Sell out. This is just a bear rally.

amcluesent

Things can only get better?

Don't be so sure, this look like a classic bear market rally. Sell into any strength there is.

The banks have gobbled up ££ billions just due to toxic-waste in packaged-up CDOs which completely misstated the risks of default.

We've yet to see the collapse of derivatives, the next layer of leverage to be blown away. Unlike the banks, the hedge funds are collapsing in private, but collapsing they are. The impact on the wider economy will be a double-whammy on top of the tax increases to bail out the banks as margin calls come thick and fast. Everyone is going to start selling then - remember is was margin calls on derivatives which was behind the Great Depression.

1echidna

In a world where no one in a public capacity would say such things for fear of being accused of helping to precipitate the event they are predicting I wonder if you are right. Unfortunately I don't really understand the significance of the collapse of derivatives and whether or not the market has already discounted it so I won't be either buying or selling equities for a couple of months. I won't say I haven't been warned though.

ManAtHome

FTSE has been a bouncy castle most of this year - probably good news for the city spivs, but they can use somebody else's cash for the time being.

Andrew64

Stock markets are bouncing up and down like yoyos! Over the past few weeks there has been the situation where share prices on the FTSE 100 have fallen sharply one day, shot up the next, and then fallen sharply the day after that! It's a real gamble right now.

Aegis

Andrew64 wrote: »

Stock markets are bouncing up and down like yoyos! Over the past few weeks there has been the situation where share prices on the FTSE 100 have fallen sharply one day, shot up the next, and then fallen sharply the day after that! It's a real gamble right now.

Hence why I'm drip feeding in and waiting for a recovery. No need to panic, I'm just getting a better deal now than I was 6 months ago.

miserable_ol_so_n_so

amcluesent wrote: »

Things can only get better?
....................

We've yet to see the collapse of derivatives, the next layer of leverage to be blown away. Unlike the banks, the hedge funds are collapsing in private, but collapsing they are. The impact on the wider economy will be a double-whammy on top of the tax increases to bail out the banks as margin calls come thick and fast. Everyone is going to start selling then - remember is was margin calls on derivatives which was behind the Great Depression.

When a hedge fund collapses, the investors in the funds lose their money. This is money they have invested and is accounted for. So what margin calls are you referring to? Is this some other risk that the banks have taken up that we dont know of?

purch

This is just a bear rally.

We are still in a Bear Market for Equity's and we will be for quite some time.

The Stock Markets around the Globe will have to move a lot higher than they are now before the Bear trend is extinguished !!!

Howver this is a significant rally within the Bear Market, and as with picking the bottom, picking the top of this Bear Rally will be impossible, so wait for the turn .

dunstonh

There also tends to be a period of low volume where very little happens on the markets. No real buying or selling. That often marks the end but you wont know for a few years.

StevieJ

A while ago I looked at the early 90s recession, the bottom was struck during the first qtr to show negative growth i.e. that recession was anticipated and discounted.

Tettle

True and the index was almost certain to rally after after the news of the bank bail out. Much of the market is moved by sentiment. I expect a lot of drifting over the next few months.

Saucepot

Bear Market? Bull Market ?

Looks like a monkey market !