Morning all,

Another drifty sort of night in the US with the Dow pushing up above 14300 for the first time but the rally was not that broad based and focussed on financials whilst the bell weather transportation index was actually down 0.6%..US jobs number were the best in five years on the number of people claiming weekly jobless claims fell by 7,000 to 340,000 which pushed the monthly average down to a five year low. That is good news indeed. ECB kept rates on hold at 0.75% hardly a surprise ..Super Mario was on show last night!

Our market will try to push higher today with a bounce in the things sold yesterday..the big leg up for our market in terms of index is the resource sector…now I believe the worm has turned a little and their time is coming ..in order for the index to really kick up to mid  5000’s we need BHP,RIO,NCM,FMG etc to run.We have seen the first tentative signs of the rotation starting to occur from banks to resources..its not to say that the banks will get smashed but the bank basket which is now over $160 for all four majors..remember it was $100 in September 2011 when I first talked about buying it…at the time the resource basket was 100 bucks too ..BHP,RIO and FMG…maybe the Iron Ore basket would be more like it..well it’s now 103, so not that flash and you can see the upside potential..now if I was a betting man and I’m not, I would be looking at a pairs trade of long the resource basket and short the bank basket…however like the little boy on the Taco ad says ..can’t we have both..why sure you can amigo! And it’s now time to pick up some BHP and RIO and FMG for a rerating in the coming months..

So that’s my call on this the 8^th of March..time to nibble at resources..the World does not appear to be ending but the rally has been confined to the financials so far..it will spread like a spilt coffee stain..they always do!

They say that bull markets are born in pessimism and rise on a wall of worry…well this looks text book!

Idea of the Day

Well my tip yesterday on SFX bore fruit straight away..up 10% after I talked about them…I am sure it was my recommendation that got them going…yeah right..anyway one to continue to watch..

One of my long time favourites is BRU..now I have banged on about this for some time on and off..there was some commentary from BHP yesterday suggesting that they are looking at Shale assets in Australia and in particular the Canning Basin..now BRU are the Canning Basin and with Chevron’s move on the Copper through BPT, I think there is some potential for a corporate move in the Canning…now this one is the most heavily shorted junior oil stock around so it will only take a small amount of good news to kick this baby to 3.00..if you own them keep them ..if you don’t..maybe it’s a good time to think seriously about it..

Things to make me go all Friday on my mind

1.Australia has vaulted ahead of Qatar to become the largest source of LNG to energy-starved Japan for the first time. New figures show that despite complaints from Japanese utilities about the costs and worries over project blowouts, Australia was cheaper than all but six of the 21 suppliers of gas to Japan

2.Copper Miners: rumours about consolidation among Copper Miners have started to swirl again. One potential deal getting an increasing amount of airplay is a merger between PanAust and Sandfire Resources, although OZ’s 18.9 per cent holding in Sandfire would make it tricky.

3.Super Mario has distinguished himself again last night suggesting that Zombieland is on the road to recovery whilst at the same time announcing downgrades to their forecast on the economy..the ECB predicted the Eurozone will shrink 0.5 percent this year, more than the 0.3 percent contraction forecast three months ago. The estimate for 2014 growth was reduced to 1 percent from 1.2 percent.

4.And in an amazing Sir Humphrey moment at a Press Conference he told reporters that the Emperor really has no clothes or at least no idea..this gem from Draghi..After being asked how the OMT mechanism works by an FT reporter…

Draghi: I think by now, and in fact you stopped asking questions about how the OMT works because you understood how it works. I mean we’ve gone through all the conditions that would make a country eligible for OMT, and we said that this would be a necessary but not sufficient condition for the ECB to step in, and we listed the conditions. If you are referring to the legal documentation, that’s another thing, we are still working on it, and it’s coming out but that’s it.. The OMT had never been created to support countries in their access to market; OMT was meant as an effective backstop to remove the tail risk from the Euro area.

And there you have it: Mario Draghi just described Europe’s naked Atlas, who is supposed to backstop trillions of sovereign debt on his imaginary shoulders without even a legal term sheet written .feel better now..I know I do.

5.And across the pond the Fed has stress tested the banks and come up with a clean bill of health..now there is a surprise..as any good lawyer will tell you never ask a question you do not know the answer to!

6.Millionaire mining magnate Travers Duncan has taken the extraordinary step of launching legal action aimed at shutting down the Independent Commission Against Corruption inquiry in which adverse evidence has been given about himself….this is hot on the heels of news the Government ie the tax payer is paying the legal costs of Eddie Obeid and Ian MacDonald..bout $8000 a day each…gotta love being an MP..vast riches and the tax payer pays for your defence..

7. Apple Inc. (AAPL)’s sales for the current fiscal quarter may fail to meet the iPhone and iPad maker’s own forecast as well as Wall Street’s projections, according to Glen Yeung, a Citigroup Inc. analyst.

8.And if you are looking for a supercharged or Turbo charged investment..Classic cars are the way to go.. According to the annual Knight Frank Wealth Report released this week, a ”truly investment grade car” bought in 2002 would have appreciated by up to 395 per cent over the past 10 years. But stick to Ferraris with a 1957 Ferrari 250 Testa Rossa holding the world record for an auction of $US16.39 million ($A16.02 million)..may have to stick to stocks I think myself.

9.And the Bunga Bunga king has been sentenced to a years Jail time..but he won’t be out breaking rocks..but probably in Parliament! He will appeal and that take many years..so don’t expect Silvio to be looking for the soap any time soon.

And finally…..

A woman walked up to a little old man rocking in a chair on his porch. “I couldn’t help noticing how happy you look,” she said. “What’s your secret for a long happy life?”. “I smoke three packs of cigarettes a day,” he said. “I also drink a case of whiskey a week, eat fatty foods, and never exercise.” “That’s amazing,” the woman said. “How old are you?’….”Twenty-six,” he said.

Have a great weekend.

Clarence

XXX

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