Hello again - from a not so sunny Scotland - a bit of a shock to the system being back here for a time, for all sorts of reasons - not least the 4 degree temperature accompanied by sleet and wind. 'Raw' would be a fairly accurate description. It certainly brings home one of the many reasons why I left in the first place! Anyway, all being well I'll be away again in a couple of weeks or so but this time there should be no interruption to WICS production - just a couple of days offline around the 2nd/3rd May, all being well.

Little seems to have gone on in the past couple of weeks that might be classed as 'newsworthy' in the markets, that's for sure. Everyone seems as complacent as ever and the major indices are continuing in their upwards flight towards the sun - hopefully more than a few of us will remember the story of Icarus however.....

I see Mr & Mrs Alliance Boots (who got married last year) seem to be planning to move to a new (private equity) home and are looking for the most expensive one they can find, egged on by their friendly estate agent Signore Pessina. You'll know I have mentioned 'private equity' more than once, so suffice it to suggest now that the happy couple will likely be paying rent of around £500m (in the form of interest commitments) for their fancy new arrangement, out of annual profits of around £600m - that's pretty close to the bone to say the least, and they'll need to make a good 20% a year return on capital to keep their heads above water. Hmmm.... perhaps they didn't check with their neighbours the Debenhams before being so eager to move house? Needless to say, the banks are forming a queue at the trough like the good little piggies they are.

Moving along, you'll know of course that 'official' inflation has breached 3% and caused Mervyn to have to report back to the headmaster - even though everyone knows it's nearer 5% in reality and has been so for some time. I've banged on for long enough about the inevitability of interest rate hikes - as of course you know, and here they come, folks. Public sector workers will be receiving a 3% wage cut in due course when you think about it, AND will be paying even more for their mortgages - not to mention the fact that all of a sudden, no lender seems to be offering a fixed rate deal. It would be fair to suggest that 'reality' at long last is beginning to set in, with reports too about the strong Pound noting that it's extremely bad news for Blighty Plc, unless you're going abroad on holiday. Why is it 'bad news'? - simply because like Gordon himself, the economy is extremely unbalanced, running the biggest trade deficit since records began. There is "strong consumption but poor production" as one commentator recently put it - the strength of sterling means imports are relatively cheap, but British exports (few, very few!) cost their recipients more and more so they buy less and less from the UK. And much of the 'consumption' is still being funded by so called 'equity withdrawal' via remortgaging, which must be the dumbest thing anyone can do, especially with recession so clearly looming. Ah well, all the more profit potential in due course for the alert trader so please don't think the above comments are anything whatsoever to do with my being gloomy - far from it! The wheels of the so -called 'economic cycle' do just that - they go round - and the boom years are inevitably followed by the bust years. It was ever thus, and despite Gordon's arrogant proclamations that he has single - handedly changed all of that and replaced the economic cycle with 'ongoing stability', he's kidding himself - as will be all too evident pretty soon. I wonder whom the next chancellor will blame? He certainly won't keep the job long if he dares suggest that maybe Gordy wasn't quite as wonderful as he would have had everyone believe.

Anyway, enough already! You probably get fed up with my ranting on, so let's take a look at some charts - ranting makes us no money for sure, but it certainly lightens up my day! I'm not sure which is the better stimulus to my system - a good rant or a double expresso. I guess I'll just stick to both.

Today we'll look first at the German DAX index because the last time we discussed it (18th March) we were talking about a potential 'sell' - which of course didn't happen because the index just kept on going up. Now, we'll see that there's a potential 'buy' in the offing. Then we'll examine the S&P 500 where the 'psychology of round numbers' will almost certainly prove to have a magnetic attraction. Finally there's a stock (Luminar) to have a wee look at from the point of view of both resistance and a triangle - and that should be plenty to keep you going for this weekend - so best wishes till next time.
Ian.