All Ords back in the green for August

They say a picture tells a thousand words. The one above obscures more than it tells. The All Ordinaries rose 1% in August after being down nearly 13% at one point. In fact the index spent 21 trading days out of 23 below the levels of July 31st. So was that short lived dip the correction 'we had to have?' or was it a warning of something more ominous?

As usual I have no idea, August proved that my ability to forecast the short term direction of the market is as reliable as tossing a coin. So why do it I do it? It's just a bit of fun really. Identifying companies with solid economics at reasonable prices remains my first priority.

So what will September bring? Well in the states a labor day rally is on the cards after Bernanke's pledge to do 'whatever it takes' coupled with Bush's move to bail out lenders, sorry I mean borrowers.

Mid month we get to see if the 'Bernanke put' comes into play and around the same time we get a first glimpse at the state of broker earnings and how they have been affected.

In Australia reporting season is all but over, we will hear from the likes of Coles but it won't change the fact that FY07 earnings season in Australia was a cracker. Coupled with a pumping Australian economy things looks good, and that's the problem, it looks a little too good.

No doubt volatility will continue in Septmeber, but if If I had to bet either way I'd say markets will finish to the upside. That could be a good contrarian indicator. Whatever the result the ride will be interesting.