Jittery times ahead then - as of course you are well aware, markets took a bit of a nosedive during last week - and fell somewhat further, and more quickly, than Williams had expected, to be honest. It certainly reinforces the TTEW mantra that you should always try to have a good balance between 'buys' and 'sells'! But next week it will be surprising if things don't bounce back up quite a bit - it was interesting to see housing stocks like Persimmon et al doing just that into Friday's close, despite the fact that in the greater scheme of things, property - related stocks are headed a whole lot lower I reckon - far lower than many of us at the moment might imagine. A trader for a big institution was heard to remark late on Friday (speaking about housing stocks) "The market may not yet have reached its bottom, but in the longer run, anyone who bought today could well reap the rewards - these stocks are oversold..." Ho ho.... As Keynes once famously remarked: "In the long run, we are all dead" - and for sure, the market has an awful long way down to go yet - especially in the case of housing stocks! I suppose though if you're aged about twelve and a hotshot junior investor, these stocks might work out as part of your retirement planning.

Moving beyond property - related businesses (and don't forget these include mortgage brokers and providers, estate agents, surveyors, furniture etc suppliers, roofing material suppliers..........the list is a long one) - we see that as expected, the USA's sub - prime lending meltdown (use the WICS search engine for 'CDOs' and 'toxic waste' as well as 'sub - prime') is rapidly spreading into the economy at large, and is causing a 'credit crunch' of major proportions. Essentially this is happening because to begin with, bonds issued on the back of sub - prime lending suddenly became more or less worthless (as Bear Stearns admitted the other week, starting this particular snowball rolling). It was soon discovered that so much toxic waste had been stuffed into allegedly higher - grade debt, that even AAA rated bonds relating to mortgage debt - the highest quality ones - began to attract no fresh buyers. That in turn has now left some of the lenders very close to having more mortgage debt on their books than their rules permit. And that in turn has given a severe case of the jitters to all institutions (eg pension funds) that normally would be happy to buy blocks of bank - owned debt. And THAT means that a whole lot of these 'leveraged buyout' and 'private equity' deals we have mentioned in the past - eg the Alliance Boots one - have not been completed to the satisfaction of the banks that originally lent the cash. These banks are now sitting with that debt still on their books, because nobody is even bidding to take it off their hands - and I mean NOBODY. The banks are trying to sell it right now, at a huge loss, and there are no bidders - simple as that. The point is that these banking consortia (Barclays and Royal Bank of Scotland in the case of the Alliance Boots deal) orginally lent the cash to the private equity firm, in the form only of a bridging loan to enable the deal to proceed. In order to get the business when everybody and his brother thought that this was the latest way to certain riches, and to grab the attendant massive fees, the banks were offering deals at interest rates below the current base rate - subsidising the cost from said massive fees in the expectation that after just a few months at most, all the debt would have been sold on and most of the fees would still be intact. Now? Well, there are a whole lot of investment bankers who have just seen huge Christmas bonuses disappear back into the ether whence they came. And the bottom line from the above explanation? The Alliance Boots deal alone is now seeing the banking consortium sitting on £5bn of debt they truly do not wish to hold, and the knock - on effect of that is that it's £5bn they can't lend to anyone else. And THAT is a 'credit crunch' - private equity deals, takeover bids - and even the small business seeking a loan to expand - are going to find lenders very, very reluctant to co - operate. I'm sure you can work out how that scenario is going to play out in the markets for some considerable time to come.

Moving along, the latest USA trade figures don't look that awful, till you examine them more closely and realise that annualised consumer spending growth has dropped by 60% over the last three months - a sure sign that the Yanks are finally coming to terms with the fact that they are 'all spent out'. And when you see George W taking part in a discussion aimed at propping things up at USA Inc, then you KNOW things are far worse than they might appear!

Anyway, interesting times ahead, that's for sure. The proposed buyout of EMI will almost certainly not happen, nor will Cadburys be able to auction off their American drinks business methinks - it's amusing to hear the excuse - "We want to give prospective buyers more time...." We'll see.

Scams this week - just the usual suspects as above, and the ongoing 'excessive' overdraft charging thing - it appears the FSA plans to take 'serious action' against Alliance & Leicester - sent to bed with no supper probably.

Oh yes, and another profits warning from Sports Direct - what a surprise.

Moving on to this weekend's charts, let's take a look first at that of Barratts (one of the allegedly 'oversold' stocks mentioned above) - we'll see how it has bounced up (but just a little) off its long term trendline, as so often happens. Then we'll examine the support currently being provided to Jardine Lloyd Thomson along a channel top, and finally we'll update the Minerva chart from July 8th.

And that will suffice for this weekend - please note that I won't be at my desk for a few days from Monday - I have just discovered that my UK registered Jeep that I use in the Irish Republic over part of the 'summer', can't simply be driven over the border to Northern Ireland for its imminent first MOT, as I had fondly imagined would be easy to do given that the place (NI that is) is theoretically still part of the UK. No, not only is there a six week waiting list up there, but also they only deal with cars over four years old - and mine is only coming up to its third birthday. Is that not bizarre? Anyway, bizarre or not, it's a flamin' pest and means a trip at short notice to Wales, being the home of the nearest proper MOT garage. Please therefore keep mentoring enquiries on hold until (say) Thursday, by which time I trust I'll be back, provided all goes as planned.

On that note, best wishes and happy trading until next weekend.

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'