Morning all,

After beating Jet lag and suffering the English weather, it’s time for a few thoughts. Interesting that our market lost all its gains yesterday,after such a big rise on Friday. I suspect that may be the case in the coming weeks with some pullbacks. The market has roared ahead,with articles in the paper suggesting the glory days are coming back,brokers are breaking out the Champagne and letting the good times roll…now I am not wishing to be a damp squib here but really? A few tentative shoots of optimism and no where else to stick you money and its back on again !!!..I think not but the gains have been impressive so those that got involved early will be happy, as I wrote a few days ago the market is like a party and sometimes those that jump the fence late in the day suffer as they get their undercarriage caught as they go over.

Never ceases to amaze me how at the top of the market everyone gets mega bullish and at the bottom mega bearish…I think Buffet said something about selling when every one else is buying and vice versa..now he knows his stuff,

I did call the market to 4950 by March..well it pretty much made it ,so where to from here…slippage is the word…I think like any Himalayan ascent, we have established base camp, advanced base camp but not ready for the summit..time to climb down and acclimatise for a while I think ,before having another go at 5000.Suggest we may see 4750 before 5000 though! Looking at the chart a 50% pullback is around 4650 to 4700..don’t think it will go that low because of the weight of money argument but 4750 is possible.

Idea of the Day

Maybe time to lock in some profits. Suggest patience on the pullbacks..don’t rush your buying, pick a price you are happy with and stick to it with accumulating stocks.

Things to make more go ‘Now is the winter of our discontent!’

1.Australia has got so expensive, its only when you travel you realise how expensive Sydney is..UK is so cheap comparatively ..at least on some things that is..and for anyone that keeps saying Australian House prices are ridiculous, well, take a look at South East England prices..they are pretty steep and the houses tiny. In fact everything seems a bit like Lego land compared to Australia.

2.David Attenborough has been telling the press that we cannot have infinite growth on a finite planet and anyone who thinks so is either deluded or an economist! Well said David, if you want an example of a country that is bursting at the seams, look no further than here.

3.Zombieland markets gave up significant points today…FTSE down 100 so would expect our market to continue to unwind its overbought position.The pullback should be welcomed but be patient..reporting season is coming and that will throw a few spanners in the works.

All five of Italy’s largest banks are halted currently (all down 8-12% from Friday’s open) as the broad stock markets continue to sink (despite short-selling bans – so don’t blame them nasty bearish speculators). Even more dramatic is the blow-out in European financial credit spreads. The Subordinated financials spread has been on the rise from the first day of 2013 – and has now seen its biggest 3-week loss in over 14 months!

4.There is a lot of chatter about tsunamis of money that has no where else to go but equities..I remember that argument just before the crash in 87…waves of Japanese money that would keep everything afloat..well we know that argument is wrong!

5.How can the most powerful nation in the World not even be able to keep the lights on for an entire football game! Meant Beyonce couldn’t lip sync this time!!

6.Expect to see he RBA rest today with no change in rates which will also sap some enthusiasm out of the market plus the longest running election campaign in history.

7.Zombieland seems to be unravelling a little ..now that’s nothing new but worrying none the less as it will affect sentiment here.Elections in Italy only three weeks away and Greek strikes again with the Islands cut off now for the sixth straight day!As Shakespeare said in Dick three

“Talkers are no good doers: be assured We come to use our hands and not our tongues.”

8.The Chicago Board Options Exchange Volatility Index, known as the VIX, jumped 13 percent to 14.53 today, for the biggest gain of the year and trimming its 2013 decline to 19 percent.

9.Orders placed with U.S. factories increased less than forecast in December, reflecting a drop in non-durable goods that partly countered gains in construction equipment and computers.
Bookings climbed 1.8 percent after a revised 0.3 percent drop in November that was initially reported as unchanged, figures from the Commerce Department showed today.

10.And they have found Richard III its been confirmed…now just Lord Lucan, Shergar and Eddie Obeid’s Swiss bank account numbers to go.

And finally….

An Irish woman walks into an undertakers to see her husband laid out. She says: “I wish he wasn’t in his black suit. He looks so much better in blue. Couldn’t you get him changed?” The undertaker responds: “OK, give me 15 minutes.” She comes back to find two coffins, one with a man in a blue suit, one with a man in black. “Goodness me,” she says, “that was quick”. The undertaker responds: “It was easy. I just swapped their heads around”.

From England with love!

 

Clarence

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