Hello again - a few more charts this weekend - sorry I was a wee bit off colour last time.

Before I get into the charts, though, just a word re 'trading advice' (ie 'tips'). You know I don't give that kind of advice, so please don't ask. I guess my favourable mention of the Jack Milton 'Fixed Odds' service the other week got some of the newer 'recruits' thinking I would answer questions such as "Do you think I should sell XYZ share at such and such a price?" My answer of course was "I don't answer such questions."
Along those lines, one of you very kindly sent me a quote of your grandfather's, to do with fishing, and I apologise for having accidentally deleted the email because I wanted to reproduce it here - it was something like "a fisher needs the patience to sit and wait, and though Nature provides the fish, the fisher must dig the bait". Quite appropriate to the way I view TTEW.

You'll doubtless be relieved to hear that this weekend, I have no plans to bore you with all my reasoning as to why markets are teetering on the brink of collapse, but there IS an interesting snippet that I'll share with you before we look at a few charts: I'm sure you'll be aware of the fact that many company pension schemes are in potentially very serious trouble - BT's is probably the worst, with a deficit of £5.1bn - a third of the company's total current market capitalisation. I have no words that adequately express my views thereon. Anyway, prudent pension fund management (in my view) would dictate that 'quite a lot of the money' - don't ask me to clarify please - should be held in gilts (government securities) that mature over time in the same way that pensions fall due for payment over time. Equities (shares) should of course form part of any pension fund holding, with the percentage thereof being higher when prices are relatively low, to reflect dividend payments - again, please take this on face value because proper explanation would require me to write a textbook and anyway it has no relevance to TTEW per se.
Well, that mega - successful grocer, William Morrison, their Safeway takeover having given them total understanding of the Stock Market (Hmm, maybe not) have decided to increase the equities in their company pension scheme, to 92% of the total fund.
On the other hand, Reuters (who among other things, provide Stock Market information/analysis to companies and institutions worldwide) have been quietly reducing their pension fund's equity exposure, from around 62%, to 28%. In other words, they have been selling massive quantities of shares, into a rising market. Could that represent the strong selling to the weak, as has been mentioned before in WICS, or are they being stupid? Maybe Morrisons have got it right, after having made a total b*lls of the Safeway takeover? Gosh, that's a hard one. Ask me something easier.

Okay, let's move on and look at some charts, and first of all, I want to deal with a couple of questions that you asked during the week about stop losses as related to 'windfalls' - I'm very pleased that those involved, saw the potential trades and took them according to the TTEW 'rules' and the challenge now is "how to hold on to profits/let the trades run".

One of these is Dana Petroleum, and it was seemingly occasioned by my having mentioned Abbott Group the other week - a few of you decided to have a closer look at the oil exploration sector - not the worst idea given the current petroleum price worries - and Dana 'looked interesting' so you placed a 'buy' order. Anyway, I have annotated the chart below, and it's indeed pleasing how so many of you pick up on my comments and proceed to do your own research. That's the point of the whole deal, after all!

The second chart is that of Collins Stewart Tullett, and if you ask "Why has its price suddenly jumped?" then have a look in WICS of 20th March where you can find out, how to find out.

By the way - and going back to something I mentioned above about pension fund deficits, new accounting rules that come in this autumn, will mean certain changes to the balance sheets of affected companies. Possibly, that may not be good news for some share prices, but on the other hand, a company with a fully funded pension scheme that is run in an exemplary manner, may perhaps benefit from the rule changes.

One such company is Old Mutual, and its chart too, is below.

The final chart today, of Minerva, may also be of interest as its price rises - time will tell, as always.

Just be aware that despite my bearish outlook, there are always going to be 'buy' trades, no matter what the overall market is doing, and that you need to examine charts in an objective manner, whatever opinions you might have of the 'Big Picture'. I'm perfectly happy to make money in either direction, and perhaps you should be too.

That's all for now - see you next weekend.
Ian.

PS: The 17th September workshop is filling up fast, but there are still some places available as I write this. Contact Streetwise if you want to reserve a seat.(01709 820033)

PPS: The WICS password will be changing on 31st August - if your subscription is expiring, you should have already had a reminder, unless you're still using ntlworld or tesco.net, in which case, you're clearly not interested anyway!

'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'.