Good morning,

Its a beautiful day in Sydney, the sun is shining and everything in the World is rosy..except the markets..but then you cant have everything..Weak Chinese and European manufacturing data conspired to take the heat out of the markets.Nothing too dramatic and this slow down is hardly unexpected let’s face it so its not time to get too bearish…if you are a glass half full kind of guy ,which I am the US is recovering well and the election will only hasten the optimism and help keep the Dow buoyant,Europe is a basket case but at least its not quiet the Armegeedon scenario that some thought.And finally to China where the rulers are engineering a soft belly landing rather than a hard Terrain! Terrain! Terrain style event.So whats not to like…well I guess we may need to pullback a bit and the likes of BHP and RIO seem to be bearing the brunt.EXpect that to continue for a little longer..however the fall in the Aussie dollar will be a welcome relief for some..lets face it if you can live with 1.10 then 1.03/1.04 is going to feel like luxury.

News last night of a coup in Mali may take the gloss off some of the West African explorers,especially the likes of PIR but may be a opportunity for the brave..Randgold fell 13% last night as they have extensive operations in Mali..maybe the risk there will focus the minds of people on our home grown gold miners..at least there has been no coup in WA just yet..although when it does happen Twiggy will be Front and Centre.

Expect a pullback today ,still not really sure why we were up 20 yesterday but there you go..just wanted to prove me wrong!!

Things that caught my eye this morning

1.Great swell at Avalon this morning!
2.The worst of the euro zone crisis is over and the European Central Bank will act if inflation risks grow, ECB President Mario Draghi said in a German newspaper interview, seeking to ease angst in Germany about price rises.
3.everyone is now blaming Mark McInnes for DJs problems..pretty standard blame the last guy but wont help them into the future.
4.Why is everyone so concerned about the 5th month of PMI contraction in China..why not the 3rd or the 4th!!
5.How does FMG managed to get a debt issue away borrowing at 6.8% if everyone is so negative on Iron Ore…also price holding up very well despite BHP/RIO falling ..corporate action helping I suspect..maybe a takeover in the wings
6.Volumes remain pathetic and brokers seem to be getting a better deal from Bill Shorten which is a good…
7.My wife has informed me that 8 hours sleep is a modern luxury and in the old days before electricity we had burst of 4 hours of sleep..

Expect the market to fall around 35 points today with the SPI down 43 overnight..the good old fear index the VIX is still relatively benign around 15.5 so suspect the correction is a passing phase and not one to be alarmed at just yet.

For those who missed my TV chat last night and I suspect that was everyone..only my Mum watches..I was pushing PSA…US oil and gas play with buckets of cash and drilling soon..undervalued and worth more…buy around 20/21!!For the speculative investor…

Have a good day..I am working from the Avalon office today so my mobile is always on…

Have a good day

Clarence

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