Hello again - and welcome to the final edition of WICS.(Fear not -'final' only for those of you who haven't renewed your subscription - the password changes tomorrow afternoon 31st October - if you have already renewed and have not yet received the new password, don't worry because I'll be sending it to you shortly.)

So what's to report today, then? Not a great deal in terms of the markets overall, frankly.

The FTSE100 is pretty much behaving as I suggested the other week, racking around 5200 or so, and I expect another wee rally during this week, maybe as high as 5300 or thereabouts, as fresh buyers arrive, thinking it's cheap enough. Dream on, folks - it won't be 'cheap' till it's below 3000!
Seriously, not only has it already dropped through the final part of the strong uptrend from April this year, but also it's now beginning to probe down through the long (bear market rally) uptrend that began in March 2003. I now expect a bit of a retrace to confirm the position, followed by a fairly sustained drop to its next support area around 4800, where enough new buyers will believe it's a bargain to enable a strong rebound towards 5000. After that plays out, down it goes again, stair stepping towards 3000 over the next two or three years.
There will be quite a few rallies as earlier support areas are reached - that's inevitable - but the overall trend is down now, of that I have absolutely no doubt.
Can't happen? We shall see, but my 'confidence level' for such a scenario, is rising by the day.

By the way, I have had one or two emails recently, asking why I don't talk about the FTSE100 in the manual, and indeed almost actively discourage you from considering it or its constituents. The reason is because generally, such companies demonstrate quite large daily price fluctuations and it can be very hard to trade them profitably, especially during 'sideways' market conditions. I have no wish to complicate your first trading steps any more than necessary. And you know how strongly I warn you about trading indices without enough funds!

However, once you have reached a level of understanding, whether because you are already an experienced trader, or via WICS and the mentoring service, you'll have acquired enough overall appreciation of what's going on, to make up your own mind without any 'censoring' from me.

Many of you regularly ask about FTSE100 stocks, as well as the index itself, so obviously I'm happy to cover that here on a fairly regular basis.

(And another 'by the way', by the way - I also get asked why WICS covers so much that isn't in the manual. My answer is simple enough - if you were a beginner and had received a manual that covered all the WICS material as well as the 'basics', where would you be now? Confused? Probably! But make no mistake - if all you ever do is follow the manual, your trading will be profitable - there's more than enough therein to give you the necessary knowledge for success. WICS is simply the 'advanced course', if you like.)

Oh, and while I'm about it - a couple of emails during the week, both asking a question that I have never before been asked: "Ian, do you draw the lines you use in WICS, on your own charts?"
Yes, is the simple response. And of course, so should you!

Oh yes, and yet another question - shows some of you at least, are really getting into this trading lark: 'What significance, if any, is there in companies buying back their own shares?'
My answer accords with that in the following link:
www.fool.co.uk/school/2001/sch011126.htm
(Please don't ask me to clarify - in the greater scheme of things, buybacks are largely meaningless in terms of TTEW style trading.)

Bits and pieces of minor interest to an old cynic - the final death of Marconi as its remaining paltry assets are taken over by Ericsson - but the service business is being retained and renamed 'Telent'. Just as well they haven't chosen to call it 'Talent'.

And MAN Group are bidding for the 'assets' of Refco. I mentioned hedge funds the other week - we are going to see some very serious shakeouts in that arena, not to mention criminal cases - lots of them over the next few years. Please don't ask for detail - I'm aware enough of the laws of libel! - just keep your eyes and ears open.

Oh, and the French, with impeccable timing, are partly privatising EDF (their electricity board).
They're looking to raise around €7bn, in the face of massive trade union resistance and an imminent stock market collapse. Not to mention the fact that the socialists will renationalise if they win in 2007. Ah well - politicians, eh? They're the same the world over.

Charts this week include Enterprise Inns, the 'lesson' being 'anticipation'. Sometimes, the daily moving averages may well not be pointing as you would 'like' them to be doing, at the stage where an order might be valid to put in place. If something has been developing for a time (in this case, very clear support) then it's perfectly valid to place an anticipatory order. You won't know whether or not it will be filled, but since it costs nothing to place it, what's the risk?

Obviously, once it IS filled, the risk is you'll lose the trade, but that would just be too bad, and part of the overall scheme of things in this business.

(By the way, a few of you seem to think a 'moving average crossover' is a prerequisite before placing any order - my comments above apply. Indeed, a crossover may not happen till well after an order has been filled, which matters not a jot.)

A couple of 'triangles' seem to be forming on the next two charts (Close Bros and W S Atkins) and I offer no further comment than to suggest you look in the WICS Index for 2004, plus WICS of 12th June 2005, to revisit one or two previous references to such formations. Oh yes, and 20th March 2005 for the last time I looked at Atkins.

Minerva showed a nice 'sell', off support at 270 (it went on my watch list from 20th February if you look back) and more recently, would have offered a chance to 'double up' on the break below 240 - or to have entered for the first time if the 270 level had been missed. Nice to see a few of you making a profit from this one!

Speaking about 'watch lists': I see the marriage between Alliance Unichem and Boots caused some brief euphoria, but now reality has begun to set in. Ah well, not made in heaven, then.

Much to watch, of course, as always.. Liberty International, Easyjet, Cairn Energy, Homeserve, Daily Mail & General Trust, Greene King, Michael Page International....hey, stop there, Williams - people can find this stuff for themselves by now!

Anyway, that's yer lot for now (and for good, if you haven't renewed!)

I'll be travelling to the UK at the end of next week, so if you don't get a reply to emails on Thursday or Friday, that will be the reason, and I'll be back online on Saturday again, all being well.

Until then, happy trading.
Ian.

PS: could I please ask you not to send attachments when you are mailing me? I can find charts for myself if you just tell me your question, and clicking the 'reply' button is how I answer your questions. Last week, one of you sent me 9.5MB worth of charts (!) and I really didn't appreciate that one little bit. It's not fair on everyone else.

I note too that a couple of newcomers with ntlworld email addresses haven't yet given me an alternate despite my having asked - how are you going to get the new password, guys?

PPS: Decision taken! After much heart searching, my 19th November workshop WILL be my very last one. I'm looking forward to it very much, make no mistake, but the overall time commitment is just too great when taken along with mentoring, not to mention WICS production. I realise some cynics reckon it's a 'nice little earner' for me, but let me simply say that the entire TTEW project, including everything, represents probably less than 5% of my income after costs, but takes up about 80% of my trading time. Believe it or not - entirely up to you because I feel no need to persuade anyone - I don't do this for the money, but for the enjoyment of talking to fellow traders, and the pleasure of hopefully helping a few at least, to become successful in this most unforgiving of environments. Let's be honest, I enjoy the fan mail as much as anyone would, and I make no secret of that! There are no plans whatever to stop TTEW - I'm having far too much fun overall to even contemplate that, but workshop preparation really does take up huge amounts of time.

Anyway, Streetwise tell me there are a couple of places left for the last workshop, so give them a call if you wish to attend on 19th November. (01709 820033).

Until next weekend then.
IW.

.'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'.