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.

twit ... lol!!

Will stocks face another Black Monday?
Stocks to face recession fears, earnings after Dow's Friday slide
By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- History never repeats itself; but it often rhymes, Mark Twain once said. That's also what many traders and market watchers were left to ponder as the Dow industrials slid more than 360 points on Friday, which marked the 20th anniversary of Black Monday.
On Monday, Oct. 19, 1987, the Dow Jones Industrial Average slid some 508 points, in a broad movement of panic selling which also came on the heels of a big sell-off the preceding Friday.
For believers in cosmic coincidences, this Friday's action might seem foreboding.
"It's a question of market psychology," said Alexander Paris, analyst at Barrington Research. "But are we going to have another Black Monday next week? If I had to make a guess, I'd say probably not," he said.
"Friday's action was not a one-day event, it was something at work the whole week, with worries about the economy, then banks warning on earnings, followed by warnings from the industrials."
Also raising anxiety among investors, the dollar hit new lows against the euro while oil surged to a record $90 a barrel.
While cool-headed Wall Street analysts remain unconvinced that a repeat of 1987 is in the cards -- at least on Monday -- they readily admit that the right conditions might still be in place.
"Can it happen again? Yes," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "Do I think it will happen again on Monday? No. We can have a couple of days when we lose 2% without a major crash."
On Friday, the Dow saw its losses accelerate in afternoon trade before finishing down 366 points, or 2.6%, at 13,522. The pain was just as bad in the broader market, with the S&P 500 index losing 2.6% and the tech-heavy Nasdaq Composite down 2.7%. For the week, the Dow lost 4.1%, the S&P fell 3.9% and the Nasdaq slumped 2.9%.
But as ugly as the day's performance was, it still paled in comparison with the Dow's 4.6% point drop on the Friday preceding Black Monday. And that day's 508 point-drop represented a 22% plunge for a Dow that hovered above 2,000 back then.
"It's ironic we're down on the day of the crash of 20 years ago, but putting it in perspective, we would have had to have a 3,000-point sell-off today" to match the drop of two decades ago, said Art Hogan, chief market strategist at Jefferies & Co.
Industrials warnings
The day's troubles began when several industrial stocks -- especially Dow components Caterpillar Inc. (CAT:Caterpillar Inc
Last: 73.57-4.09-5.2
CAT 73.57, -4.09, -5.3%) and Honeywell Inc. (HON:honeywell intl inc com
Last: 58.32-2.37-3.91%:HON 58.32, -2.37, -3.9%) -- warned that U.S. economic woes would likely cut into future earnings. Caterpillar chief financial officer Dave Burritt told the Reuters news agency he sees a 50% chance of a U.S. recession.
Following this summer's credit crisis and worries about the housing market's drag on the U.S. economy, Wall Street went into the third-quarter reporting season hoping that global growth would lift the earnings of major multinationals.
But with the industrials' warnings Friday, the market had nowhere else to turn to.
The market had already lost the key leadership of financial stocks, which this week revealed the hefty drag of this summer's credit crisis on their earnings. Citigroup Inc. (C:Citigroup,
SpC 42.36, -1.47, -3.3%) , JP Morgan Chase (JPM:JPMorgan Chase &
JPM 45.02, -0.88, -1.9%) , Bank of America (BAC:bank of america corporation com
BAC 47.57, -1.28, -2.6%) and many regional banks took hits from bad loans this quarter and warned of more to come.
The market had also lost the support of major oil refiners and oil services companies, which are suffering from the rising cost of crude oil.
With the industrials out, "three legs of this four-legged stools have been knocked out, leaving only technology," said Windham's Mendelsohn. "It doesn't mean we've got a disaster coming. But it does mean we can't go up until something changes."

The last time the FTSE100 reached the heady heights of 2006 was in 2000.
The chart below shows what happened then. It took the best part of 3 years before it finally hit rock bottom.
From this, you may well deduce that the present downturn could well be the start of something that will last a while yet.
My own feeling is that the FTSE100 won't begin to recover again until it has first breached 4800 - sometime next year.

you might care to look at the thread i have started re indices

Greenspan says credit crisis was 'accident waiting to happen' UPDATE - AFX
(adds comments about current account deficit, debt levels and protectionism)

WASHINGTON (Thomson Financial) - The financial turmoil that erupted in August was 'an accident waiting to happen,' and would have taken place in some other sector of the market if it were not started by changing views about the subprime mortgage loans, former Federal Reserve board chairman Alan Greenspan said.

'Credit spreads across all global asset classes had become compressed to clearly unsustainable levels,' Greenspan told an audience at the World Bank's International Finance Corporation.

'Something had to give. If the crisis had not been triggered by a mispricing of securitized US subprime mortgages, it would have eventually erupted in some other sector of our market,' the former Fed chief said.

Greenspan defended his decision to lower the key federal funds rate to 1 pct and said the housing bubble was not caused by the US central bank.

'Central banks around the world have essentially lost control over the markets beyond three or four or five years out,' Greenspan said, noting that the long-term interest rates did not rise as the federal funds rate was increased, starting in 2004.

US housing is primarily financed with mortgages based on 30-year interest rates.

Greenspan said proof of his argument is that housing bubbles emerged in nations throughout the globe, where the Fed does not control interest rates.

He asked, rhetorically: 'If indeed, it is short-term interest rates that created the bubble in the US,' then what created the bubble in Europe, Australia and other parts of the world?

The octogenarian also said policymakers should focus on 'the level of debt and not the source of its financing', which too often garners excess attention.

While he said there is an 'inevitable' adjustment coming in the US current account deficit, he believes it is 'not a huge problem.'

Rather, Greenspan said that an increase in protectionist sentiment and irresponsible fiscal policy pose more of a problem to the real economy, which could be 'quite painful' for the US and its trading partners.

corbett.daly@thomson.com

"On Friday, when Countrywide Financial reports its third quarter earnings, Wall Street and economists will get their best look yet at just how bad ...... Its report, which could have important ramifications for the nation's financial sector, will offer a window on the depths of the real estate and home-building downturn ...... Analysts surveyed by earnings tracker First Call forecast that the company will report a loss of $1.26 a share - a dramatic turn from the $1.03 per share profit it made a year earlier. Loss estimates range as high as $3.47 a share."

this could prove very nasty indeed ...... i shall be travelling too much until next week to keep a constant watch, so am exceedingly unlikely to take a postion in the indices, though i think for trhe nimble, there will be some good pickings ...... in both directions, as gyrations are likely to be pretty wild

merrill writedown , 7.9 billion , numbers which are hard to get your head round

Sell out today before the drop which is due very soon

comment on house sales:

"It's not surprising that sales were weak, what is becoming more of a realization is with such high inventory levels, the highest since 1998, that prices are going down, and lower prices are going to effect everything; that is the next leg," said Peter Boockvar, equity strategist at Miller Tabek.

Thanks to Kyoto on the Traders board for posting this link:

http://observer.guardian.co.uk/business/story/0,,2200423,00.html

Even in the future it may well be worth your interests looking back and reading that link again before making your investment decisions, I certainly will.

i alaso question whether or not Fed really will cut rates again this week ...... to my mind, it would give out all the wrong signals and certainly fuel future inflation

Seems to be a lot of expectation that they will. The big gains on oil, gold, and mining seem to reflect this along with some highly leveraged long positions that could be difficult to unwind if rates stay the same. Wednesday/Thursday will be volatile days.Personally I hope they do reflected in a few shorts I have perhaps foolhardedly put on

As quoted by Tom Hougaard from City Index today:

"The way I interpret the market action is that Wall Street are leaning heavily on another cut by at least 25 basis points. If the market doesn't get it, we will see a spectacular sell-off. If it does get 50 basis points, as some analysts expect, we should see new all time highs for the Dow over the coming month."

Tricky call now. Do I lock in all profit just in case there is a sell off, but if the Fed do drop rates then I will have sold for nothing & will miss the surge! Any thoughts?

One option might be to go long and short of the dow just before the announcement with tight guaranteed stop losses, that way if it took off, one would make a heap, the other a small loss.

Is that what they call a 'hedge' ? ;-) Maybe a new analogy - One in the hand and one in the bush !

i do not ask what you are doing with your hands, but a short of either Dow or FTSE to protect your long portfolio at least in part is not a bad strategy

Is that the 'Burning Bush' ? If so might sell everything!
Any other kind of bush & will be content to hold. :o)

I was really trying to guage opinions on whether Fed rate would change or not.
It would seem that half a point down would see the DOW & FTSE reach unprecedented highs. Assuming we are going to see yet more fallout from the sub-prime fiasco in the coming months, this could be my only opportunity to feather my nest (as opposed to my bush).

it seems to me that the markets are already anticipating an awful lot of good news -too much in my opinion.

Morning Mr C. Can appreciate the sentiments. thanks.

Morning Harry, I believe that there are still a lot of people out there wanting to burn the 'George W' variety.

As Mr C says, there seems to be a bit too much anticipation of good news and not enough downside planning. Make hay while the sun shines.... but keep your waterpoofs ready.