Morning all,

Yesterdays rally was far more than I expected I must admit, but just goes to show how oversold we had become. Bounces are always short and sharp in these environments as the elastic band snaps back. Volume once again was pretty woeful at only $3.85bn.The small to medium size companies bounced harder than most as sellers retreated and the buyers gained in confidence. However I remain unconvinced. The main driver of the market was optimism about stimulus in China. Now we are kidding ourselves if this is going to be anything like the recession buster that it was last time around. More likely it’s a move to stimulate the car industry with cash for clunkers scheme so don’t expect great things really.

‘Zombieland’ continues to fester and I might as well cut and paste this on my daily rant for the next ten years, if I last that long! It is going to take a long time for the Zombies to come back to life.
Spain revealed retail sales figures down 11% on this time last year. There is no doubt in my mind that it will be the next zombie to ask for help after Greece…

To our market, after a tentative start yesterday the buyers were in and chasing the yield again…Banks and TLS were strong and the China story helped resource stocks so a good day all round..There were a few clients yesterday berating my advice about selling rallies as I still favour the downside but as most investors adopted the wait and hope approach I am more than happy to be proved wrong. I do not want the end of the World; it’s not good for business after all.
I have always written plan for the worse and hope for the best. I continue to advocate that. The market was oversold and its just taking that elasticity out of the sell down. The range on the ASX 200 is 4000-4400 and it got to 4030 ish ..I had a initial target when I put out my Sell in May call of 4000 so not too bad..didn’t see a 100 point rally so soon ,but you can’t be a genius all the time…gets dull! And people think you are a nerd!
So where to from here, well I feel that we will see the market dip below the 4000 level at some point and remain wary of the rallies..I would like to see more volume but I think that’s a thing of the past.. Investors are scared and even the Computers are all in a tizzy and don’t know which way to jump..is it 1 or 0? who knows!

Few things that made me sit up this morning.

1.faceplant continued their descent..down another 10% and shaping up as the worse IPO ever!Dislike! The options on them came on last night..Puts were the go.

2.Another US giant RIM,the makers of Blackberry,look like they have got themselves in a jam and are looking for options. Expect to see a significant loss and a headcount slashing. Why doesn’t faceplant buy the ,it is after a smart phone business?Oh yeah that’s right they aren’t a smart phone anymore!

3.UK reversal of ‘Pastie Tax ‘pushes a baker Greggs up 6%!

4,Euro at near two year low, as pound rallies to 3 ½ year high against it and UK retail sales best in 13 months.

5.BHP looks like it has put major investment decisions on hold for at least six months…not good for Wayne’s numbers I suspect.

6.Julia Gillard more popular PM than Tony Abbott. Wouldn’t have guessed that!

7.New poll out of Greece says 78% of Greeks say Government must renegotiate aid package but 81% still want to be in the Euro..well you can’t have both according to Moaning Mertle!

8.Serena Williams crashes out of French Open.

9.Irish election coming up on 31st May..should prove interesting as we have all forgotten about these boys!I want Jedward to win!!

10.Kyle Sandilands in trouble again…another surprise!

That’s me for today….

Oh ,did you hear about the Irish lottery for 3,000,000 Euros
The winner gets $3 a year for a million years.

Clarence

XXX

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.