A fairly brief load of ramblings this weekend, you'll be pleased to hear - I was doing a George W Bush yesterday - ie being highly intellectual and chopping bushes and undergrowth in one of my field corners - and this morning, my poor old back has been giving me proper gyp to the extent that you are currently receiving due deference, as I kneel before you at my laptop, painkillers at the ready.

So has anything really changed anyway since last weekend? Nope -it's August after all, that silliest of months when everyone shows themselves for the lemmings they are, rushing hither and thither to the beach/Ikea/wherever, all together to give themselves comfort. On Saturday 30th July, according to Le Monde, there were over 740km of traffic jams in France, and 3 milllion people waiting for trains, half them in Paris alone.
Britain isn't that much different by all accounts, at the start and end of the 'holiday season'. And Andorra, that beautiful little mountain country with a resident population of just 60000, 'enjoys' 12 million tourists a year...Agghhh! No wonder it's crowd psychology that moves market prices.

Anyway, that's my 'bad back/grumpy old man' rant for today, so on with business.

Truly, nothing has changed - onward and upward go markets, onward and upward go the public,each blindly following the one ahead, into ever more dangerous territory.

Showing my age (but not my musical taste) I'm reminded of a Frank Sinatra ditty - something about ants and rubber tree plants - at least it sort of rhymed - where the only line I recall, goes 'The higher the top, the bigger the drop'. Oh yes.

Obviously, we all were agog with total indifference when the Old Lady cut interest rates - just before the decision was announced, the Chartered Institute of Purchasing and Supply (CIPS) pointed out that manufacturing was continuing its contraction and that a rate cut was therefore 'essential'.
Amazingly, some sense then emanated from an economist! Ross Walker, UK economist for RBS, commented thus on the CIPS demand: "The survey supports the case for a rate cut, but the reality is that lower borrowing costs will make little difference."

Then there are those brainy folks at the Council for Mortgage lenders who predicted a 4% rise in house prices for 2005, back about a couple of months ago. Now, they predict a 2% FALL, amid the highest quarter since records began in 1960, for personal bankruptcy filings.

Oh yes, and one final painkiller - inspired sneer from me: I see the Treasury is issuing 'Guaranteed Equity Bonds' - 'savings' vehicles where you lend your money to Gordon so that he can squander it, and where you are 'guaranteed' a share of any stock market profits between now and 2010. And the really good news is...if there are NO profits, you'll get 100% of your original capital returned to you! So you give the Treasury an entirely interest free loan till 2010, and meantime, inflation eats away at your cash while you live in hope of anything sponsored by this sorry bunch, actually working. Hmmm, will I buy in? Gosh it's tempting, isn't it?

Anyway, you will be more than a little bored by now, with my certainty of an imminent stock market collapse seemingly flying in the face of rising markets.

Just remember that there are still loads of potential 'up' trades, even in falling markets, particularly in some of the sectors mentioned last weekend, and individual charts will indicate the relevant probability levels, as they always do. Keep that thought at the forefront of your mind while you read my seemingly pessimistic ramblings, and consider them character - forming, in helping you keep an eye on the big picture. Rest assured, 'pessimism' just isn't part of my character, but I wouldn't be too enthusiastic about adding to a share portfolio at the moment - I never forget Sir John Templeton's comment about starting to get out of shares when his taxi driver and cleaning lady were starting to buy.

Just one chart this weekend, if you don't mind - it illustrates a point I have made before, about where to take a trade on a channel breakout, and it also shows that they don't all end up as winners!

I should be firing on all cylinders again by next weekend, so best wishes till then. I'm off now to partake of a slightly more acceptable painkiller, in the shape of a rather nice Montrachet my wife tripped over the other day. People often ask if I drink a lot (must be because I'm a Scot) but I assure them that in fact, I spill most of it.
Ian.

PS: Next weekend, WICS may (will) not be online till Monday some time - my webmaster is going camping with his kids. Masochist! (By about 2pm - and it's fun! - wm)

PPS: I'll be holding a workshop for up to 15 people on Saturday 17th September, near Birmingham. If there is enough 'overspill' I may run a final one some time in November, but it's highly probable the September one will be my final one, and unlike Mr Sinatra, I am not planning a 'multicomeback'!
I enjoy running workshops and especially, being able to meet some of you - don't get me wrong - but they take a lot of preparation and eat too much into my time, especially now I'm no longer in the UK very often.
Anyway, if you want to book a place, please contact my publishers on 01709 820033 (Ask for Julia Briscoe) or email info@streetwisepublications.co.uk, for Julia's attention.

IW.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.