The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

i was a bull a couple of months ago and remain one now. pe's are good to reasonable, companies still pronounces best ever profits and we have digital and the olympics on the way. Dont let a few people selling shares to disappear for the summer put you off.

Bull, target 7000+.
Property imo looks bleak because.
1.Must have everything now pay later debt culture.
2.Banks have relaxed the rules on lending (eg) 9 times your salary,120% mortgage, intrest only, and so on.
3.Intrest rates on the up.
4.Almost everybody is a property expert,( when the shoeshine boy is telling you what shares to buy its time to get out ) sort of thing.
Not good imo.
Neil

Some of the same should also affect equities. Higher interest rates mean higher borrowing costs, less investment, less spending and so lower earnings. It'll be interesting to see if that's reflected in the next round of company results or not.

In my opinion....

Strawbs.

nice finish to the dow...
just read this...

Periods of stock market weakness create buying opportunities
Market Commentary
advertisement
Kewill Ludens - TheShareWeekly.co.uk
June 08 2007
Investing in shares is a game of snakes and ladders. In bull markets shares grind steadily up the ladder; then, out of the blue, comes a bout of profit taking and prices tumble down a snake.
The mood in these periods of weakness can feel very bearish indeed. Most times though it is a storm in a teacup, selling dries up, buyers return and share prices are soon heading higher again.
The odds are excellent that the latest bout of weakness is just such a hiccup in the rising trend. It may become worse before it becomes better but investors who take a positive approach are likely to do well.
Sharp weakness is often followed by strong rises
As I write the weakness is marked. In four days the FTSE 250 Mid Caps index has lost nearly 600 points and it is down over five per cent on its peak of 12,282.2 reached as recently as 21 May.
Unfortunately I cannot give you any guidance on whether it is going to fall further or not. Your guess is as good as mine.
What I can tell you is that stock markets need these periods of weakness to remain in healthy uptrend and that periods of sharp weakness are characteristic of continuing bull markets..

alot of my companies are at or near rock bottom prices so whats all this talk of bull market?
few examples: AFN,BSP,THUS,NTX,BLL,RETV,EIC,GWP,WTV,LNG,SBT...i must be a jynx

you must be mate, im in KMR, lead, ng.(down at the mo) cch, I am down in a few but long term i am convinced they will be in profit ie cyh, iqe, azm and acc. Good luck.

ps one of the most important bits of advice someone gave me was when they said ''can you expalin why you have shares in that company?''

Not often the analysts are this succinct, so I thought this might be worth bringing to your attention. Of course this is very short term & not helpful for the bigger picture:

Tom Hougaard from City Index :It is likely to be a very volatile week, but I personally feel that the 157 points on Friday was a concerted effort by Wall Street to soak up the supply ahead of the option expiration next week. Otherwise it would potentially have been an extremely bloody week if all the puts explode in their faces. The disaster option futures expiration has been averted and I suspect we will have a choppy week with very nervous traders.

We got 125 billion worth of IPO money coming into the market and I suspect that we will see a bullish tone for today (monday), and then a retest of the lows later this week."

Quite an interesting article from the Times
A DIY kit to show why equities wont crash
Agenda
John Waples, Business Editor
THE chief European equities strategist for Morgan Stanley, Teun Draaisma, looked pretty smart last week. No sooner had he published research showing that equity markets were overheating, than Europes Dow Jones Stoxx 600 index started a five-day rout. And this was mirrored by corrections in emerging markets.

Draaismas timing was spot on. However, his prediction that European indexes could fall by 14% over the next six months needs closer examination. My own view is that he is likely to be wrong.

Most other investment banks are confident that the corrections seen in equity markets last week will be sufficient they were caused principally by fears over inflation and interest rates implicit in rising bond yields.

To help you judge for yourself whether world equity markets are overcooked, heres a doit-yourself guide drawn from a number of investment banks.

One of the best indicators is the VIX index otherwise known as Wall Streets fear gauge which measures investor concern about stock-market risk. It tracks the cost of institutions insuring their share portfolios in the options market and tends to range between 10 and 20 during bull markets. The higher the number, the greater the concern about a sharp fall. At the moment its about 16 insufficient to trigger alarm but worth keeping an eye on.

The next indicator is corporate credit spreads. The tighter they are, the more nervous we should be that lenders are no longer pricing in risk. And on this point there should be concern. Spreads are tight and there are rumours of reckless lending.

Then there is currency volatility, which can pick up if economic prospects get rapidly reassessed. At the moment despite concerns about the yen carry trade volatility is at a 10-year low.

One additional panic button is swap spreads, which could rise if financial institutions become concerned about the risk of doing large volumes of business with each other during a financial crisis, such as the Russian default and collapse of Long-Term Capital Management in the summer of 1998.

The last two indicators monitor the performance of cyclical and defensive sectors. If investors are piling into food and drink, tobacco, utilities, healthcare and telecoms, your antennae should prick up. Similarly a move into industrials, retail, technology or basic materials suggests there is confidence that the economic outlook is improving.

The final indicator is strong performance by whatever are the hot stories of the day. During the dotcom boom it was the telecoms, media and technology sectors. Now it is energy, natural resources and emerging markets. All of these sectors have generated strong returns over recent years, but valuations are not out of control.

Outside these indicators, the best measurement is sentiment, and this remains high. Chief executives are confident, global liquidity is at an all-time high and with at least four FTSE 100 companies on bid alert (Cadbury, InterContinental, Scottish & Newcastle and Hammerson) it would be wrong to say this is the top of the market. Markets may tread water and flotations may be put on hold, but if markets did fall 10% there would be a tidal wave of corporate activity.

Dodgy investors

THERE is something deeply uncomfortable about Efficient Capital Structures, the fledgling activist shareholder, calling for Vodafone to refinance its balance sheet and return 38 billion to shareholders.

It is one of four resolutions that Efficient is putting to the vote at the mobile-phone groups annual meeting. It is not that Efficients financial-engineering proposals are unreasonable (although they will fail), it is the way it has gone about them. Efficient owns only 200,000 shares worth 318,000, yet has managed to get an 85 billion company jumping around like a cat on a hot tin roof. Efficients motive is to drive up Vodafones share price and cash in on a series of derivative contracts it has bought. If the price exceeds 220p (against todays price of 160p), the team behind the activist investor could collect more than 5m for a minimal outlay.

The regulator needs to look closely at whether activists are abusing their shareholder rights. Efficient is not a one-off. Several big companies are being stalked at the moment and this will become an issue.

BAEs dream

BY deciding to appoint an external panel to investigate its conduct in foreign arms deals, BAE Systems has taken a leaf out of BPs book. The oil and gas group asked James Baker, Americas former secretary of state, to poke around its innards in the wake of the fatal Texas City refinery explosion, and his report made uncomfortable reading for the BP board.

BAEs directors, led by chairman Dick Olver (perhaps its no coincidence that he is a former deputy chief executive of BP) will hope their version of the Baker report is not so damning. BAE has been accused of running a slush fund in connection with the long-running 43 billion Al-Yamamah contracts to sell arms to Saudi Arabia, a fund allegedly used to pay off Saudi officials.

What Olver and his fellow directors really want and what they fervently hope an independent panel might help towards is for a line to be drawn under the affair. If the ghosts of Al-Yamamah can finally be laid to rest, BAEs path in America, the worlds biggest defence market, will become a lot smoother and perhaps lead to the transatlantic mega-merger the company covets.

john.waples@sunday-times.co.uk

maestro .... not surprising you have been so quiet of late then

I dont think many institutions will take much notice of Efficient Capital Structures. Correct me if wrong but this is one that John Mayo (of Marconi fame) is involved in. Personally,I would keep well clear of any advice from his quarter.

May be they are worried he will do to Vodafone what he did to Marconi!

Yet another 300 point correction on the DOW tonight, following an equally severe correction of the FTSE today.
Is this inevitable as the indexes push new highs, or the start of the prophecies of doom? One thing that always amazes me is that the topic of 'Sub prime lending' seems to rear it's head every time the market falls. Markets rise & no one gives a damn. Markets fall & it's sub prime lending to blame. Surely, if these loans are as risky as stated, the lenders should build in a bad debt provision, or am I over simplyfing?
Any thoughts on a bounce? Be good to see the losses today made good tomorrow!

markets may bounce as rises and falls of this magnitude are almost always an over-reaction .... however, there will assuredly be many forced and computer programmed sales, so to expect the markets to recover even their equilibrium today, is really hoping for too much

Credit crunch coming affecting margined hedge funds and private equity IMO.

Pain must continue further and deeper. ;-)))

FTSE fighting back, Traders remorse? hope it holds though!

Another lurch in to the abyss!
I think you are right, Al. The credit squeeze is starting to have an effect.

AFX today:

"Still, market volatility is high and credit concerns are running deep, so it's unclear if any of the day's news will allay investors' fears of a major correction. Another factor that could weigh on the stock market Monday is China's decision to tighten its credit again to rein in the country's excess cash by ordering banks to hike their reserves."

IMO, it's just a matter of when, not if to a big market correction.
Many people on these boards seem to be converting their stocks to cash & I confess I have started to do that too.

my chart guru reckons that if Dow breaks down through 13255, which is pretty much where it now sits, then 12000 becomes the downside target, though of course there would be upward spikes en route

Tend to agree with Harry... instead of "go away in May" it's been "go away in July" think this sub-prime business may run deeper or rather wider.

It all just confirms my sentiment of the last six months.

I think all these sharp corrections are the ripples of a much larger event waiting somewhere over the horizon. I'm not sure what it is, or even when it'll arrive, but I'm pretty sure it's coming. Everything up until now has been pretty much "predictable", meaning those that can, have been ready to short when oppertunity comes. The "crash" event will be unforseen though, probably something linked to credit (debt) in some way, but not necessarily obvious. With each of these ripples, investor sentiment is slowly erroded away, and with it market support. When the support has gone, even the smallest events can cause a crash. In my opinion......

Strawbs.