I must be totally wrong then - the push up in the major indices over the last week has certainly got a few of you pretty worried about my earlier bearish comments, that's for sure! Some concerned emails during the week about that, no doubt about it.
Just remember my John Maynard Keynes quote (now that we have our very own 'exclusive to WICS' search engine - thanks Jason! - you can find my earlier mentions of him for yourself.)

So do I think in any case that 'the facts have changed'? Nope, to quote Mr Paxman on University Challenge. It's still a bear market rally in my view, not a 'great buying opportunity' and so far I have no plans to alter my opinion thereon. Anyway, we'll see what happens, but here are another couple of snippets that perhaps reinforce my view that 'Down is the new Up' - the NYSE (New York Stock Exchange) initial public offering (IPO) has LOST 40% of its value since launch in March. If the shares of the Stock Exchange itself have managed that stellar level of performance, what does it say about the attitudes of the real insiders? And the other wee snippet comes from the pages of the Wall Street Journal in a comment about hedge funds, two of which have recently reported the loss of 80% of their value: "It's hard to get out when the exits are stuffed with folks all trying to do the same thing." Oh yes. (Important psychological point actually, continuing last weekend's theme - if people are afraid and want to get out, to whom can they sell? If nobody wants to buy because of 'fear', what happens then?)

More bits and pieces this weekend - starting with Cadbury Schweppes and their little misunderstanding as to the dangers of salmonella - when the 'bad news' was announced after the markets had closed on Friday 23rd June (nicely done, chaps!), one of you emailed asking if I thought it would be a good idea to sell the stock first thing Monday morning. I suggested 'perhaps not necessarily' and you can look on a chart for yourself to see what subsequently has happened. "Trade what you see/trade the rumour, exit the - what was it again?..." etc etc. Where have you heard that before?

An Ernst & Young survey seems to show that the average UK household now has 10% less disposable income than four years ago, due mainly to increasing costs of mortgages, petrol, gas, electricity, council tax etc. At the same time, the ONS (Office for National Statistics) suggests that the household savings ratio is rising - a sign of increasing worry by earners that hard times lie ahead - yet mortgage debt has now passed £1trillion and total consumer debt including other loans and credit cards is about £1.2 trillion - which is exactly the size of the entire output of the UK economy. Hard times ahead? How can there not be? With 10% less available to spend in the first place, AND a desire to actually save for once, there will be a lot less money flowing into discretionary purchases, that's for sure.

A couple of emails suggested that rising interest rates would be a 'Bad Thing' and I realise of course that these too will adversely affect many people, but not if your savings are high and your debts are low! Pensioners for example will actually benefit from rising rates. It's often missed by commentators that those who have been prudent savers over many years, are not beneficiaries of falling interest rates. A thought to bear in mind perhaps?

Anyway, moving on to a wee bit more re 'pyschology' - by popular demand! Seems a few raw nerves were touched by last weekend's sermon on the matter of superstition.

Sticking with the lottery then, and the next thing to say about it is the fact that most (if not all) 'big winners' seem incapable of holding on to their new - found wealth for very long. Why not? - I think because it was far too easily come by. What did they have to do in order to win it? Work 60 hours a week planning which numbers to choose, or just use family birthdays or whatever?

'Easy come, easy go' is a well - worn expression, but a true one for all that. And the REAL underlying reason why lottery winners can't keep the cash for long, I believe to be a feeling of "I'm not worthy." The cash was way too easily come by - there was no feeling whatever of having had to work in order to earn it, and deep within our psyche is a belief that that way of acquiring cash is in some way 'immoral', so one way or another, we square our consciences by simply disposing of the money. So superstition apart, there's no point in doing the lottery anyway because you'll just lose the money even if you win!

In a trading context, a feeling of 'unworthiness' exists too, and its effect is very real, believe me. Why should you make a large amount of money in return simply for sitting in front of a screen for an hour or two, clicking a mouse? Where's the blood sweat and tears in that for goodness' sake? My Dad was a farmer and he worked every daylight hour that existed, for not much cash return I can tell you. Why should I be so much more financially successful than he was, for a fraction of the daily effort?

If you carry that kind of (totally understandable) thinking into the trading arena, any successes you have will tend to be followed by losing periods where you hand back most, if not all, of your earlier profits - it happens to everyone, believe me.

How to overcome the problem? Work hard! There's no other answer in my opinion. Do the research, spend the time, learn the business, find your own way over time. When you make profits, set them against all the hours, weeks and years of hard work that were needed to 'get you there'. (And against all the losing trades too!) You need to believe you deserve the fruits of your labour - as far as I'm concerned, I have put over 35 years of hard mental work into arriving where I am now and there's no problem in holding on to my profits. Perhaps it's worth suggesting too that you won't tend to hide the profits under the bed - you'll spend some of them - and by so doing, you'll spread the money around in the normal way in which economies work - ie you'll be a contributor to the overall economy. You'll be more than a little unlikely to claim Social Security. Finally (and I promise I'm not 'moralising' here because I would never presume to do that - if anyone tried it with me they would get short shrift, I promise!) you might apply some of your excess funds to 'good causes', in an extermely modest emulation of Andrew Carnegie or Bill Gates -if you're broke, you can't do that, but if you're successfully taking money out of the capitalist environment then YOU can choose how to dispose of some of it. In a nutshell, you WILL feel 'unworthy' when you make consistent trading profits, but once you can accept that you HAVE actually worked hard for them and that they widen your choices, you'll be fine. In any event, at the most basic level, what's unworthy about trying to provide a secure environment for yourself and your family?

Okay, moving on to today's charts, I'll continue last weekend's theme about 'easy' or 'hard' and show you a couple of examples - note too of course that a previously 'hard' chart to trade can evolve into an 'easy' one, and vice versa. The other chart (Hammerson) is to show 'confusing' signals - one of you emailed me about it during the week asking about its recent channel, and my reply caused some confusion. Once I had a fresh look at it after a perfectly understandable request for clarification, I realised it might be worth highlighting here for everyone's potential benefit - so thanks for the questions, Andy!

And that's yer lot for today - please note that the next issue of WICS will be that of July 23rd, and that only autoresponders will be running on the email addresses from mid morning on Tuesday 4th July, till at least Thursday 20th July. It would be extremely helpful if you can 'hold' mentoring questions till after that date - thanks. (Oh, and since I'll be spending the rest of the summer at our holiday place, I won't have the luxury of a broadband connection after I return to work in three weeks or so, so can I ask you please not to send me any kind of attachments till further notice? Thanks.)

By the time I return to the coal face, doubtless markets will have given us a better indication of where they'll be heading as the year turns to autumn - my, aren't the nights drawing in already?

Till the 23rd then, best wishes, and happy trading!

Ian.