The market is up 3. The SFE Futures were up 60 this morning.

The Dow Jones closed up 322 overnight despite a series of poor economic releases. The market is running on hopes that Federal Reserve Chairman Ben Bernanke will announce a QE3 package during his Jackson Hole speech on Friday. Bernanke announced the QE2 initiative at the same conference last year. The NASDAQ closed up 4.3% and the S&P 500 up 3.4% with all 10 industry groups higher. New Home sales fell for the third straight month and the Richmond regional manufacturing survey showed a fall in economic activity. Metals were mostly up on the LME, the oil price put on $1.02 to $85.44 and Gold fell $30.60 to $1861.30. The Aussie dollar increased to 105.15c from 103.93c.

In the news today … waiting for BHP’s results after the close.

  • Qantas (QAN) reported a FY net profit of $250m, up from $112m last year and below consensus estimates of $322m. No profit guidance was provided. No dividend was declared. There is some talk around that a private equity group might be looking at the company for the second time in four years. One broker says the rumours are far fetched. QAN down 1.5c to 152.5c.
  • Suncorp Group (SUN) said FY profit fell 42% to $641m due to claims and re-insurance costs arising from natural disasters. The result was above consensus estimates of $408m. They declared a 20c fully franked dividend. SUN up 5% to 757c.
  • Worley Parsons (WOR) announced a 25% rise in FY net profit to $364.2m, in line with forecasts and guidance. Declared a 50c final dividend (26% franked). Patersons describes the result as credible and that the recent sell off in the shares is overdone. WOR up 8% to 2560c.
  • Seven West Media (SWM) is up 15% today after announcing EBITDA of $617.5m, up 12% on last year. Patersons expected $614.2m and maintain their Buy recommendation.
  • Pacific Brands (PBG) said their FY profit, before significant items, was in line with consensus expectations, up 14.5% to $103.4m. They announced a final dividend of 3.1c, representing a payout ratio of 64%. Patersons maintain their Buy recommendation with an 80c target price. PBG up 6.5c to 69c.
  • APA Group (APA) announced their FY operating profit was $108.5m, up 8.1% on the prior year. Provided FY12 EBITDA guidance of $530m-$540m, in line with the consensus estimate of $533m. APA down 5c to 399c.
  • Macarthur Coal (MCC) — Full year profit was $241.1m, up 93% from $125m the prior year, but slightly below estimates of $244m. Declared a final dividend of 16c. The company is currently trading on an ex-takeover basis. MCC up 10c to 1572c.
  • Market Predictions: Goldman Sachs has cut their forecasts for the ASX 200 — they now expect it to be at 4450, down 13% from their previous estimate of 5125. Deutsche Bank expects the index to be at 4550, down from 5100.

There is nothing predictable about the market at the moment, the medium term trend is still down and the volatility is a major turn off. Buy today into a QE3 inspired short covering rally and you run the risk that the US market could be down 300 points tonight. And just how long would you intend to hold for … a day, because anyone holding the market over the Bernanke speech after our market closes on Friday is taking a huge punt that could go either way.

So no, not buying into the rally today and not keen on being in the market whilst Bernanke makes his speech over the weekend, and if that’s the wrong decision in hindsight, so be it. Giving advice and writing a successful newsletter is not about fluking a gain it’s about narrowing the odds, buying stocks with a better than 50/50 chance of making money and I’m sorry, but in this market it’s still 40/60 and even if they were 50/50 it still wouldn’t be the intelligent thing to do.  Read more at Marcus Today.

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