Morning all,

Well we do live in interesting times indeed…Zombieland continues to cause problems and news out of the US that one of its Fed chiefs does not think that it needs to put in QEIII didn’t help matters…well that disappointed some and the Dow lost 115 and our market will follow suit. The interesting news was that The “Rinehart Cowboy” tried to off load 5% of FXJ last night at 50 cents and found no buyers..the FXJ result was a shocker…it’s not looking too flash anywhere..expect to see more downside before a buyer emerges…the other shocker yesterday was QAN which made its first loss in 17 years and importantly cancelled its new planes..poor old Boeing took it badly in the US too…now the problem with cancelling the new planes is these are the fuel efficient ones and the smick ones that everyone else will have and the Public will want..so although the market took it well initially as it saves some money ,it does beg the question about the future! This is one to avoid whereas I think that at some price in the low 40’s FXJ will be worth a look…I would imagine that morale at both companies has been hit hard..the incumbent management seems to have taken a leaf out of Sol Trujillo’s book!!Alan Joyce has done an especially fine job!!

Newsflash-Got this one wrong I am afraid..Big Nath has ditched his takeover bid for WHC….messy…I had been suggesting that around 3.50 there was some upside if it went through..well it’s not going to happen so Mea Culpa…market was right I was wrong! I am now off to whip myself with birch branches!

 

There is some signs of life in the Gold sector at the moment with one of my favourites BDR up to 82 cents…was in the Dog house around 60 for a while but things improving..may even get back to where some clients bought them!

Another one that could be due for a run out of the dog house is ILU which has produced some decent results and may have been treated unfairly..would be looking to buy around 9.40-9.50..I have enclosed some research on this baby so have a read if you get time..

I have been saying for a few days that we look a little tired after such a great run so expect some backing and filling as profit takers step in…I have cautioned clients about irrational exuberance in the last few days as 4400 is the top of the range and seems to be impenetrable at the moment ..expect a 30 point off day..especially given the weak numbers out of China..perversely the market likes weak numbers as it brings on the stimulus package!!weird!

Traders are returning from their holidays in the Northern Hemisphere and are looking at much higher prices..I suspect we may see some selling in the coming weeks as players look to lock in gains..our market will also go Ex Div ensuring interest will wane somewhat…

Things to make me go all Big Nath!

1.Impressive speech in Edinburgh last night from Elisabeth Murdoch and good to see her having a go at the family. Gutsy woman! She should have a drink with Sarah..would have lot to talk about!

2.Bank of China profit growth slows to 5% as economy decelerates.

3.More fun and games in Zombieland as Merkel wants Greece to keep to schedule…good schedule as the economy slips towards catastrophe…in Thessalonia 1250 businesses have closed this year..it will get worse I feel sure…

4.Gold continues to push higher in anticipation of QE III, ECB Stimulus, China stimulus and BOE stimulus!!Wow thats a lot of cash flooding the market..does not seem to be helping the real economy though only the poor old banks!

5.Client of mine says he has had a massive upshot in enquiries for his architectural services …may bode well for housing sector here in a few quarters time.

6.The times they are a changing… “Only three years ago, Mongolia supplied 11 per cent of China’s demand compared with 65 per cent for Australian competitors. But as production at new mines has increased, positions have been reversed, with Mongolia now supplying 45 per cent of China’s needs compared with Australia’s 23 per cent. With mines yet to be commissioned and improvements in infrastructure, Mongolia’s market share can only further increase”Michael Komesaroff SMH.

7.VIX back above 16 again!US Treasuries yields have dropped 5 days in a row..first time since April 2012.

8. Venezuela’s reserves according to OPEC now top those of Saudi Arabia, with Venezuela now estimated to have the largest conventional oil reserves and the second-largest natural gas reserves in the Western Hemisphere. China will soon to become Venezuela’s main trade partner, with oil sales surging 60 percent in 2012.US looks to be struggling to find a way to deal with this new status quo!

9. Clive Palmer is a crack up..he is now giving $250,000 to Queensland Public servants who have lost their jobs for counselling!!

10.Woolies take a hit on its Dick Smith writedown..420m reasons the techperts have stuffed up!Maybe Dick does not do deals!

And finally…the resource boom is dead perhaps ….wish Fergusson had said this!!

‘it’s not pinin’! ‘it’s passed on! This boom is no more! He has ceased to be! ‘it’s expired and gone to meet ‘is maker! ‘It’s a stiff! Bereft of life, ‘it rests in peace! If you hadn’t nailed ‘it to the perch ‘it’d be pushing up the daisies! ‘It’s metabolic processes are now ‘istory! ‘It’s off the twig! ‘It’s kicked the bucket, ‘It’s shuffled off ‘the mortal coil, run down the curtain and joined the bleedin’ choir invisibile!! THIS IS AN EX-BOOM!!

Thanks John and Michael…

Have a great weekend

Clarence

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