What was that song again, that we spoke about last weekend? "How high's that ol' debt level, Adam? - He said it's £20.6 billion an' risin'....." Yet Adam & co are still at their desks, despite 'shock' that the borrowings from the Bank of England have risen so high, so fast. Seemingly the mortgage book isn't quite as healthy overall as had been (and is still being) claimed - as if that is some kind of revelation. Northern Rock had been lending to just about anyone capable of a bit of basic form filling, whether via mortgage, credit card, or unsecured personal loan - and the only surprise to Williams is that the shares are still hanging on to a bit of value. Yet despite all the 'credit crunch' talk and the handwringing by the Bank of England and the Darling stooge, many lenders are even now looking at relaxing their criteria after a brief flirtation with tightening them......and that is scary! The big problem of course is that everyone believes 'someone' will bail a bank out if it goes belly - up, as per NR, so nobody at many other lending institutions is taking this mess seriously enough. And all that will happen as a result, is that the final mess will be too big to be cleared up in any satisfactory manner. Ah well, there will be major property bargains to be had in due course - certainly in the USA, UK, Spain and Eire, and maybe even in France too as thousands of British or Irish - owned second homes there, need to be disposed of to meet debt obligations at home.

One of my Irish contacts (pretty high up in a major lender there) tells me he's very concerned that loans are still way too easy to obtain in the Emerald Isle. For example, Permanent TSB is currently advertising its 'Ice' credit card in a highly aggressive manner - yet seemingly that institution is sitting on a very high number of repossessed houses that it dare not admit to, much less put on the market, for fear of triggering a total price meltdown - as may well be the case with all Irish lenders. It appears a lot of ex mortgagees are now simply tenants of their lender, and to all external appearances it's business as usual. Hmm - given the ongoing extra costs to American companies (if based outside America) of the falling US Dollar, and given how many Irish jobs depend on said US companies (that located there to get a foot in the Eurozone a few years ago), and given the utterly crazy size of the average mortgage, would Irish banks currently be a 'good buy' or just a 'goodbye'?.....we'll see.

Moving along, it seems the latest 'corporate bonding' craze is to take 'the team' to cookery classes. Not quite paintball nor whitewater rafting then - just a tad more civilised. I just hope nobody in the financial director's department is involved.....cooking....books... oh, please yourselves!

Next, it's interesting to note that the guilty parties from Independent Insurance are to do time - that was an easy prosecution with no vested interests to get in the way of justice, wasn't it? Did I ever mention 'cash for honours' and 'BAE'? Can't recall......

Anyway, next on the agenda is an email from one of you - this time just asking for a bit of guidance with regard to selecting potential trades from a large list of 'possibles'. That's hard to answer succinctly quite frankly - it's something I covered in detail at my workshops and if there's enough interest, I'll run another one next May (probably) near Birmingham. Below there are a couple of charts that might help a bit but as I say, it would simply take far too many charts to do much about it in WICS.

The final thing I would like to touch on again today is 'psychology' - just a continuation of last weekend's comments about 'not caring about money'. The other major aspect of successful trading is OWNERSHIP. You bought the TTEW manual - does that mean you OWN it? "Only on the most basic level", would be the correct reply - in my view. Think about that - a long time ago in WICS (use the search engine) I think I mentioned the word 'osmosis'. Certainly I touched on it somewhere. Buying a course - any course - means absolutely zilch beyond confirming the fact that you have at least a passing interest in the subject. Suppose you have learned to recite the TTEW manual word for word - does THAT give you ownership? 'Nope', as Mr Paxman would say. It just means you really need to consider getting out a bit more. OWNERSHIP means that YOU have a methodology that is truly YOURS. Sure, that might be TTEW word for word, but you only truly OWN it if YOU are totally comfortable with it. In practice, the most successful of 'my' students are those who tweak TTEW a little to suit their own comfort - whether via the use of different moving averages, or by only trading certain chart patterns and ignoring others, or whatever. You might wonder "Does it matter if I 'own' what I'm doing?" The Williams answer (And a message here to 'P' from last weekend!) is most emphatically 'YES'! You know I bang on about 'hot tips' all the time. Tips are for the lazy and the uncommitted, quite frankly. If YOU have followed such things, ask yourself just one question - "What have I actually learned about trading?" Another question that's even more important might be "What have I learned about MY relationship to trading?" And consider for how long you might have followed any one service before jumping on to another bandwagon. If YOU don't actually KNOW the exact 'why/how' a particular trading opportunity has been arrived at then you won't trust yourself in the markets. Think about that phraseology: "trust YOURSELF...." You'll trust a tipster till a few tips go sour, then you'll dump that one and seek another one that "must be THE one this time..." But you will never, ever, become a successful trader till you trust someone you see every time you look in a mirror. It's that goal that TTEW is trying to help you with - but it can only help you, it can't do it for you with no effort on your part! It's always interesting to note that when someone keeps asking the same questions, the answers to which are quite clear in the manual, they fall pretty quickly by the wayside, usually after having sent a final email to tell me "this stuff doesn't work". On the other hand, those who seek clarification of some of my more obscure points (and I accept there are plenty!), and who ask me from time to time to cast an eye over THEIR interpretation of a chart, generally learn to fly solo pretty quickly - which delights me! Anyway, the above has been a bit of a rant, I know - but for all that, it's just sometimes frustrating to me that trading is actually a very easy way to make money, yet so many people just HAVE to believe it to be complex and 'too difficult' for them to master. Listen guys and gals (gals 'get' this idea far quicker than do guys, by the way!) Williams is just a simple country boy - a bit of a redneck in fact - according to certain ungrateful children - yet trading for a living has provided my family with a more than comfortable lifestyle for over fourteen years now, even although the kids have to fund their own snowboard purchases, and leave them outside the house in the hope they get nicked (my hope that is....)

Long past time to move on to a chart or two methinks - first tonight is that of Low & Bonar, which we'll look at twice in fact, by way of highlighting a little about 'choosing potential trades' as mentioned earlier. Then on the same basis we'll examine Numis Corp to see if there are any similarities/differences between the two. And that should be plenty for this weekend - in many ways, my little 'homily' above is of more significance perhaps to your learning process - than are this weekend's charts!

Anyway, must rush - word is a school of big bass has moved in to the estuary so the fishing rod is beckoning....see you next weekend as usual.

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'.