Hello again - and I hope that the UK's tropical storms haven't left you flooded out where you are - whatever, I don't suppose it feels much like summer.

Much excitement on Wednesday, when markets throughout the western world seemed finally to be starting on the long road back down to the bottom of the hill - then a bit of uncertainty crept back in on Thursday's bounce back up, with Friday's drop getting some more of the bears reaching for the nail file again. Hmm - this bear ain't so sure - not yet anyway. I reckon we'll see a bit more of a drop that's going to be followed by a sharpish pop to the upside before the bulls end up as steak mince. Did anyone mention the word "patience" at any time? The show might well be reaching its finale (and I'm certain that is indeed the case) but the encores might go on for a while yet, so rushing to sell the indices could be just a tad premature. When I was a wee fella I remember you weren't allowed to head for the exits until after the national anthem had finished and that sorely tried the patience of this particular child.

Moving along, there was no great surprise involved in noting that the "cash for honours" thing ended as per the BAE enquiry, nor that the "Private Equity" industry needs no "closer scrutiny" - it's always nice to know that everything is as pure as the driven snow and I now feel totally reassured. Maybe I'll start saving for a peerage......

It was interesting too to see that fallout from the Toxic Waste business (as mentioned more than once in recent issues of these ramblings) is beginning to affect illiquid investments more and more - an email from one of you who lives in Dublin pointed me in the direction of a couple of Hibernian Property Funds (underpinned by a Norwich Union property trust) - their managers are "repricing" the units to discourage people from getting out. A spokeslady commented "Units are now being priced on a disposal basis, not an acquisition basis". PR-speak for "Investors are getting jittery and if too many want their cash back at once, we'll have to sell some of our perhaps slightly over - priced property for a lot less than we paid for it, which will cause a run on the fund, which will require us to dump even more property, which will...." etc etc. Now don't get the wrong idea - property funds such as those provided by Hibernian, Norwich Union et al, are perfectly respectable entities and are by no means 'toxic waste' as defined by these American sub - prime CDOs I spoke about a week or two ago. But they ARE "illiquid" investments. They might hold 20% of investors' money in cash, but the other 80% is in bricks and mortar, so if 25% (by value) of you want your money back tomorrow, what then? And that becomes a huge problem once people lose confidence in property funds, as they currently appear to be doing.

Anyway, we'll see how property values evolve over the next year or two - it's going to be interesting.

Next, it seems cheese and wheat prices are still rising, having already gone up over 30% this year. So what? So inflation, that's what - they're not the only things that are going up in price. Bad news if you're a pizza fan, and maybe baddish news if you're a pizza restaurant owner too? But the Galileo satellite fiasco (European surveillance/road pricing project) might be going down, and that surely has to be good news for freedom lovers everywhere.

Also going down (perhaps) - the Ford Motor Company? In another 'stable door locking' exercise, I see Volvo is now up for sale. Maybe the Chinese will arrange a rescue package.

And 'already gone down' - Metronet. £2bn short of what they needed to attempt to sort out the London Underground. "Under ground" is certainly the best description of them now. Ah well, it only cost £500m in legal and consultancy fees to set the thing up in the first place. Yes - that was what I said - five hundred million pounds sterling in fees to set up a total disaster. I'm in the wrong business here. Ah well.

Moving on to today's charts then before the writs start flying, and first we'll look at 'support' on the charts of Compass and Babcock. Then we'll examine a channel on the chart of W S Atkins, and finish with another type of channel on the chart of CSR. That should be plenty for this weekend, so I'll talk to you again next weekend - in the meantime, I sincerely hope the weather dries out a bit for you if you have been suffering a bit from the damp.

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'