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

i have just taken a look at the 15 minute chart for Dow last night ...... quite extraordinary ...... for example, at around 14.30, Dow plummeted from about 8150 to its low point of 7870 but by about 15.00 had rocketed to 8662 ..... then at around 20.30 Dow was at 8829, its high of the day, but fell 500 points by the close 30 minutes later.

Well....during the course of the next year I'm going to adapt a new strategy....bit by bit stocks being reduced to a handful....and 1 short or 1 long and selling without hesitation.....will take some time to implement this plan as need a recovery in my stocks first....but this is going to be my new longterm way of proceeding....the wide spread of stocks like I have at the moment is no good in these turbulent times !.

cynic that's the time I was caught up in it--like being in a washing machine! thanks for the advice I will sort it out next week. I have indeed pressed the wrong button before to my cost but this time I was very careful to press sell as I expected it to plummet and thought I was being very clever! If I only owe them a fiver I shall consider myself very lucky and perhaps their computers couldn't cope with the chaos. I wouldn't recommend fin though and I'll stick with buy and hold in future.

Article dated April 14th this year...


http://money.uk.msn.com/investing/articles/morecommentary/article.aspx?cp-documentid=8061784

remember reading at the time and reminding myself to short the FTSE, i actually did at 6200 and got stopped out, never bothered since...!
interesting though - the reference to PE's in the 250, i really do think there is an abundance of absolute bargains out there, i have been buying last couple of days, just need a couple million Woolworths now...!

Britain will launch its biggest retail bank rescue on Monday when the four largest, HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays, ask for a combined 35 billion pound lifeline, the Sunday Times reported.

there is a much more in the report on Reuters and it does not make comfortable reading

i would guess that the impact of the above will be to knock FTSE by say 200-250 points, but that will really be just a reflection of the banks' dilution and just may not hit other shares nearly so heavily

The Telegraph was reporting banking shares maybe suspended tomorrow, and the IMF have been saying the world is on the verge of "systemic financial meltdown". Funny, you never get fireman running into a burning building saying "wow this place is really ablaze. If you don't have a protective suit like mine your gonna die."

Don't these idiots get it? The best way to create panic is to stop people getting their money and talking up the situation with ever worsening warnings. As someone said last week, you can run an insolvent bank without a problem, but you can't run it when everyone knows. I think the entire financial system is getting to that point!

In my (we're doomed, all doomed) opinion.

Strawbs

have just read the Reuters article and I see it as good news since at least these banks will not go belly up this weeK. Will you lot STOP predicting the end of the world , you and the world bank/IMF are only making things worse

i am certainly not predicting the end of the world ..... i would also concur that on balance it is good news that the gov't (you and me and the other taxpayers) will end up as forced owners of large slabs of the banks - but don't think "you" will ever see a penny back, even though the gov't will no doubt rake back many millions in the course of time.

that said, i have little doubt that the market(s) will fall tomorrow, and maybe for the rest of the week, as the impact of the above and forced unwinding in lehman's and similar positions.

www.netcastdaily.com/broadcast/fsn2008-1011-2.mp3

listen to above link.......its scary.

ok, it talks about usa corruption......but uk has lot of corruption too esp in last decade with this globalisation.

guy says it will take MINIMUM OF 40 YEARS TO IMPROVE.
he says it will be WORSE THAN 1929 DEPRESSION.........AND THAT WORLD WAR 2 WAS REQUIRED TO IMPROVE THAT.

also naked short selling was bringing down the system similar to now like 1929......and that traders dont trus each other similar to inter-bank lending which is non-existent right now as there is NO money market.

WE NEED A MAJOR WAR RIGHT NOW!!!!

Cant see this turning until, we start to get some positive stuff in the news, however the bottom will already have passed by then, if its gonna take a 1000 point down day on the Dow then i can see it being soon, poss tomorrow??? whichever way you look at it, this is surely a fantastic time to buy into the right companies, if you are going to hold for medium/long term...
I fully believe the best indicator at the moment isn't VIX, RSI, MACD etc, its the headlines, everyone is so negative that the bottom is nigh...

I think its also to point out that you can get carried away reading these posts/news/bulletins etc constantly predicting doom - i'm not for one moment suggesting this is in everyone's imagination, but if you actually go outside, the world is still functioning, i'm completing on a house sale this week, and locally the shops were teaming this weekend, likewise just been to have tea at the pub up the road and had to queue to order and wait, it was packed...

There are going to be incredible ups and downs in the ftse coming....I can sense that !...

you are right Ted that so much of this "recession" has been fuelled by scare stories ..... of course, once peeps stop spending, then recesssion of some degree is self-fulfilling .... that said, there are an awful lot of businesses worldwide (China!) that have folded, and if the Baltic Index is anything to go by, then relative gloom and doom is imminent .... however, i keep very close tabs on what is happening in Saudi where a major client of ours has huge export biz .... at the moment, there is no indication of that going sour, though we keep a very close watch and contact.

With volatility up by factor of 5 may well be worth reducing leverage by factor of 5. 1 point is quite an exposure when dow can move 800 points in half an hour. s@p spreadbets are significantly lower in exposure. Many advise not risking 1.5% on a trade so 1 on S@p equates to approximately 100 per 1000 point dow move tolerable risk if holding overnight. Be careful out there as they used to say in Hill St Blues!

With volatility up by factor of 5 may well be worth reducing leverage by factor of 5. 1 point is quite an exposure when dow can move 800 points in half an hour. s@p spreadbets are significantly lower in exposure. Many advise not risking 1.5% on a trade so 1 on S@p equates to approximately 100 per 1000 point dow move tolerable risk if holding overnight. Be careful out there as they used to say in Hill St Blues!

cynic
please be careful with your saudi contact/ barometer.
many barometers are lagging. hope it wont be so with yours.
6 months would be my guess and bottom falls out overnight.
total surprise and collapse.
please do take such a possible scenario into consideration in your business/cash flow plans etc.
im sure you have already considered this so apologies. sometimes reminders from
those that know nothing help keep us focused.
kindest regards
jkd

+250 start at least but I guess the acid test is whether it can hold. If it does then maybe we can see the start of new trading patterns. If it doesn't then I dread to think!

thanks jkd, your concern appreciated and we do indeed monitor very carefully .... though you may well be right about the time lag, this particular saudi client is exporting primarily (i think) into f/e so there is a double indicator.

we are also keeping an eye on our indian biz to see how or even if that is being affected ..... so far, not

I think many will tough things out until the bitter end, so it wouldn't surprise me to see a sudden sharpening of the downturn next year. Christmas will be a good indicator of the state of peoples finances. I know several people planning to cut back on food and restrict gifts just to children this year.

As for the current rally in equities I think I'll wait and see. If the volume is good and it holds up for several days then it might be a bottom. Somehow I think it's just a relief/oversold rally though and will turn around again before too long.

In my opinion.

Strawbs.