Well, the new computer setup is (nearly) set up. Not something Williams the Luddite wants to involve himself in too frequently! I know loads of people are 'into' computer & general electronic hardware and have every gadget they can lay their hands on, but not this country boy. I "know what I need to know" in order to let me do my job, but how anyone can actually "like" a computer is totally and utterly beyond me. The only difference between a computer and a snowboard is that the former is a necessary evil......it's always amusing (if we have ordered some item or other for future delivery) when people ask for a mobile contact number. I actually do have one but it's never switched on and is for emergency use only, and neither Mme W. nor myself would have a clue as to the number. Anyway, a huge "thank you" is due to Andrew in the computer shop, because without his having been able to log in to these machines and remotely control the entire installation process, I would by now have used my snowboard repair tool on them. Not all is yet spot on, but it's getting there - if you fail to receive a response to any recently sent emails it's because I fell into the trap of listening to "conventional wisdom" and "upgraded" from Outlook Express to Outlook. On Monday (with Andrew's help), I will upgrade from that mess, back to Outlook Express. Outlook is just an overcomplicated load of unnecessary add - ons, as far as I can see. And these new laptops are "wide screen" - aaggh. Horrible things.

OK, first rant of the day over - let's move on to "the news" and how it tends to affect markets. One of the emails I did receive during the week was asking that very question - thanks Chris - and I said I would mention something about that today. Here's the email in question:

"Hi Ian
I wonder if you could explain a little bit in this weekend WICS about markets & news. What sort of news is likely to have a negative effect on equity prices? I see banks losing billions, then reducing the value of their investors pennies even more, has a positive effect. When I walk through my local town people aren't shopping, going out to pubs or restaurants, even our Tesco delivery driver says things are really quiet. Firms are laying people off in larger numbers for the first time in years, house prices are dropping (going back to reality?) but still people seem to be willing to pay more and more for equities in companies? Any light you can shed to help me understand this crazy world would be most useful.
Yours with thanks as always
Chris"

A telling email, isn't it? Chris' town is not alone in suddenly becoming quieter than before - jobs are disappearing everywhere, and according to TDX (a debt management company) about a million people in the UK have "problem" unsecured loans (cars, home improvements, credit cards etc), totalling around £25bn. A whole lot of money, by any standards. According to RICS (Royal Institute of Chartered Surveyors) property valuations are falling at their fastest rate since records began. UK State pensions are utter rubbish and there are an awful lot of pensioners who can't afford to go out spending on anything but essentials. Fuel prices are set to rise another 25% or so over the next six months.....and so it goes on. There's a whole lot more "bad news" as regards the banking sector, as I'm sure you are well aware - if only from the ongoing Williams anti - banking rants. (By the way, with RBS at last having to admit they haven't a clue about anything really, and about to tap shareholders for a measly £12bn or so to prop up their tattered balance sheet, it's gratifying to see such a bunch of scoundrels at last having to eat a wee bit of humble pie - although doubtless their inept chief exec will get a very golden handshake at the expense of said shareholders. Did I ever mention ABN AMRO in WICS? - try the search engine! Just to make it easier for you, start with WICS of 7th October 2007 - you may find it relevant and it also answers Chris' specific question.)

And RBS will be only the first of many seeking cash from shareholders - Bradford & Bingley are denying suggestions that they too need a rights issue, saying "We have financed our business activities through 2008 and into 2009, as a result of our conservative approach..." That far into the future, eh? Good stuff, guys!

Last week a headline from the USA said "US Stocks Rally on Citigroup Earnings". The fact that Citigroup had NO earnings seemed to escape the commentator. In fact, they had what some people love to call "negative earnings". I prefer the word "losses." It's just so much more accurate, isn't it? And Citigroup's losses were MORE than any of the pundits had been predicting. So what's the real lesson from all the above? Simple! Just as I have always banged on about, "the news" is utterly and completely meaningless as regards market behaviour. "Markets do what they do" and that's all there is to know. Why do markets rise? Read the 7th October WICS now - then come back to today's ramblings.

OK - welcome back to April 2008. Why then are people still more optimistic than pessimistic as regards buying shares? That too is simple enough (in my view - and make no mistake - the Williams crystal ball can be mighty cloudy at times!) The reason is "recklessness brought on by living for far too long in a nanny state environment". As frequently mentioned in these ramblings, an awful lot of investors/would - be investors are too wet behind the ears to understand the true meaning of "recession" and even I am too wet behind the ears to have any direct experience of "depression". Only my late Mum's descriptions of helping her Mum and a whole team of volunteers to feed the dole queues in the early 1930s give me any kind of view thereon. Of course, THAT will never happen again........will it? Of course, "They" will sort everything out. The "Sort Everything" fairy (SEF) is a wee beastie that far too many people believe in, and current government action does nothing to help disabuse people. This business of government taking on mortgage toxic waste as some kind of "security" to let banks use gilts (Treasury Stock) as borrowing collateral is just another example of the pathetic grasp of economics now being publicly displayed by Gordon - if you really think wee Allie Eyebrows did more at the famous "banking breakfast" the other day, than pass round the bacon butties, you have no grasp of reality - the claim that somehow the mess is not going to land in the taxpayers' lap is just nonsensical. Yet again, a whole generation of politicians has robbed your children's piggy banks. Above, I mentioned "rubbish" anent State pensions - how much do you reckon your children and grandchildren will be getting in that regard? So in a nutshell, the current optimism is caused by a massive, false, belief in the SEF mentioned above - a bit like the IMF but a tad more ephemeral perhaps. Optimism is also encouraged by "financial advisers" - some of my least favourite creatures - "A great buying opportunity/Buy the dips". What they mean of course is "The dips are buying"........In a nutshell then, after that extremely verbose semi - explanation: news is all biased in whatever direction suits the media at any specific moment - and markets move up on optimism, and down on pessimism. It really is that simple. And when you think about it, a false sense of security permeates Western life nowadays. You see it in all sorts of areas - you'll know that Williams enjoys a wee bit of skiing, and in that environment, it used to be the case that only small children wore crash helmets - and rightly so. But now, just about every would - be macho "expert" wears a helmet, and the result is they believe they are invulnerable. Hence they ski/board far too fast, and a good 90% of them are useless self - taught "swishers" anyway. The result is that not only do accidents happen much more frequently, but when they do, they are far worse than they used to be. It's like driving - tailgating seems now to be the norm, because after all, brakes are brilliant nowadays, what with ABS, ESP, ETC, Uncle Tom Cobbley and all - and there's an airbag in front of me, so I'm invincible and invulnerable......what was that about increased speed and reaction times? Doesn't affect me, mate - I'm Top Gun on Grand Theft Auto......You may smile, but the point is a serious one - the same "invincible/everything will be OK" attitude is destroying the real wealth of many Western economies. A serious point from Williams? Whatever next?

Next, in fact, a few recent scams - it appears 112 construction companies have been colluding to defraud the taxpayer, by ramping up price quotes for public contracts. Surely not – it can’t be true! And Tesco is going to "carbon label" all its products. Ho ho. As if anyone will ever be able to work out what that actually means. Maybe some of the alleged 30000 new university students to be sponsored by "Business" - including Tescos of course - can do their thesis on that? Oh yes, and a £3000 trade - in if you buy a new black cab, "To help improve London air quality by taking older taxis off the streets". Or is that really "To sell you a new cab at a hugely inflated price and pretend you're actually getting a real bargain"? Oh yes - nearly forgot about the property developer who parted with £1m "deposit" to someone claiming to be selling the Ritz Hotel at a huge discount on behalf of its owners. Due diligence, eh? Or just a stupid, greedy reaction to a perceived bargain?

Moving along, a big welcome to you good people from Down Under who have recently had the good taste to subscribe to these mutterings. To answer a couple of your questions, there's a very useful charting package for Aussie stocks, at www.incrediblecharts.com and you can find a lot of relevant information on www.businessspectator.com.au - including director deals. (On my links page, which you’ll find by clicking on “info” along the home page top bar.)

Next, it's gratifying (given my long term anti - biofuels stance: use the search engine for more about that particular scam) to see that the EU is getting very cold feet about the whole thing, after having been initially taken in. Hopefully the whole mess will soon be a thing of the past - if only for the sake of food prices.

Anyway, on to a chart or two and today we'll look at Rolls Royce again (it has been featured before) because there's a nice example of a counter - trend channel, a probe out of it, and a retrace - one of the "more advanced" TTEW style formations that can provide a trading opportunity. Then (following the response to last weekend's charts as regards "watch lists") we'll see why Balfour Beatty (who blew the whistle on the price fixing scam mentioned above) is also not worth bothering with for now. Again due to the response from you, these are all the charts today - more and more I'll focus on using the video updates to provide the overall charting "lessons" - so happy trading till next weekend, by which time I trust I'll have lost the urge to take the snowboard chainsaw to these computers!

All the best,

Ian.

'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'.