Well, here we are at another weekend with nothing at all different to report - the Sort Everything Fairy seems to be one of these wee guys that the more you believe in its existence, the stronger it gets. The magic "THEY" are going to put everything to rights. Even Gordon will get a makeover and become loved by all. There really is nothing to worry about after all. Let's face it, the chairman of Royal Bank of Scotland has suggested that RBS is asking for more cash from shareholders with a "Very high degree of humility." So even he has been touched by the little fairy's good influence - a "first" for that particular institution and surely a sign of good times ahead. And he begged shareholders not to force out his nice chief exec - after all, the poor chap has to get by on only £4.1m a year and needs all the support he can get. Obviously, the caring nature of institutional shareholders will see them respond charitably to that request. Why, even Ian Williams might have a kind word to spare for bankers in these ramblings......hold on a few days while I try to think of one.

Coming back to reality, it's hard to believe that anyone would want to buy banking shares, "discounted" or not. After all, they're only discounted to current valuation - what about comparing them with their TRUE valuation? (For those of you new to these pages, I refer to the RBS' going to shareholders with a begging bowl, as reported here last weekend.) If anyone actually believes the current banking spin - "The bulk of the sub prime crisis is now behind us..." then there is no hope for them. The problems facing banks are far, far worse than they would have anyone believe. As mentioned somewhere in WICS a while ago, the scoundrels (there you go - it didn't take me days to find a word after all...) have been able to value certain "assets" any way they wanted, for a very long time, and they're still only writing down that which they have been forced to do. They still hold a massive amount of toxic waste (again, if you're new to the Williams 'take' on matters economic, try the search engine for more on toxic waste) that to date, they don't need to admit to. If it's AAA rated, it's OK. Ho ho ho. Pass me my red suit and big white beard.

On a similar note, it seems (according to a headline during the week) "Barclays Shareholders Demand Answers." Just as well they're not demanding a return on their investment, eh? Ah well, plenty work for lawyers ahead methinks. Once the poor wee Sort Everything Fairy has fluttered its last, the blame game will really get a chance to become a major contributor to law firm profits - the writs will be flying so thick and fast, another new Heathrow terminal will be needed to cope. Bradford and Bingley admitted last week that more of its borrowers are in arrears, but declined to provide figures thereon. Probably because the management has no idea.

And talking of "demanding answers" the Commons Public Accounts Committee is suggesting that the UK government misled MPs and the public over the true likely costs of the 2012 Olympics. Surely that can't be true? After all, the sports minister is saying the "budgets were based on the best intentions" and of course she must be believed, because she's the minister. Maybe if she ever loses a tooth, she should put it under her pillow...?

Still speaking about scams, it's interesting to note that the UK train ticket pricing regime is to undergo a major overhaul, the intention allegedly being to "Simplify its unnecessary complication." Nah, it's "To bump up prices under the guise of being sensible."

And I note that tobacco companies have been accused of a price fixing scam that goes back many years. Gosh - surely not them too? Last weekend it was construction companies - where will it all end? Next we'll be hearing that arms companies have been colluding to fix the levels of bribery payments.

Oh yes - another thing that caught the Williams eye during the week was the matter of nappies. No, nothing directly to do with me, honest! But it seems that 750000 tonnes of the things (so - called "disposable" ones) are dumped every year in UK landfill sites - or over the nearest hedge if you're speaking about Ireland of course - very sad but oh so true. It appears that a Canadian company has submitted plans to open a recycling plant in Birmingham - which has to be good news of course. But fundamentally, the problem has been created by "big business" because there's a heck of a lot more profit in Pampers than in selling the good oldfashioned reusable (for years and years - great for all sorts of other purposes!) towelling ones. I admit that I got pretty annoyed with Daughter Number One when she told me she only used disposable nappies for the "wee terror" - she assured me that if she could buy the proper ones, she would - but they are seemingly no longer available. What a blatant scam - exacerbated no doubt by the attitudes of the terminally lazy. Am I oldfashioned? Oh yes. Even my skis are seven seasons old because you can't buy proper ones any more - ie ones of a decent length as related to other aspects thereof. And I still use my late Dad's split cane fishing rod for some of my wee excursions...

Anyway, moving along to matters of more immediate TTEW interest, and as suggested above, there's a whole lot more nasty stuff still to surface anent toxic waste in the Western banking environment - and the credit crunch is only just beginning in my view. Any current stockmarket rallies should be treated with a great deal of suspicion if you happen to be one of these misguided people who "invests" in stocks. The world is full of (extremely ignorant) "financial advisers" who would part you from your money on the basis of the "great buying opportunity" presented by currently depressed prices. I have a very simple question for such "advisers" - please explain to me WHY it's currently a great buying opportunity, and why I shouldn't just wait another five or so years in order to pick up stuff at maybe 50% - or less - of where it's at right now? Ah well, we'll just have to exercise a wee bit of patience (always a great trading attribute, if not indeed the greatest) and we'll see whether it's Williams or the "advisers" who are right. I can wait - can you? The great thing of course is that as TRADERS, we don't need to wait! WE can take opportunities in EITHER direction, as they present themselves. And the opportunities are there, for sure.

Next today, I thought it might be worthwhile sharing a couple of emails with you, and my replies thereto. Here's the first one, asking a real "FAQ" for sure - hence the reason it might be worth reproducing it here:

"Good morning Ian,

I have read you talk about people struggling to find trading opportunities, my question relates to the other end of the scale.

1. When you started out how did you / do you refine down your watch lists? maybe its just me but I am seeing alot of stocks nearing good opportunities! This may sound great but it can be a bit overwhelming - I know you talk about the Zulu principle but even if you are just looking at the FTSE 250 and 350 stocks how do you reduce them down if there are lots looking good. ( I have 100 in a watchlist)

With Forex and Indices its easy as they are fewer in number thus easier to review quickly daily, whereas I am finding myself reviewing loads of stocks daily.

One of my answers was to create a daily, weekly and monthly watchlist, but I am finding lots are going in my daily review list.......

2. I know you say to not trade more than 2 stocks in the same sector, if there were for example 10 in a sector & looking for no more than two, how do you specifically choose which ones to trade? Please note I have already taken into account that they have enough volume and that the intra day movement is not excessive for my stop management. How many stocks do you have in your watchlist? How often do you review the ones which are not in your watchlist? It can be a real time consuming job, so I would like to follow your advice.
regards
Nick"

My reply was:

"Nick - it's good to hear from someone who is not accusing me of there being 'no trades to be found'!

I started by going through the stocks from £200m upwards. Once I had 30, I refined down to 20. It's an ongoing process of course. Nowadays I watch maybe 100 over a month - it takes very little time once you know what you're looking for - mentioned in a recent wics if I recall. Be ruthless - you can't trade them all anyway.

Re 2 stocks per sector - just use the criteria. Choose which look best - it's that simple.

Re looking at fresh ones, I do that when I need to - not otherwise".

Easy enough really - it's a matter of DYOR as suggested more than once in TTEW and WICS. (Do Your Own Research).

I have not the slightest problem in commenting on a chart if you ask - but tips are not part of the plan - and Nick above is certainly not seeking tips when he contacts me, as he does from time to time. He well understands that "trading teaching" is what this whole thing is all about, as indeed does the second correspondent below - and they both take advantage of the service in its true spirit, I'm happy to say. Here's the email in question and my reply:

Subject: Re: Cookson Group (Video clip 1261)

"Hi Ian,

With regard to the clear sell below 800p I can see the support and resistance along here, whilst below there was scope for a fair drop, but is this all there is to it ? Was there no chance of a whipsaw since the dmas were not right and they weren't going sideways? I still seem to be confused as to when dmas are and aren't relevant..
Regards
Ian."

My reply was:

"Ian - I understand your concern re dmas. It's hard to be specific because each chart 'does its own thing'. Cookson had such clear resistance in Aug - Oct 07 that its subsequent failure to get very far above, suggested that was as far as it was likely to go, so a sell seemed fair enough to try. Don't forget that I'll often try out a trade with a small stake, & if it goes OK I'll add to it. If I get whipsawed, I was wrong - which bothers me not a jot. Don't forget too that 50% of my trades are expected to lose - although over the past 3 years or so that has been only about 40%. Finally, don't forget that dmas are an indication only, as are all patterns. It's a matter of trying to interpret the entire chart and asking "where will the sheep be happy/unhappy?" DMAs are entirely relevant when they begin pointing the 'right way' - then you look for reinforcement. But where other things are clear, DMAs per se take a lesser place - as mentioned previously, in triangles/channels/trend changes, almost by definition they will be 'wrong'."

Anyway, I hope that sharing these emails may help you a little - in a nutshell, if you're finding some of the WICS and video charts a tad confusing, then stick to the basics of the manual until you feel comfortable with that. On its own it will give you plenty of viable trades. WICS and video comments can ONLY be 'more advanced stuff' when you think about it - but that doesn't make it necessarily 'better' stuff! It might just give you more insight and move your understanding forward a wee bit. But nobody is forcing you to read it/view it!

OK - on that note let's look at a couple of charts, and remember that the video clips too are part of the overall package. Today we'll update our previous look at Mapeley because it is revisiting its support area, and then we'll ask whether Logica is now a 'good buy' because it's dumping 1300 costly European jobs and hiring in India instead....There's a bit of resistance at roughly 200 but....Finally we'll have a wee look at what my Scary Granny's crystal ball might be making of the United States market - and that's that for today. Wall to wall sun, bees buzzing around the apple blossom - time for a wee aperitif on the terrace methinks, and I'll see you again next weekend.

Happy trading until then,

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'.