Hi guys,Following is a report from brokers which I pay for...

Hi guys,
Following is a report from brokers which I pay for presenting the outlook for our market. Intresting point of view from their perspective.

With the Australian market posting its largest one-day decline in 14 months, readers may be wondering if we still hold our optimistic view on the market.

Last week’s comment by Chinese Premier Wen Jiabao certainly hit resource stocks, commodity prices and the Australian dollar. We have noted on several occasions that all of these were vulnerable, and indeed each had been declining well ahead of last week’s comments. In our last report, we noted that the outlook for the US market was improving and we highlighted the positive price formations on the Dow Jones Transports and the NASDAQ. Those price patterns failed to carry through on the upside last week as the market continued to be dominated by threats of rising US interest rates.

So, given the events of last week, do we still view the markets in a positive light? Yes, although last week’s action has disappointed, and may result in further whipsawing.

We’ll have a quick look at a couple of key points, and then, given last week’s catalyst for the fall in resource stocks, we will move on and have a closer look at the commodity markets.

The threat of higher interest rates remained in the forefront of participant’s minds last week – we highlighted the US 10 year bond rate last week on our feature chart, and noted the close proximity of a significant resistance level – that level has not been overcome. Nor has the resistance on the US dollar…this suggests that in the short term there could be some stabilization as the threat of rising rates abates.

It is a tricky environment, where good news is seen as bad, and investors look for reasons to sell the market. Last week’s sell-off in the US market has brought it down to extremely oversold levels.

As we have said before, markets or stocks can remain oversold for lengthy periods, but given our longer-term positive bias, we would be looking for buying opportunities in periods of weakness. We are still cognizant of the unfavourable seasonals and the 'sell in May and go away' adage, so the markets may spend more time in consolidation mode, but we remain optimistic on the medium to longer-term outlook.

Cheers..