Stock Trader Man

I apologise for not submitting a report for today.

There really isn’t much to do in stocks at these levels. As I have said almost daily we need to see how the critical 8,000 level on the Dow Jones holds up as we seem to be in a range between 8,000 to 8,400…a break either of either level and that will be the next short term trend, so go with it!

I hope many of you acted on my earlier trade recommendation of selling the U.S 10 year futures @ 140.00(yield around 2.28%) to target 3.0% yields. The 10 yr last night closed at 2.87% yield with the price around 117.16. Look to book profits at the 3% yield very soon.This is the new bear market!

This is not “backward trading” as you can see by reading my earlier reports. It’s got there quicker than I thought but it’s there for the reasons I mentioned earlier.

Happy Days and have a great weekend

Dow Jones up 58 @ 8174 (another narrow 150 point range which is a positive as we don’t want volatility)

Gold down $5.80 @ $897.6 (More closes above $900 and the charts are positive targeting $950 near term)

CRB Index down 8.4 @ 218.76 (metals and oils weaker on profit taking)

Oil down $3.8 @ $41.92

The Hindsight.

More bad economic data was shrugged off signalling sentiment maybe, just maybe turning; certainly another close above the 8,000 level presents a stronger technical picture. For those of you who like reading the gory details U.S house prices fell 18% in 20 cities and consumer confidence fell to another record low @ 37.7%(exp’ 42%). The only amazing thing was that 13% of consumers expected business conditions to improve over the next 6 months….who are these people? Must be bailiffs,liquidators and psychologists specialising in trauma/depression. On the jobs front it’s the same old story just new names with ING shedding 7,000 , Texas Instruments and Phillips chipping in with another 17,000. There really isn’t much need to keep reading these dire numbers as the market has priced this in as it “desensitises”. It’s all so Ho Hum. Suffice to say since Obama won in November he will be greeted with an extra 519,895 ex workers.

Now this is funny.

AIG, (the worlds largest insurer,which was recently bailed out by Uncle Sam to the tune of $150bln) has paid bonuses to retain the very staff who lost $34 bln in derivatives trading.By paying them some $450 in bonuses AIG argued they had to keep staff from “being poached and needed them to unwind the positions”. So, I can go out lose squillions of dollars and very nearly take the entire banking system down with me then get rewarded?!….only in America.

And so is this

The Fed announced overnight they will appoint “agents” with the power to renegotiate “Joe the Plumber’s” mortgage to a level which he can live with. Now on pure economics this makes sense as it is crucial that Joe feels confident again, re-starts spending and thus stimulates the economy.But does this mean Joe can now say I want my mortgage rate cut in half and you banks have to write off all my debts? If it does then the gamblers, alcoholics, credit card junkies and consumer queens must surely start putting their hands up! Charles Darwin must be turning in his grave.

Domestic

Our markets rallied strongly firmer commodity prices, a better than expected NAB business survey(although it was very open to interpretation as is most economic data) and overseas banks shares rallying. Today we see CPI which will be ignored. It is expected  down 0.4%, with JP Morgan going for up 0.2%…there always has to be one! As we saw yesterday’s high PPI data(some 1.0% higher than expected) the RBA  will cut rates next week, period. …75 bp is a given with 100bp a 50/50 chance.

The Foresight

The next two weeks are critical for our markets. I really can’t see any new institutional money hitting the market until the banks start reporting. Just how much bad news is built in is debatable but I firmly believe if the banks can only slightly reduce their dividends, say by 10%, then we are in for a major rally. Again, it’s the unknown and stories/rumours that are circulating just need to be put to bed by actual figures. I believe the minimum will be a “relief rally.” It’s a bit like going out on a blind date and you hear your date is really ugly and doesn’t wash, so when she appears and is only below average and has only slightly greasy hair, you then get interested.

Trend Investor Services

I have recently opened an office in the prestigious Riverside Centre(the ASX is 4 floors above me) for Trend Investor as we seek to expand our business from the Gold Coast. We have been trading since 1993. Please feel free to request our “other” superior research which is , dare I say, certainly the best! The Website is www.trendinvest.com.au

Have a great day.

QUOTE OF THE DAY ” Never ask a Barber if you need a haircut”

Edit..

Download Article Snippet

Dow Jones up 38 @ 8,116

Oil down 80 cents @ $45.67

Gold up $15 @ $902.30 ( buy on any pull back, circa $850. Target $1,000

Copper up $10.80 @ $158 (this mother of all indices is telling us something…higher stocks)

CRB Index up 1.38 @ $227.17 (another future indicator)

The Hindsight

OK we finally saw some economic data which was better than expected with Leading Economic indicators (a forward gauge of all economic activity such as housing, retail sales, factory orders, money supply etc) gaining 0.3% (expected to fall 0.2%) and home sales jumping an incredible 6.5% (expected down 4.4%). However this is like seeing a heart attack victim having a nervous twitch; the data will get worse! The key to the next major move in stocks is the Dow Jones around the 8,000 level. We have spent nearly 2 weeks flirting with this level which illustrates just how key traders are viewing this level. As I have said before a decent break and close under and we are in a free fall, any decent bounce and consistent closes say above 8,400 and yep, we are going places; it’s a home run.

U.S Money supply is getting out of control with figures showing it has ominously exploded from 9.9% annual growth in last September to 98.9%. This is pure Friedman economics as when such excessive supply exists then it means one thing; in about 9 months time we will have huge inflation! The smart traders money is not looking at the constant dire economic data but looking at the price actions of the 3 most important markets; gold, copper and U.S 10 year yields. All three have bottomed and are all set for major leg ups.

The Foresight

THE MOST CRUCIAL INDICATOR- 10yr bonds

The U.S 10 year bond is the sale of the century. I have been advising clients to short 10 yr futures at around 140 (2.25% yield) for the past 10 days to target 3%  yield. If  you just sold 1 futures contract you would be already sitting on a $5,000  profit. There is more money on the table. The reckless comments by Geithner directed at the Chinese and their cool response back isn’t good! As the world’s largerst bond porfolio manager, Mr Gross said, “treasuries are way over valued”. Even ex Fed Governor Poole said the Fed is in danger of creating a false market and bubble if they start buying 10 year bonds.  The price action underscores this scenario as yields should be falling(prices rising) when the stock market is collapsing and yet it’s doing the exact opposite. So tell me? What can possibly make T. Bonds rally? Believe me, if you never trade another thing in your life, please sell U.S 10 year futures!

DOMESTIC

Our markets saw a decent bounce on the rallying commodities with the heavyweights leading the charge. I won’t buy anything until I see the Dow Jones move significantly away from that 8,000 level. It’s as simple, yet important as that.

Tomorrow see’s 4th Q CPI data which will show the short term trend is falling and will now allow the RBA to cut rates next week by a minimum of 75bp with the futures traders saying it’s a 50/50 call on 100bp.

For those of you who get the Courier Mail newspaper then I invite you to turn to page 24…I do have more hair than that in real life!

Have a great day and if you get the chance you most see the most awesome film ever made…Slumdog Millionaire. If you’re not blown away then you don’t have a pulse.

QUOTE OF THE DAY: “If you lend somebody $20 and you never see them again then it was money well spent”

Dow Jones down 105 @ 8,122

Gold up $4.95 @ $859.20

Oil down 61 cents @ $42.94

Copper down $.40 @ $138.95

CRB Index down 1.26 @218.69

SPI down 24 @ 3420

The Hindsight

The Dow recovered from its low of 7,940 on nothing. The 8,000 level is being looked at as a line in the sand and we need to get a confirmation on whether it will hold and rally or just collapse through it…time will tell. The “Talking Heads ” will cite housing starts falling 33%(worst on record) , weekly unemployment claims rising 589,000 (expected 527,000) and Microsoft saying not only are they cutting 5,000 jobs but they just simply have no idea on future earnings! Er, can’t you even hazard a guess? Or is it really that bad! Again markets hate uncertainty and if they don’t know then nobody does. Incidentally to all those of you who think you can’t go wrong by buying and holding “Blue Chips” then spare a thought for the investors who bought Microsoft shares in 1988…yep, we hit that same level today!

 Tim Geithner (New Treasury Secretary)

This guy is dangerous. Ignoring the fact that he is running the country’s finances despite admitting personal income tax evasion(Obama wasn’t there someone else you could have picked?) this ex Fed Governor needs a lesson in diplomacy. Saying publicly that China is “manipulating” its currency isn’t going to exactly encourage them to continue to invest in U.S bonds and so finance the monster deficit; you don’t bite the hand that feeds you! I distinctly recall the main reason/trigger for the crash of 1987 was the then Treasury Secretary James Baker saying exactly the same thing about the Germans and their foreign exchange policy on the Deutschmark. Who said history is bunkum!

Anyway,certainly the bond traders agreed by selling the 10 yr bond and pushing its yield up  8bp to 2.63%. As I highlighted all week selling 10 year bonds is the trade as yields will hit 3% soon. I like hearing the bulls say “this isn’t a bubble as investors don’t care about returns ,just safety”, keep talking…….you guys still long that other bubble? Oil @$147 a barrel.

Tim did say something good when he said no banks are presently seeking new help nor do any need nationalising, those words caused the market to rally off their lows. However, the markets needs actions not words and very, very soon so my advice to Obama is stop talking to our Middle Eastern friends and decide exactly how you are going to spend $880 bln.

The Foresight

Our share market was hardly convincing yesterday due to the news from China. This is an economy which will continue to contract and even “implode”, there are already signs of mass unemployment and social unrest…all this will be a major drag in the future. My favourite “Kevin” said it could cost Australia $5bln in exports alone and make this year “ugly and tough”(sounds like my ex). So what do we do trade wise?

1/Avoid the banks. Even sell them via futures/CFD’s. If the UK and U.S banks are losing $50bln plus , do you really believe the likes of ANZ and NAB(huge UK exposure) are going to write down say just 500 mln?(add another 0!). they will get cheaper until we hear from them and their confessions.

2/Sell 10 year bonds in any country(again via futures, its easy)

3/Wait. We need to see how the Dow Jones treats the 8,000 level. Will it be a launch pad or a precipice?

Have a great Australia day.

QUOTE OF THE DAY “I feel sorry for non- drinkers as imagine wakeing up knowing thats the best you are going to feel all day” Frank Sinatra.

Dow Jones up 279 @ 8,228

SPI up 46 @ 3,474

CRB  up 4 @ 219.95

Oil up $2.71 @ $43.55

Gold down .15 @ 854.15

Copper (March delivery) down $7.10 @ 143.35 (BHP saying demand will fall)

U.S 10 year bond yield rose 16 bp @ 2.55%(supply worries plus stocks ralling)

The Hindsight

Only one story and that was the bank stocks rallying. The market in yesterday’s carnage was almost assuming the U.K and the U.S are the same country; the nationalisation of the biggest bank, Bank of America just ‘aint going to happen. Sure the Brits have more nationalising to do who knows how far the government will go, I don’t think anybody does including Chancellor Darling. Incidentally, has the UK collapsed? The pound hit a 25 year low, it appears every UK bank will be nationalised and the oil reserves are drying up…Maggie Thatcher must now  be in a straight jacket.

So the main reason for the rally was the report published showing that the Bank of America’s CEO, Ken Lewis and 6 directors all bought shares on Tuesday around $6.00(closed today @$6.68). Now these guys aren’t stupid(although their predecessors were) as they aren’t going to fork out over $12 mln of their own money if Bof A is going to be nationalised or has fatal funding issues.The cynic in me almost cry’s ” Insider Trading” but its all good as it propelled the Dow higher and caused a “Warren Buffet” style rally. …..Hey Wazza, I know you bought B of A shares about $20 higher a few months back so how about averaging in?

BHP shed 6,000 workers(out of 101,000) and wrote down $1.7 bln. Intel shed 2,000 mostly in the Philippines and Malaysia (buy San Miguel shares?).The worlds biggest miner also cut back production and were pretty gloomy about the future demand but as is always the case, the shares rallied as traders needed to know all the gory details no matter how bad.Take note the Australian banks as these guys have been worryingly silent (apart from raising more capital via selling bonds) and this uncertainty is seeing their shares getting hammered almost day in day out.Guys an idea…… flag to the market about how much bad debt you have and then see your shares recover…we can’t wait till February!

The Foresight

In my previous report I stressed the importance of the 8,000 level must hold to confirm the bottom.Now it is interesting to note we broke through that level hitting 8,735 on Wednesday and have since rallied nearly 300 points. So was that a “false breakout” or the signal for another fall? According to one analyst(I won’t mention his name as my lawyers have enough on their plate as it is) who said the Dow held the 8,000 level, OK, so a close under 8,000 didn’t occur?! I’m truly in 2 minds as I’m sure the day traders pushed it through 8,000 to trigger sell stops(which worked) thus it could be termed a false breakout and treated as such. In conclusion I need to see how the Dow trades over the next few days; if we never return to 8,000 then get long, if we do and close under it for a few days then that confirms we have another 500 points to fall. So the next few days/week is crucial. It will always be about the price action.

I did also advise to sell U.S 10 yr bonds when yielding 2.39%. Today their yields rose (price fell) to 2.55%, a chunky 20 basis point rise.This trade has plenty more to run and I’m targeting the yield to hit 3% very soon. The reasons are many; chart, the supply of debt, the Obama stimulus and the dwindling appetite for U. S bonds from foreign investors (see previous report). Also, and this surprisingly hardly got any coverage (but it is very important) is  the news that South Korea said it has no more interest in buying U.S bonds . Now I can understand the North Koreans saying that but when one of your many financiers pulls the plug (and they have already invested many billions in bonds) it has to cause alarm bells. Lets just hope the likes of China(owns 2 trillion of U.S bonds), Japan, Europe and the Arabs don’t follow suit, if they do then I advise you to literally go into your bunker and stockpile food! The U.S going bankrupt will be armageddon.

Tonight we see U.S housing data and the weekly unemployment claims; they will have no market impact despite what the talking heads will tell you…those guys have to make a living as well!

In my next report I will be explaining the application of Fibonacci and its meanings.

Have a great day.

QUOTE OF THE DAY: “When a man talks dirty it’s called sexual harrasement when a woman does it’s $3.75 per minute”

Lou’s View                    Monday 19th January

Dow Jones up 68 @ 8,281 (remember the critical 8,000 level)

SPI up 10 @ 3,534

CRB up 2.18 @ 221. (This is the only commodity index you to need to watch)

Oil up .11 @ $36.51

Copper up 7.4 @ $152.75 lb (The Nostradamus of all markets)

The Hindsight Stuff

As  I said on Friday’s report basically who cares about the macroeconomic data to be released , we should all know its bad and will get worse although must say the Consumer Sentiment Index was a tad better than expected. Anyway, for the Bears, Industrial Production fell2.0% (exp’ - 1.0%) and CPI fell to its lowest in over 50 years. Just keep reading these dire reports as  they will continue for the next 6 months and you’ll miss the next big move upwards on stocks,the collapse of U.S Treasury Bonds, the fall in the U.S $ and the spike in Oil and Commodities. It’s a no brainer.

Citibank was split into 2 units ,” Citicorp”(retail banking) and “Citi Holdings”(”Asset Management”). Bank of America was given $20bln with guarantees of a further $118 bln. The US treasury will be creating a “Bad Bank ” which will essentially buy all the banks bad debts.The UK Government is going the same way to the tune of 100 bln pounds on condition the banks “come clean” about all their debts, this can of worms will soon be a relief to the market as there is nothing investors hate more than “uncertainty”. Confession is as good for the soul as it is for investors!

The Foresight

Thankfully this week’s economic data is light  the “highlight” being on Thursday with the weekly unemployment claims and housing starts. However more importantly we see the heavyweights reporting their 4th Q figures; IBM, General Electric , Microsoft , Google et al.So this week could be the week we  rally as so much bad news is built in. Analysts (Citigroup) are saying earnings per share could fall by 20% yet stocks are already pricing in falls of 25%.; it will need something truly horrendous for the market to take another leg down.Technically speaking,and more importantly the confirmation of the lows made on November 21st (Dow @ 8,000)were retested on Thursday and proved the Fibonacci 61.8% retracement from the highs was solid. As I have said before any break of this vital, nay make that critical 8,000 level and all bets are off!

There are positive signs emerging “around the edges”.

1/Figures published showed investors sold Treasury bonds in November for the 1st time since August 2007.We need the yield curve to start steepening as it proves economic recovery is coming;certainly the crucial 10 year yield rose last week off its all time lows by 13 bp to 2.32%.Yields and stocks move the same way.

2/The price of copper is 25% of its lows, this commodity is the mother of all predictors. There are signs the recent production cut backs are working with Chinese copper inventories tumbling 30% last week to 15,871 tons, the biggest fall since Jan 24th 2008.

3/Domestically there are signs of recovery in the housing market according to recent data and anecdotal evidence. The RBA and Kevin are making things happen!

4/The Obama package of $800 bln…enough said.

5/Oil prices still sliding and lower interest rates will eventually give the consumer a lift. You don’t need a degree in Economics to know that…I often feel you don’t need a degree in economics period!( wasted 3 years)

These are certainly positive signs of hope and its not wishful thinking.

Today the U.S markets are closed for Martin Luther King holiday. It’s just a great shame he isn’t around to see tomorrow’s inauguration and finally witness his ” I have a dream” speech become more than fulfilled.

Have a great day.

QUOTE OF THE DAY:

“Whether you believe you can or you can’t….either way you will be absolutely right”

LOU”S VIEW                                         Friday 16th January

Dow Jones up 12 @ 8,212

Oil down $2.42 @ $34 .86 (Opec reduced its demand forecast for 2009)

CRB Index down .30 @ 218.9

Copper(PhD in economic forecasting) up .95 @ $149.75 lb

Gold up $8.6 @ $817

Spi up 19 @ 3523

The Hindsight

The U.S banking sector collapsed on fears that Citi needs to be nationalised and Bank of America is seeking loans and guarantees from Uncle Sam to the tune of $150 bln (CNBC sources). It’s almost surreal! …$150 bln. Yet nobody knows who else and by how much they need, not help but actual resuscitation.All economic data is being ignored so tonight’s CPI, Industrial Production and Consumer Sentiment Index will be greeted with a “so what’s new”.

Last night the price action in the Dow Jones was classic Fibonacci. We have previously rallied from 8000 on November 20th which was a 61.8% retracement (the golden number) and yet again we tested it in the early trade and managed to bounce off this critical level 8,000 to end some 200 points higher(as mentioned in yesterdays report). This technical price action isn’t coincidence, it simply illustrates the following and power of Fibonacci levels when traders actually apply it. Believe me it works, rather than guessing or trying to quantify fundamental analysis.

My real concern is if we break and close under this critical Fib’ number then I would expect another 500 points off the Dow Jones very quickly; thus sell any Index future and enjoy the trade! However I believe this has confirmed the double bottom and expect a 20% rally as we did from Nov 20th. Our market also in November hit a low of 3201, a near perfect 50% retracement from the recent highs…again no coincidences just Fibonacci working in the market price action as do his numbers work in the basis of nature and life itself. The guy makes Leonardo Da Vinci look dumb!

Domestically we saw unemployment rise to a 2 year high and total carnage in shares. This is overdone. Think Fib’ and buy…via futures,cfd’s or whatever,just get long we have seen the bottom.The only caveat I’ll put on that is exit if the Dow closes under 8,000. Trust me I’m a Doctor!

The Foresight

We have seen the lows.I’m not going to churn out again why(see previous reports) as nothing has changed only last nights confirmation of the 61.8% retracement. I have never been this bullish on anything in 28 years of trading. If I’m wrong I’ll stop writing and retire!

Have a great one,

QUOTE OF THE DAY ” To be or not to be.”   Shakespear.        “I do therefore I am”  Socrates.              “Do be do be do”  Frank Sinatra

LOU”S VIEW Thursday 15th January

Dow Jones down 248 @ 8,200( please don’t go through the critical 8,000 level!)

Spi Futures down 104 @ 3561

Gold down 11 @ $810

Oil down 34 cents @ $37.44

Copper down $5.85 @ $148.85 lb

CRB Index down 2.98 @ 219.21 (that’s a result!)

The Hindsight Stuff

This is getting like watching a train crash only in slow motion,with “freeze frames” and rewinds showing all the gory detail. For those of you who have seen enough or are even bored by the same old story just a different day, then skip this section.

1/The U.S Retail sales data fell a massive 2.7%(expeceted -1%).

2/Deutsche bank,Germany’s biggest posted a $6bln 4th Q loss.

3/Analysts are now saying HSBC, Europe’s biggest bank by far will halve its dividend and needs to raise $30bln in capital soon.

4/Fed Gov’ Bernanke said Obama’s (I swear one day someone will call him Osama) $770 bln package won’t work unless it is directed at the banks to clear their toxic debts. Hey Ben, just exactly how much do these guys need?You’ve already given Citibank $35 bln, so another $50 bln perhaps? These figures are something out of an Austin Powers movie!

5/Fed’s “Black book”(their own economic research) just couldn’t be more negative, well it could but we don’t want to create a panic, eh guys?

That’s enough(Ed’). OK, expect the horror story to continue for several more months, maybe until 3rd Q 2009, with the most eagerly awaited report tonight coming from America’s bluest of blue chips, JP Morgan. Analysts are expecting a profit of just 5 cents per share(yep, profit!) however the CEO in December said the 4th Q was “Terrible”. Incidentally,the term “Blue Chip” is derived from Monte Carlo’s highest betting chip.

Our market rallied on better than expected housing data and every commentators favourite line “bargain hunting”..that and “short covering” are my favourite throw away lines.Guys, try seeing chart levels being tested or is that all too hard?(like BHP bouncing off a major support line at $30.30)

The Foresight

Another big day ahead with OZ employment expected to hit 4.5% and shedding 20,000 jobs…guess what I think the risk is, try 40,000 after the ANZ’s job ad’s huge fall earlier in the week. The RBA bulletin published (wont be pretty). The ECB will cut rates tonight, 50bp a given with futures pricing in 75 bp.(yep, even this good news is priced into stocks.) Then we have a raft of U.S company reports, the key being JP Morgan. Fridays see’s a raft of U.S economic data, I won’t bore you as we know the score by now.

Within a few weeks our banks start reporting and these will be the most eargerly awaited figures with emphasis on the dividend payments. The guy’s at Merrill Lynch are forecasting ANZ will cut dividends by 11%, CBA by 8%, NAB by 5% with Westpac only doing the decent thing.Again, if true then they are  still offering  huge returns. Stay long ANZ and NAB; reservations on CBA as their domestic bad loan book could be the can of worms.

Yesterday I took profits on SUNCORP @$8.90 (long $7.40)

Good to see UBS taking a 5.1% stake in RHG.I bought this stock for about 30 clients at 11 cents some 5 months ago…enjoy the ride!

Have a great day and don’t look at the screens too much!

QUOTE OF THE DAY

“No matter how far you go down one of life’s wrong roads you must always turn back.” Old Turkish Proverb.

LOU’S VIEW Tuesday 13th January

Closing Prices

Dow Jones down 125 @ 8,474 (biggest 2 day slide in a month)

CRB Index down 9.36 @ 220.55 (The Mother of all index’s measuring 19 of the relevant commodities)

Oil down $2.58 to $38.25

Gold 4.3% to $819

Copper down 9.9% to $146.05 lb

The Hindsight Stuff

Australian stocks fell on very light volume,$538 mln shares(average $800 mln) as resources dragged caused by RIO’s shelving its $2.15 bln Iron ore expansion in Brazil. These guys are doing everything possible to reduce their $10bln debt, even trying to sell its Borate and nitrates for $750 mln(yep, I thought that was a film also) . Also not helping were  the ANZ job ad’s falling 9.7% to “recessionary” levels pointing to Thursday’s monthly employment data being worse than the expected 20,000 drop.

Overnight the Dow fell on analyst’s further downgrading profit forecasts particularly the banking sector, seeing Citibank falling a massive 11%.(and I thought a $10bln cash injection from the sale of its broking arm might just have been heaven sent). As I highlighted yesterday we need to get to February’s company reporting season asap as no investing by the institutions will occur until we see concrete figures,especially on the dividend front. If dividends can be maintained, or even slightly reduced then boy are shares looking cheap! This is underlined by the fact that for the first time in 50 years 10 yr bond yields are under dividend yields…me thinks one of them is very wrong; especially with unprecedented massive amounts of debt hitting investors.

Treasury Secretary Henry Paulson said overnight that the U.S economy is “mired in a very difficult period.”Hey, Hank don’t tell me next the Pope is a Catholic. What is it with this guy, the second he appears on T.V the market goes always goes immediately down.Ho hum.

Saudi Arabia said they will cut oil production by a further 300,000 bls per day, this on top of Iran saying OPEC will cut production further at its March meeting.Just like RIO and other commodity producers this in the long term can only a good thing as supply will soon will soon fall below demand; then we start rallying. Incidentally, Goldman’s predicted oil will hit $30 bl by March.Certainly the price action is indicating this as with the severe northern hemisphere winter, the OPEC cuts and the constant Middle East tension just not having any impact. Another example of the “funny mentals” not working as oil only a week ago was trading at $50 and was being explained away by all the above; so “talking heads” what’s changed?!….apart from your increased salary.

GEORGE BUSH (this will be a one-off!)

He gave his final speech and still insisted the number one threat facing Obama is a terrorist attack on America! George, the “Axle of Evil” isn’t North Korea,Iraq and Iran but the mortgage broker,the bank and the Investment bank. There are no weapons of mass destruction in Iraq(he admitted he erred on this) they aren’t in “Allah Ackba Street” but in Wall street. He was asked if he had any regrets(at this point half the reporters starting bunking down for the night) and replied “Regrets, I’ve had a few….”(please don’t start singing George) and blamed his “intelligence” (er, whose exactly,George) for not believing there were no WMD’s in Iraq….small mistake, just millions of lives lost and a daily bill of $450 a day to still finance. Anyway, good to see the cowboy finally ride into the sunset.

FORESIGHT

Expect our market to open about 60 lower with resources getting hammered on copper/CRB falling. As I said yesterday I’m looking to buy BHP around $30.00, the market should open through that so getting an even better bargain! Indeed, I am now long BHP (the day’s low being $29.92, closed at $30.43) Our market will continue to weaken over the coming weeks until February when 80% of firms report 4th Q earnings(or lack of). No institution is going to jump in now but will do so if things aren’t as bad as expected in February.Its called storm before the calm.So meanwhile get used to more volatility with a downward bias.

QUOTE OF THE DAY: ” The single biggest threat facing Obama is another terrorist attack on America.” George W Bush. (I’m just amazed he didn’t say Osama)

P.S!    Storm Financial going bankrupt just underlines how such highly leveraged business models are doomed to failure. Be aware of others!