THE FTSE - Whats it doing ?

summerday

Yeah, and English translation would be good. I have a tracker fund that I pay a little into each month, and it is for the long term (have no intention of touching it for at least 20 years), and that is my only dabble in the stock market, so I'm not too worried. But if anyone could spare the time to say in simple lingo what they think is happening/ going to happen to the FTSE I would be interested to hear it.

Thanks, Sarah.

Lendusapund

Hi
My guides are simple 'moving averages', Im pretty much with the rest of you. It clearly shows a positive trend still, and I think the FTSE will fall to around 5100-5200 and then climb again, the same pattern it made back in feb/Mar. Should be a buying point at 5100? (Unless Im wrong & it goes below the moving-average line).

RichT (no-way pro investor)

cheerfulcat

saraht wrote:

Yeah, and English translation would be good. I have a tracker fund that I pay a little into each month, and it is for the long term (have no intention of touching it for at least 20 years), and that is my only dabble in the stock market, so I'm not too worried. But if anyone could spare the time to say in simple lingo what they think is happening/ going to happen to the FTSE I would be interested to hear it.

Thanks, Sarah.

Hi, Sarah,

I wouldn't worry too much. Deemy & co are talking about technical analysis, which uses charts to predict the future direction of share or index prices. Many people use TA for short term trading; it's hard to tell whether the fact that so many of them are using it actually affects prices. For instance, if a share price has risen to a level at which it usually drops down again and instead of dropping goes higher than that level, it is seen as a sign that the price has entered a new range and could be a reason to buy. This is true in the other direction too :-)

It has to be said that many other investors think that this is a load of old cobblers :-)

In any case, anyone investing regularly for the long term should welcome the odd drop, as it means that you are buying shares more cheaply.


HTH

Cheerfulcat

klondyke

Hi Saraht

Like cheerfulcat says we were talking about technical analysis. Apart from moving averages, tramlines, volatility and heaven knows what, there were two gurus; Mr Gann and Mr Elliott (both long gone, but still have followers) who looked at patterns in the mass market to help decision making (not sure that prediction is the right word). They are mainly used on indices such as Dow, FTSE as these supposedly reflect mass behaviour. (Not so true these days now that eg FTSE is dominated by a few very large companies). However, the same technique can be used on these individual large cos.

Basically, Elliott uses the wave theory mentioned above, ie market moves up in 5 waves, 1st may be small and will retreat (2nd wave) on profit taking, forming a new, but higher bottom. (If it forms a lower bottom, it ain't a 2nd wave). But after a 2nd wave come the third (clever, eh?). This is usually the strongest and is often double the size of the first. If you recognise it, buy, buy, buy (but it's not always easy to recognise!). Everyone will be shouting, "Bull market" - and then, especially those who have been taught to sell when the price doubles, will become faint hearted and sell, causing the 4th wave, down, but if the bottom of that is still higher than that of the 2nd, you could still be on a small roll for the 5th. (That's when everyone is still shouting "Bull" and is often known as the Fool's wave, as new investors suddenly listen to all the hype and dive in - just in time for the correction, which comes in 3 waves, known as a,b c correction, the a, going down on profit taking, followed by a rally and then a further slide, the whole correction possible taking the market down 50% of the 1-5 rise. The hope is that at the end of c wave, it will start another 8 waves ....

But a Bear market is the opposite, goes down in 5 waves and corrects in 3 upwards, so that the c wave mentioned above may turn out not to be c at all but the 3rd wave of a major downturn. Hence if the market continues falling below what was thought to be a c wave, tough!

I am about to lose my connection, so enough for the moment!

monkeydust_2

alas ..seems this thread is justification for a site for the intermediate investor..keep meaning to set one up but just lack the time! For the braver traders / investors go to https://www.trade2win.co.uk.

Milarky

I am about to lose my connection, so enough for the moment!

Are you on NTL dial-up then klondyke?... very interesting.

It's up again today - no one has mentioned 'window dressing' - a phrase applied to end-of-the month activity.

Surely the point about the FTSE, though, is that it is still going up? And, also it will have a 'target' level the end of December which can be losely 'predicted' from its level at the end of last December?

So what prediction do we make for the end-of-year then? [a bit of fun] 5600? That would be about 700 points.

klondyke

Milarky wrote:

Are you on NTL dial-up then klondyke?... very interesting.

It's up again today - no one has mentioned 'window dressing' - a phrase applied to end-of-the month activity.

Surely the point about the FTSE, though, is that it is still going up? And, also it will have a 'target' level the end of December which can be losely 'predicted' from its level at the end of last December?

So what prediction do we make for the end-of-year then? [a bit of fun] 5600? That would be about 700 points.

No, not NTL, but I am on a 2 hour cut-off dial up and was getting very close.

Yes, FTSE recovered today, largely due to news of takeovers. I certainly wouldn't predict anything from whatever happened last year:)

As mentioned earlier, I don't watch it much these days, the point of my last post being that some folks wanted a 'translation' of earlier posts. Hope the simplified version of Elliott helped! I think I'll leave Gann to others who have a better angle on it (so to speak!).

I don't think, but could be wrong, that window dressing applies as much as it used to and mainly affects options trading where month end prices are more significant.

blinko

i think it will go down to be honest there doesnt seem much reason to go up, xmas is here trading will be poor for retailers so there should be some stuff in the jan sales as i think poor trading will affect most of the FTSE but these guys above me know what they are talking about im just a skeptical beginer hoping to follow in there footsteps

deemy2004

Ive managed to get rid of about 15% so far, another 20% or so and I'll feel comfortable with my exposure, even IF it tanks 500 points.

At the moment the markets not done anything so far to negate the probability of revisiting 5130.... so far

Just a final note on elliot waves - very seductive - but unfortuanely it will liekly cost you in MISSED opportunities

Whats it likely to do in the immediate future ?
Okay my GUESS is - decline to around 5300, then up to towards 5380... well I hope so since that would be a good place to offload some more stock before it revisits 5130

EdInvestor

cheerfulcat wrote:

Deemy & co are talking about technical analysis, which uses charts to predict the future direction of share or index prices. It has to be said that many other investors think that this is a load of old cobblers :-)

Quite right

In any case, anyone investing regularly for the long term should welcome the odd drop, as it means that you are buying shares more cheaply.

Yep, what we have now is known as a "buying opportunity" - a good time to stock up on those shares you were planning to get while they're going cheap .