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FTSE + FTSE 250 - consider trading (FTSE)     

cynic - 20 Oct 2007 12:12

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

cynic - 20 Oct 2007 12:20 - 3 of 15283

FTSE 250
have never traded this myself, but note that (black) 200 dma ihas already failed significantly and (red) 25 dma or more important (green) 50 dma could certainly be challenged on Monday 22/10







maddoctor - 20 Oct 2007 12:41 - 4 of 15283

ref post 1315 of the dubious selloff thread , looks like an elliot wave expanding flat correction on the dow to me , so can expect dow to stop a few hundred points below 12500

cynic - 20 Oct 2007 12:45 - 5 of 15283

don't know what elliott wave is but will post DOW and S&P charts here later.
meanwhile, have checked back at my archives of sophisticated charts and note that with Dow having peaked at +/-14250, the correction, assuming no very speedy recovery, could easily take it back to 12000, though obviously not without intervening rallies

cynic - 20 Oct 2007 13:38 - 6 of 15283

DOW
25 dma now demolished and 50 dma now under pressure unless Monday brings a quick reversal...... assuming not, 200 dma next line of defense at +/-13180




cynic - 20 Oct 2007 13:43 - 7 of 15283

S&P
25 dma now destroyed and 200 dma (and 50 dma) now under pressure ...... weakness on Monday could bring a further significant tumble





cynic - 20 Oct 2007 13:46 - 8 of 15283

NASDAQ
Rather to my surprise at least, this looks to be the healthiest of the US index charts ...... 25 dma now being challenged, but both 50 and 200 dma both very much intact







maddoctor - 20 Oct 2007 14:29 - 9 of 15283

cynic , Elliot Wave , is the BEST "Hindsight" method of trading ever invented!.

cynic - 20 Oct 2007 16:27 - 10 of 15283

so enlighten us all please!

maddoctor - 20 Oct 2007 18:34 - 11 of 15283

go to elliotwave.com , everything you NEVER NEEDED to know!

Harry Peterson - 21 Oct 2007 08:05 - 12 of 15283


cynic, a good resource and explanation of the Elliott Wave can be found  here


You may also like to take a look at the reference to the  'efficient market hypothesis'  (see here)  which states that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck.


An explanation  here  relates to the  'Random Walk hypothesis'  which claims stock prices are completely random because of the efficiency of the market and therefore cannot be predicted.



Falcothou - 21 Oct 2007 09:47 - 13 of 15283

Good thread Cynic, FTSE 250 does tend to have a much wider spread, 60 points round trip as opposed to 2 on FTSE in trading hours which can eat into profits, though obviously it has a different exposure

Harry Peterson - 21 Oct 2007 10:16 - 14 of 15283

Falcothou, present price of FTSE 100 (ISF) is 655.75 - 656.25 whilst FTSE 250 (MIDD) is 1117.5 - 1121.5

................or are you referring to spreadbetting??

cynic - 21 Oct 2007 16:23 - 15 of 15283

all relating to CFD trading ..... FTSE has a spread of 2/4 points depending on whether open or not and Dow 4/6 ..... FTSE 250 has a spread of 50 points but unlike the main indices, is not tradable ouit of hours

Falcothou - 21 Oct 2007 17:58 - 16 of 15283

Hi Harry, I only refer to the spreadbetting platform that I have used to trade the 250 in the past but came to the conclusion that it was more cost effective to trade the 100 instead of the 250 and just double the gearing to get a similar result without getting clobbered for as much commision. I do not know whether CFDS have a tighter spread on the 250

cynic - 21 Oct 2007 23:24 - 17 of 15283

FTSE currently indicating to open at 6440 = -80 on friday's close = implies financials in particular likely to be hammered again and also FTSE 250

cynic - 24 Oct 2007 09:35 - 18 of 15283

watch the charts in general for guidance ...... indications this morning are that Dow will open sharply down, which once more will put 50 dma under pressure ...... if Countrywide frightens the market at all on Friday with Q3 results (see Dubious Sell-off), then a very big fall is more than likely ...... a reasonable strategy may be to go short wirth a guaranteed stop

cynic - 24 Oct 2007 22:06 - 19 of 15283

after today's topsy turvy trading, s&p giving very contradictory signal from both Dow and Nasdaq .... make of that what you will

Falcothou - 25 Oct 2007 08:06 - 20 of 15283

Dow swinging like a Surrey suburb

cynic - 30 Oct 2007 21:03 - 21 of 15283

NASDAQ continues to indicate north while all others are now looking south ...... as posted elsewhere, i am currently short of DOW as i think the markets are way way ahead of themselves and further, cannot see Fed reducing rates by more than 0.25%, and just possibly will not even do that ..... one way or another, after the news, or maybe even before it, expect a sell-off ..... DOW currently down about 80 this evening.

conversely, i shall almost certainly go SHORT on cable - i.e. :$ - as upper target of 20700 has been hit all bar a tiny fraction .... if Fed rates not lowered by more than 0.25% with (probable) indication of no more likely in the near future, then expect $ to rally sharply

cynic - 01 Nov 2007 13:17 - 22 of 15283

certainly not to my surprise, Dow is looking very soggy to open - currently indicating down 135 - so my short there is now comfortably in the money again.

on the other hand, $ remains exceptionally weak at 20830 ..... i confess that i thought it would strengthen very sharply from this level (see above) and with no further Fed cuts looking imminent, this may shortly prove to be the case
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