Where Now the FTSE? (2010), Comments/Observations on market direction Options

[Saucepan]

The "Where Now the FTSE?" (2009) thread seemed to generate a reasonable amount of interest during last year, so I thought I would open up another thread for 2010.

The same as last year, I am starting the thread with a straw poll for end of year predictions.

However, as the year progresses, the thread is also intended to serve as a place to post further predictions, comments, and observations regarding what might be looking to be major market turning points: i.e. takes on a monthly, weekly or even daily basis.

To get the content rolling, I am posting a link to FTSE end-of-year predictions of ten 'experts' drummed up by the Daily Telegraph:

http://www.telegraph.co.uk/finance/persona...s-for-2010.html

Their predictions range from 4,200 to 6,000. So, someone is going to be wildy wrong!

My own take, for what it is worth, is an optimistic one (so I am obviously hoping I am right!). I see the FTSE as being at least 6,500.

My rationale is based on the fact that:

* We are back in a bull market.

* We are (hopefully) just leaving behind the worst global economic setback in more than living memory (the harder the fall, the bigger the bounce?)

* The market will be dragged up by spectacular growth in China.

* The S&P 500 has actually ended the DECADE lower than when it started it (http://www.bloomberg.com/apps/news?pid=20601087&sid=azRby9JhxPH0&pos=1), so arguably it has a lot of catching up to do before we get anywhere near another 'bubble'.

* Lastly, I am encouraged by the fact that none of the 'experts' seem to be as optimistic as me

It may be worth pointing out that, historically, the second year of the US presidential cycle tends not to be a good year for the markets. However, I think the impact of China's accelerating growth will carry far more global weight this time around.

I could (and probably will be!) spectacularly wrong!


(REMINDER: If you have not entered this year's Annual Shares Competiton, and would like to do so, this is the final weekend for entries)

[taylor20]

Think the recession and a few other home coming chickens will cause a bit of a dip in this recovery so I've gone for a pessimistic 4900 target.

Posted on the old thread, some other predictions:

CODE

     Organisation...............End 2010 FTSE Level.........% Change from Current Level
     UBS.............................6250.......................+20.0
     Citigroup.......................6000.......................+15.0
     HSBC............................5900.......................+14.0
     L&G.............................5600.......................+8.0
     Brewin Dolphin..................5500.......................+6.0
     Share Centre....................5450.......................+5.0
     Deutsche........................5410.......................+4.0
     Credit Suisse...................5300.......................+2.0
     Morgan Stanley..................5000.......................-4.0
     Charles Stanley.................4700.......................-10.0
     Average.........................5510.......................+6

[Saucepan]

At the time of posting, the DOW looks as if it could be starting its bounce - possibly signifying the end of the correction at the support level indicated on the chart:



free stock charts from www.advfn.com

Perhaps, a cause for optimism; on the other hand, I will become a bit more concerned if this support level fails.

This post has been edited by Saucepan: Jan 26 2010, 20:10

[eyecatcher]

Hi Saucepan; intriguing stuff. I think we are definitely due a bounce, but (too long) memory reminds me that once we get into a bear scenario the last hour of trading on the Dow in particular becomes a giveaway, and I'm seeing more of it emerging recently.

It's still a two way contest, however I think we are now in a cyclical bear market (which allows fully for the rally we've seen from 2008 lows); that means I think at some point we could actually see NEW LOWs on FTSE.

Unthinkable is below 3000 but at some point in the next 18-24 months I fear it greatly. (One Scenario eg Tories win election and have to revoke on 'promises' - "we've looked at the books and this is far worse than we expected, than Brown said blah...............").

5200 then 4500 are both good bounce points and if we can restore the uptrend fairly fast then there's hope, but my FTSE year end (well early winter anyway) view is that we will take a look at 4200 between now and then.

I so want to be wrong, but that GDP figure 0.1% growth might be the 'top' of the recovery phase imho, or close to it, was really scary. Double dip here we come if that's the case.

Anecdotally, I got my Xmas credit card bill the other day and if others are receiving similar post, then the reaction is all too predictable!

We may have one last hurrah at the recent top, but that would only confirm my worst fears if we got a double top.

Ever the optimist lol! Never mind my FTSE calls have been pooh recently so hopefully again .

I thought we might see 4500 by end Jan. That's not going to happen, but for how much longer?

[Saucepan]

. . . intriguing stuff. I think we are definitely due a bounce, but (too long) memory reminds me that once we get into a bear scenario the last hour of trading on the Dow in particular becomes a giveaway, and I'm seeing more of it emerging recently.

Hi Eyecatcher

It is great to be having this kind of discussion once more, and again it seems that you are championing the bear scenario, whereas I am being more sanguine.

However, I could not agree with you more on the point made above and I hope I am not tempting providence (half an hour before the trading close over the pond), to notice that tonight the Dow has moved into positive territory after having been down all day.

I just hope it stays there for another thirty minutes!!

[eyecatcher]

Interesting chart today on the DTT from LG, showing the bounce around 5200 off medium term (last May) support. I think this might be the last hurrah for stocks; it really desperately needs to hold above here, or else imho it is going to be very ugly.

I hope your 'sanguine' approach wins out over my negativity!

This post has been edited by eyecatcher: Feb 1 2010, 18:17

[thechief]

big 7.5% percent sell off on Friday, big boys causing doom and gloom- there's some pretty heavy negative sentiment and downward pressure but if it goes sub 5000 Im thinking fill up time, it won't last