Tuesday 25 May 2010

is this capitulation?

The FTSE is down another 2.5% today? With all the bad news around like North Korea considering war with South Korea, and the Euro crisis, it fees like capitulation.

On the other hand red line on the chart on the right shows the bull/bear/bull market. We have only just fallen below the 200 day moving average - suggesting a prolonged period of falling FTSE or else a big bounce.

However, no bounce is very bad news as it could mean the end of the QE Bull market and either a long period of stagnation or another bear market being born. not good for the savers who piled out of 0.5% savings and into shares.

I have no insight to offer in such a volatile market. Suffice to say my 30% profits on the year are down to 5%!


Mark Wadsworth said...

I'm a bit disappointed really.

Traditionally, the FTSE 100 would have dipped below its May 1997 level round about the time that Labour were kicked out again.

We were back below that level earlier last year but this time round, those clever Labour blokes managed to hang on long enough to see a modest overall nominal profit on the FTSE during their years in power (assuming dividends net off with inflation).

Nick Drew said...

have another graph I'll post tomorrow

not encouraging

Steven_L said...

The Ruffer Total Return fund is still going up!

Simon Fawthrop said...

Hmm, this is a tricky problem. I've been moving my pension funds in to a SIPP and they've been in cash for some time as SIPP is set up. Last week I agreed an investment strategy with my IFA to pile back in to funds and I'm now wondering if I can stop her.

BTW, as a matter of interest has your profit dropped from 30% to 25% or to 28.5%? Your % of % is a bit ambiguous.

Andrew B said...

The only certainty is that the FTSE will not do quite what you think it will.

Given that if you bought on a tuesday and sold on a thursday you could make or lose 10%, it is hard to say 'going up' or 'going down'.

My prediction is continued bouncing in a band, about 4800 - 5900.

We started the year about 5400 and I think we will end about the same place.

I have no doubt that I will be shown to be wrong in just a few days.

.. but do feel smug about the 130pt rise since close today.

CityUnslicker said...

No Simon, from 30£ to 5% - i.e. virtually all gains for the year wiped out.

My portfolio is in very high risk stocks, so I get a better upside and a deeper downside!