Ftse Down Over 2%

[interestrateripoff]

Everything is up - FTSE, Dow, oil, shiny stuff...

Doesn't make sense to me?

Take some drugs and see if it makes sense then.

It seems to work for the City types.

[Pent Up]

Everything is up - FTSE, Dow, oil, shiny stuff...

Doesn't make sense to me?

Shiny stuff? Down 2%

[200p]

We live and learn.

Theres talk of the VIX, a volatility indicator of the S&P500 http://en.wikipedia.org/wiki/VIX . I think this is worth a look and maybe a good tool to tell you when to be out of the market (in cash).

http://bigcharts.marketwatch.com/charts/big.chart?nosettings=1&symb=vix&uf=0&type=2&size=2&sid=1704273&style=320&freq=2&time=11&rand=1174886462&compidx=aaaaa%3a0&ma=0&maval=30&lf=1&lf2=2&lf3=0&height=444&width=579&mocktick=1

VIX

http://bigcharts.marketwatch.com/charts/big.chart?nosettings=1&symb=vix&uf=0&type=2&size=2&sid=1704273&style=320&freq=2&time=11&rand=645924408&compidx=SP500&ma=0&maval=30&lf=1&lf2=2&lf3=0&height=444&width=579&mocktick=1

VIX with S&P500

It looks like stocks head down when ever the indicator is above 30.

I'v found an article with an application to VIX http://www.tradingmarkets.com/.site/stocks/commentary/editorial/TradingMarkets-10-Trading-Rules-5---Use-the-VIX--I-78752.cfm

Edited August 11, 2011 by Money Spinner

[Monkey]

personally i think it will bobble between 10,000 and 10,500 (after a drop tomorrow) for a couple of weeks. then plunge again 1000 points in 5 trading days

well i was wrong.

500 point rise tomorrow?

[libspero]

well i was wrong.

500 point rise tomorrow?

Dow was on fire again today so it could well be..

[FreeTrader]

Release from the AMF (French market regulator):

Decision by the AMF Chairman pursuant to Article L. 421-16 II of the Monetary and Financial Code: Ban on

taking net short positions in French securities of the financial sector (as listed hereunder)

The Chairman of the Autorité des marchés financiers (AMF), acting in accordance with Article L. 421-16 II

of the Monetary and Financial Code, has decided to place a ban on creating any net short position or

increasing any existing net short position, including intraday, by any person established or residing in

France or in another country, in the equity shares or securities giving access to the capital of the following

credit institutions and insurance companies:

- April Group

- Axa

- BNP Paribas

- CIC

- CNP Assurances

- Crédit Agricole

- Euler Hermès

- Natixis

- Paris Ré

- Scor

- Société Générale

This decision shall enter into force as soon as it is published on this AMF website as from 22.45 today and

shall remain in effect for a period of fifteen days. It may be extended beyond that date pursuant to the

conditions provided in the aforementioned Article L. 421-16 II.

http://www.amf-france.org/documents/general/10109_1.pdf

[FreeTrader]

Belgium, Italy and Spain also imposing short-selling bans from tomorrow according to the European Securities and Markets Authority.

http://www.esma.europa.eu/popup2.php?id=7699

[exiges]

Belgium, Italy and Spain also imposing short-selling bans from tomorrow according to the European Securities and Markets Authority.

http://www.esma.europa.eu/popup2.php?id=7699

Running scared ?

[newbie]

Running scared ?

ZeroHedge.com suggests it'll scare the markets.

[FreeTrader]

ZeroHedge.com suggests it'll scare the markets.

Yep. Fin Times also highlighting the dangers:

‘Knee-jerk’ short selling ban raises fears

Plans to ban all short selling of financial stocks in four European Union countries but not in the rest of the 27-nation bloc will sow confusion and may well fail to halt the recent downward slide in bank share prices, investors and academics warned last night.

...

Some investors warned that the bans could lead to unexpected results.

“The EU policymakers don’t seem to understand the law of unintended consequences,” said Jim Chanos, a fund manager well known for his short positions. “The vast majority of short selling (and purchases of credit default swaps) in financial shares is by other financial institutions hedging their counterparty risks, not speculators. The interbank lending market froze up completely in October-December 2008, after the September 2008 short selling bans.”

Another investor warned that the move could “destroy parallel markets, the market for convertible bonds will just collapse”. He added that short sellers were often buyers of new bank stocks issued to raise funds by struggling institutions.

“If you prevent those people being short, sure it’s going to boost the share price for a couple of days, but those guys won’t be around to buy your stock in a capital increase,” he said.

[mfp123]

banning short selling can make things worse and can actually increase volatility.

large fund investors tend to prefer not to exit their holdings because they are supposed to be investing other peoples money (which is what theyre getting paid for).

they dont want to hold cash - they dont get paid for holding cash, so they do something that is equivalent to it or effectively be "neutral" which is to short shares to cover their positions in case things go bad.

if you stop funds from shorting they will be forced to sell out of shares which creates more volatility.

Edited August 12, 2011 by mfp123

[Kurt Barlow]

Another day of gains.

[libspero]

Another day of gains.

Yep.. but bounce or sustained growth?

I'm about 50:50 at the moment. On one hand the fundamentals haven't improved much.. the European issues haven't gone away.. the banks aren't any less exposed.

We might escape with a global slowdown in the second half instead of a further dip.. or we might not.

On the other hand, this little blip has ensured the undivided attention of global central bankers.

I'm staying optimistic, but keeping the popcorn handy

[The Masked Tulip]

Yep.. but bounce or sustained growth?

I'm about 50:50 at the moment. On one hand the fundamentals haven't improved much.. the European issues haven't gone away.. the banks aren't any less exposed.

We might escape with a global slowdown in the second half instead of a further dip.. or we might not.

On the other hand, this little blip has ensured the undivided attention of global central bankers.

I'm staying optimistic, but keeping the popcorn handy

IMPO it will only take one bit of bad news to send markets plunging again. The job figures were not that brill in the US but the traders clung on to it for dear life.

If you are brave enough to trade daily you can make some money in this market... but you can also lose also... all depends on your skill, timing or luck. Do you get an up day or a down day?

[northwestsmith2]

Release from the AMF (French market regulator):

Decision by the AMF Chairman pursuant to Article L. 421-16 II of the Monetary and Financial Code: Ban on

taking net short positions in French securities of the financial sector (as listed hereunder)

http://www.amf-france.org/documents/general/10109_1.pdf

I hope they have to publish any short positions, watching as they made billions and still held their nerve despite all the market rumours

and media speculation. Days later and several billion richer they close and move on.

I'd have been out the door as soon as the money started rolling in and the financial media talked of a bounce, which is probably why

I'm not worth several billion and still work 9-5 in a low paid job.

[Biddyboy]

IMPO it will only take one bit of bad news to send markets plunging again.

Yep, and there's plently of that just round the corner.

It's a blip, we are furked. "we're playing for time, and it's running out."

[chronyx]

Yep, and there's plently of that just round the corner.

It's a blip, we are furked. "we're playing for time, and it's running out."

We've all been saying that for years though.

[Kurt Barlow]

Yep.. but bounce or sustained growth?

I'm about 50:50 at the moment. On one hand the fundamentals haven't improved much.. the European issues haven't gone away.. the banks aren't any less exposed.

We might escape with a global slowdown in the second half instead of a further dip.. or we might not.

On the other hand, this little blip has ensured the undivided attention of global central bankers.

I'm staying optimistic, but keeping the popcorn handy

I saw this dip as a buying opportunity - shares are looking cheap compared to other investment vehicles. I concentrate on buying solid dividend earners in companies with fairly low debt levels. As a result Im only down 3.3% (includes commission and SD) since I started electronic trading in October 2010 and thats probably covered by dividends which are coming in thick and fast.

[interestrateripoff]

I saw this dip as a buying opportunity - shares are looking cheap compared to other investment vehicles. I concentrate on buying solid dividend earners in companies with fairly low debt levels. As a result Im only down 3.3% (includes commission and SD) since I started electronic trading in October 2010 and thats probably covered by dividends which are coming in thick and fast.

Companies ripe for private equity debt stripping?

[Kurt Barlow]

Companies ripe for private equity debt stripping?

You may well be right. But if they are it might as well be me who benefits from the buy out than some City spiv type

[Terribad]

I don't know how to post charts that have no url, but this link has a chart that may interst you bears.

http://www.marketoracle.co.uk/Article13141.html

basically its an old forecast from 2009, that has turned out to be very good so far. Predicted a bull run up til the start of 2011, then a long plunge into 2014, without even a sizeable rally on the way. So far so good. It all plots parallel with Japan's long slump, so the "that could never happen" arguments are not true.

Given the amount of talk about the west going into a Japanese style long economic slump, I give it credence. There are differences though, the inflationary monetry policy inclination being a major one.