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

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

really? what was fall 9/11?

A possible scenerio for tomorrow could be an emergency cut from the FED before the DOW opens, if this happens it would be a totally different picture.(short term) They must be very concerned with falls in Europe and Asia, they might even take drastic action and go for more than .500bhp.

Wouldn't be surprised if this happened, so be careful going short.

SOLA short is partly insurance and partly because i think SOLA is a rubbish company .... i don't trust the chinese!

Apologies, that comment re the 9/11 fall was incorrect. The DOW fell 684 points when it re-opened following 4 days of closure. Not sure what the FTSE fall was, but certainly less than today and in any event recovered quite smartly intraday.

not today it didn't ... started to and then collapsed again ..... down 350+ by close i think

i would like to think (fondly imagine!) that F/E will stage some sort of recovery overnight, or at worst not collapse further ..... US opening and then ultimate close is anyone's guess

Here we are in January and this happens, don't forget we have the sell in May and go away to look forward to; ( hurray...turning into aaghhhh ! )

FTSE indicating to open in a couple of minutes -185

City Index showing Wall St (Dow) at 11426 just now, this will put it well below key 12000 level see http://www.signalwatch.com//markets/markets-dow.asp if interested, also Nikkei off 728 to 12597 and Hang Semg 1914 to 21904, a bad day for ftse too , I am wondering if interest rate cut of any size will bring in buyers/slow the falls, too many "known unknowns " in the bad debts scene just yet.

Just checked trades and there seems to be some bottom fishing at the moment, with most companies showing positive buys to sells. I tried to buy shares earlier on a spike down, and it wasn't executed, maybe due volumes.

We all badly need this to stop now, I for one if this drops any more will be forced into serious selling !

RF-----------It's times like this when pi's get very nervous, but the important thing is not to panic or be a forced seller. Many of us have been through these periods before and recognise that this is the sort of time to be buying. So many of us have seen great dollops of net worth disappear (on paper) in a short space of time, me included, but use these opportunities to actually invest, not punt in the next big idea. Get the foundations right and build a solid pyramid with the top of that pyramid used for punting. Don't panic.
2517

Thanks 2517GEORGE, I'll hang in there...

but don't hang youself please, though confess that is less messy than blowing your brains out!

It's all the people on margin that will now suffer ,,if you hold the shares you can ride it out ,could be in for a long ride though.