are a short term fix for a whole stack of problems.

interest cuts will be a short term fix in US and UK, I would guess and hope that this time they might just get away it. But the cost will be a few years down the line, unless debt and trade deficits in both the US and UK are not brought under control. If interest cuts work for a few years, I will try and take advantage for a few years, before going defensive again.

Rather then being idle for the weekend, I found an historic list of PE and Yields for the FTSE 100, see below.

Year-----PE-----Yield
1994----17.56---3.95
1995----15.26---4.13
1996----15.13---3.97
1997----17.57---3.46
1998----21.32---2.91
1999----27.36---2.32
2000----27.22---2.09
2001----20.89---2.47
2002----19.81---3.08
2003----17.04---3.30
2004----16.10---3.24
2005----14.52---3.19
now----11.00?---4.00?

At the market low point in 1982, before the greatest bull run in history the market PE stood at 8. Using this PE today would give a FTSE 100 bottom of 4920.

The market low in 1998 was 21% from high, which today would mean a low for FTSE 100 of 5324.

In all bear markets since 1964 the average fall was 34%, and lasted an average of 57 weeks, using 34% from 2007 high would give FTSE 100 at 4448.

In the 1973 Bear market the fall was 73% and lasted 136 weeks, the fall today ? Well I would rather not go there.

Hope you find the above interesting, and good luck to all in what will be a very interesting few weeks. On a more cheerful note, Had a nice game of Golf in the sun today, followed by a good cycle ride. Time now for a glass of wine. Cheers.

Taking a battering this morning and the Dow has well broken the 12000 .

When I checked earlier and saw FTSE fall 150 point's, I assumed that volume would be high with some panic selling. But no most companies have had even trading, with a few seeing double buying to selling. SOLA is interesting with double sells to buys, this is becoming more tempting for a short now, not quite there yet.

i have shorted SOLA this morning and very comfortable to have done so.
Dow is indicating a terrifying fall of 500 points, so will be interesting(perhaps a curious choiuce of words unless one is a total masochist) to see how it actually opens tomorrow (closed today)

9/11 didn't cause this much of a fall. If Asia stages anything of a recovery when it opens later, that +500 predicted fall on the DOW will quickly become an awful lot less. IF