Trading the Easy Way

Well, that has sorted the matter of no smoked salmon left in the freezer - an excellent week's fishing and no mobile phones within earshot, never mind a computer! I confess I didn't feel in the slightest at a loss from being out of contact with the world, but it's good to be back for all that. It's amazing how cold you can become, wading up to your armpits in a river for any length of time. Ah, the joys of being a masochist - but I refuse point blank to eat any kind of farmed fish!

A fairly brief WICS today because it will be a day or two before I'm back properly into gear, being just a tad travel weary, but nevertheless it hasn't taken more than a few minutes' study to see that the long - predicted 'end is nigh' scenario in the markets is indeed now 'very nigh'.

It certainly is beginning to look as though the long awaited slide down the slippery slope is getting under way, and there's a suitably annotated FTSE100 chart below, that reflects what looks like might be about to develop over the coming weeks and months.

With around 33000 house repossession orders currently on the go in the UK, and USA repossessions up 63% on the same quarter from last year, there's little doubt that inflationary pressures are beginning to feed through into the consumer's awareness at long last - and that's going to hurt discretionary spending for sure. 'Denial' may well begin very soon to give way to that other 'D' - 'Despair'.

Maybe buying shares in the new Debenhams flotation could be a very bad idea - but don't take that as 'financial advice' of course!

According to Global Insight (a consultancy) there is a 'real danger' of the '33000 repossession orders' figure mentioned above "Climbing markedly over the coming months".

One of you has emailed me a recent headline from a UK newspaper that suggests the current £1trillion of consumer spending is all down to the hard work of the great British public. The implication seems to be that all that money has been earned by sheer hard graft and is there to be spent.

Surely signing in quintuplicate for a remortgage can't be THAT hard work, can it? Or maybe it's the drive through heavy traffic down to DFS to order the leather suite that's the hard work?

You'll gather that a week beside a peaceful riverbank hasn't entirely blunted my acerbity - and while I'm on about it, what about this stuff in the Times Educational Supplement regarding parents wanting schools to set their children's bedtimes for them? Have I ever mentioned "taking responsibility for one's actions" before? My gosh, if parents can't handle their kids' bedtimes, what chance is there of taking ownership of their monetary decisions? No wonder Substandard Life and the like can get away with financial murder!

Ah well, maybe that's why 95% of people lose money in the markets and hand so much cash to those who CAN handle responsibility - and we certainly shouldn't complain about that I guess!

Besides the FTSE100 chart below, there's one of Northumbrian Water in respect of what perhaps it might be best to do when you see conflicting signals - refer to WICS of 2nd April this year for more on this one. There's also an update of the Cattles chart last featured on 12th March 06, just as a reminder that you won't always make much profit on any individual trade by sticking with the TTEW methodology, although overall it (the methodology) works pretty well nonetheless. Sometimes (always?) however it requires courage to watch 'paper profits' melt away -occasionally all the potential profit, sometimes only some of it - but you will ALWAYS hand back something compared with what you 'could have had' if you had been able to exit a trade at exactly the right time - the 'right time' of course only ever being visible after the event.

On that note, I'll move on to today's charts, and I'll talk to you again next weekend.

Happy trading,

Ian.