Hello again - it's an 'unusual' October so far, that's for sure! Mostly, October is a bad month for stock market bulls - have a look back along most index charts and you'll see what I mean. So far this month however, the opposite appears to be the case - which just goes to prove yet again that "The markets will do what the markets will do".

I remember a highly experienced (and extremely wealthy!) trader saying to me a very long time ago that "Manias inevitably end badly for their participants" and without the slightest shadow of a doubt, we're in the late stages of a mania as I speak - its end is of course utterly inevitable. 'The Sheep' are never more bullish than at the peak of a market - which is why the topping process can take longer than 'reason' might expect - because they'll scratch around to raise every possible penny in order to buy even more of whatever they imagine will keep going up in price for ever. But one day (soon) the Sheep will have spent all they can get their greedy little hooves on. When that day arrives, who else will be buying? And if no - one is willing nor able to buy, what will happen to prices then? (And don't think prices will simply 'go sideways' because they won't do that for very long either! Why not? Because loads of the woolly critters will find they can't service the loans/remortgages/new credit cards they took out to buy stocks, so they'll NEED to sell. To whom will they be able to sell at the price they paid? Hmmmm.....)

Anyway, stick to what the charts suggest and you'll be just fine - once the markets finally turn, they'll drop far and fast and give us loads of profitable trading opportunities for sure. And it's good to receive so many emails from those of you who have had a few of the WICS charts on YOUR watchlists and have benefited from the last few months of price action in the likes of Minerva, Electrocomponents, Cattles, Scottish & Southern Energy, J D Wetherspoon and so on.

Are there still viable 'up' ('buy') trades to be had even at this late stage in the overall uptrend? Of course there are! (And there always will be - note earlier comments in WICS about 'defensive stocks', 'tobacco stocks' etc. Type these words into the WICS search engine if you want to investigate further.)

Note my wording above - "Overall uptrend." Not "Universal uptrend".I recently mentioned that there's a growing 'flight to quality' and suggested that by no means ALL business sectors are currently experiencing euphoric sheeplike behaviour. Usually a 'squeeze' on smaller companies provides a strong hint as to the imminent direction of markets - partly because professional investors, being 'ahead of the game' have been selling shares they bought nearer the previous market bottom and are getting out before the REAL drop, partly because the punters see prices falling in that area and begin to seek 'safer havens' in the bigger stocks, and partly because the banks - who have a whole lot more bad debt on their books than they'll ever admit - always start the 'credit tightening' process at smaller company level and overdrafts begin to get very hard to acquire, much less to extend.

Today there's a chart for you to have a look at, where you'll see that the UK's AIM (Alternative Investment Market) looks more than a little different to the FTSE100, for example.

Moving along, it seems the Vikings have re - invaded the UK, with an Icelandic bank opening for business and offering depositors 0.25% better than the Bank of England base rate, with no strings attached. Could they know something about the way interest rates are heading then?

I see Deloittes (a major accountancy practice) reckons there could be as much as £100bn missing from FTSE100 pension funds - they believe as many as 25% of major UK companies could fail to meet the current ten year deadline to achieve full funding - not the best of news for a great number of hardworking employees.

But doubtless UK Plc's south eastern branch is going to boom for a wee while as £4bn is spent on the 2012 Olympics - that's only the current estimate mind, and with no actual bids received yet, maybe the final total will 'do a Scottish Parliament Building' - who knows? '40000 new homes, 60000 new jobs, long term benefit to the entire nation'.......Dream on. But it won't do the shares of some construction companies any short term harm, until penalty clauses start to kick in....I wonder if '2012' is only an estimate too? What a cynic this guy Williams truly is!

But obviously I'm wrong about the parlous state of the economy because it seems London house prices are again "rising at their highest rate for 7 years" after a wee slowdown for a while. And lenders are certainly scratching around for new borrowers, with City types who expect a big New Year bonus being offered a mortgage on the strength thereof - 'right now, to secure that fancy property immediately in case it rises in price still further.....blah blah' - and another lender is offering mortgages on the ONE property for up to FOUR borrowers, to twelve times their 'average' income - "So that deserving young graduates can get a foot on the property ladder..." What a load of tosh. Just wait till one (or more) of the four 'wants out' - crikey, it would be like divorce squared! Guys and Gals -spend a little, live a little, save a little more - there will be plenty time to buy a house for a whole lot less that you would be paying right now!

Anyway, onward before I'm accused of being irresponsible - my family already knows I am of course - and thanks to James T who pointed out during the week that Capital Spreads (mentioned last weekend) may not offer the facility to place orders 'at market' so you would really need to check that out. (I never comment on individual spread bet company criteria - it's up to you to discover how they might operate.)

Other than the FTSE AIM chart below, this weekend I would like to comment about 'patience' (yet again!)

Without going into massive detail, some of you - having seen a nice 'paper profit' recently develop - are wondering if you should 'just take the profit' and ignore the relevant dma that you chose to manage the trade.

You know my answer of course - you just find it hard to stick to your rules, that's all!

OF COURSE it's hard to 'stick to your rules'. That's almost certainly the hardest thing to do for any trader, no matter how experienced he or she might be. "Just this once, I'll grab the profit....."

Well, all I can suggest is that if you 'do it once' you'll 'do it again'.....

And the point is, at what particular price will you begin to take your profits? When the share has risen by 10%? Nothing wrong in that if you don't like using dmas - but I'll bet that after a share has gone up 9.8% and then stopped you out for a much lower profit, or indeed a loss, you'll alter the 'rule' to 9.5%. And then 9%, and.....

YOU need to find a rule that suits YOU. Then guess what? YOU NEED TO STICK TO IT. EVEN WHEN IT HANDS BACK A PAPER PROFIT IN FULL. If you don't like dmas, then frankly, what are you doing here? Go make up your OWN rule! (But consider carefully its criteria - how will you be able to stick with the long term winners for example?)

Now don't get the wrong idea - this is not intended as criticism of some of you - Ian Williams has no monopoly on the use of dmas to manage trades - but he has made the methodology HIS OWN - ie, he has taken OWNERSHIP of his actions as related to the TTEW methodology. YOU TOO can take ownership of the exact same methodology, a variation thereof, or something totally different - but the crucial phrase is 'TAKING OWNERSHIP'. Once YOU are comfortable with the certain knowledge that YOUR methodology will DEFINITELY hand back paper profits on a regular basis, you're in with a chance of becoming a success over the long term. If you're so greedy and insecure that you simply cannot bear to experience a losing trade then just give up the whole venture now before you waste any more money. It's that simple - EASY, even!

Sermon over (till the next time I think it's needed!) and on to the charts:

FTSE AIM as mentioned above, and then J D Wetherspoon and Carphone Warehouse anent my comments above about 'profit taking'.

And that's your lot - see you again next weekend, and happy trading until then.

Ian.

PS - if you fancy trading the likes of the FTSE AIM chart, please shop around the spread bet companies for yourself to see what's available and what the spread costs might be - that's part of the research that YOU can easily do!