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Morning all,

Yet another night when the Dow sells off into the close..that’s four in a row…my question is, if everyone is long the US then who is there left to buy?…when the fire alarm goes off there will be a rush for the exit I suspect. Yields on Ten Year Treasury’s hit 2.8% last night as good ISM manufacturing numbers brought the dreaded Taper back. Losses in the US gathered pace towards the close and the Zombies were  weaker too..The big casualty of Taper talk last night was silver which got hammered 4% or so, as did Gold although not quite so bad but looks like 1200 is a reality and 19 on silver. In fact the only thing that went up last night in commodity land was oil…everything else weak and base metals down too…

Now being the early bird that I am ,I was on Sky Biz this morning at 6.30am..note my enthusiasm here..anyway I had the chance to talk to one of the traders on the NYSE floor..god these guys are bulls..I asked him if he was worried that with everyman and his dog long and every perma-bear throwing in the towel ,that there was no one left to buy it…he was not concerned at all..he said there were still plenty of cashed up punters out there with bank deposits and cash waiting for a pullback to pop it into the market..I asked him where the market would finish in 2014…he ,remember he is maximum bullish, has a  target of 17500 on the Dow..I thought he was going to say something far higher than that…his only concern was the US debt ceiling..nothing else…really?Wow I have a few fears about the market!!

Here is a chart of margin debt..hitting all-time highs ..and that doesn’t worry anyone…

20131126_Marg1

Expect another soggy day today as many players avoid getting sucked in as end of year rule offs start to hit…banks will be further pressured in the short term as ANZ court case keeps buyers sidelined and resources will be hit especially gold..they need to start mining bitcons!! BItcons 1150 Gold 1220!!!when will they cross..soon it looks like!!!!

Target at the moment is 5200 on our index and then get back in there and buy Mortimer for Santa’s sake!

Idea of the Day

Still pushing my iron ore barrow…Iron ore at 136 Aussie dollar at sub 91 ..what’s not to like…RIO saying it will cut its Capex by 20%…no help here for the mining services…good for Rio bad for others…the Baltic Dry rates have had a boom time recently as a measure of what it costs to send bulk cargo around the world…this is an indication of the demand for bulk commodities..it is pretty strong! Today the iron stocks will get a little blasted as commodity stocks weaker overseas but this could be a buying opportunity if BHP get below 36…RIO around 64 and AGO around 105.

bdi_log

Things to make me go mmmmm!

Here’s a thought as Tapering comes up again…according to one source there are 1.3m Americans about to be reclassified in the Unemployment numbers…no longer unemployed as Congress has not enacted emergency aid..so this may drop unemployment 0.8% the experts warn…of course this is all B**ls*t….there are now 91.5m Americans NOT in the labour force..participation rate is the lowest it has been since 1978…62.8%….reckon they have all set up crystal meth labs in the desert!

Labor Force_0

Just as well the Dow is close to an all-time high!!

RBA meeting today..my money says no change to rates….in fact I suspect that we will get no change for a while..the RBA will be pretty happy with how things are panning out…feel good factor from property rises helping domestic economy..lower dollar helping local manufacturers and retailers…whats not to like..expect some more jawboning on the dollar to get it below 90 cents..

Looking forward to seeing Dickies come on tomorrow…should be very interesting and Channel Nine later this week..have to say haven’t exactly been asked for access to these floats by clients so maybe it’s all insto buying!

Amazon is testing drones to deliver small packages…great for headlines but in my experience of drones the battery life is terrible…after 6 minutes they come flying back to you at a rapid speed and then pile into the ground as they don’t have enough power to stay up!!Long way to go with this technology…then I guess Amazon will have to buy masses of sites for storage of parcels before the attack of the drones…great PR- crap idea!!

Ukraine getting worse although Putin has told them that “local events are not a revolution”..I repeat “ local events are not a revolution”…amazing that a country would revolt about NOT joining the EU..most of them are dying to get out if they could!! These unstable events are helping the oil price as Ukraine is the gateway to Europe for Russian oil and gas…

News today that Sharks can make it over the shark nets…really? Who would have thought they could evade such a high tech way to stop them… Almost 4000 sea creatures have been caught in shark nets lining NSW beaches in the past 20 years. Of those, only 100 were great whites and 49 were tiger sharks.

Aurizon Holdings: The Qld Government is to sell a $300 million stake in Queensland coal carrier Aurizon Holdings. Investor sources said the broker was contacting investors on Monday night, seeking bids at $4.71 a share. The offer was priced at a 4¢ premium to Aurizon’s last close.  It is understood the government was not selling its entire stake, but would cap the deal at about $300 million.

GPT Group’s: $2.9 billion offer for Commonwealth Property Office Fund has won the support of two New York hedge funds – striking a pre-emptive blow against a rival bidding consortium led by Dexus ahead of GPT filing its bidders statement today.

Forge: took another hammering on the market yesterday after last week’s savage sell-off. The miner slumped another 17.33 per cent to close the day at 62c on top of last Thursday’s 84 per cent drop, which wiped more than $300 million off its market capitalisation.

Brambles: Recall Holdings to be added to ASX 200 Index after close of trade Dec. 9 following spin-off from Brambles.

MYER: chief Bernie Brookes is hoping a slow start to the Christmas shopping season is a result of consumers leaving their gift-buying to the last minute. “It’s still pretty patchy,” Mr Brookes said.

And finally….as it was St Andrews Day over the weekend

Did you hear about the thoughtful Scotsman who was heading out to the pub?

He turned to his wee wife before leaving and said, Maggie – put your hat

and coat on, lassie.

She replied,  Awe Jock that’s nice – are you taking me to the pub with you?

Nay, Jock replied, I’m switching the heat off while I’m out.

Have a great Tuesday..

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.

 

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