Is this really a rally or was that a sell signal?

Algarve: 17 February

Tally-Ho! That often weary hunter chaser, "Footsie", seems to be making ground and even has 6000 in its sights. Could this be the confirmation of a new bull market?

It is, after all, running on, despite the big hurdles put up by incompetent European politicians and indecisive garlic eaters.

Frankly, I don't see it can stay the course. Unless, of course, the Chinese really do step in and bail out we poor beleaguered Europeans. Apparently, there are 500 million internet users in China and close to a hundred million bloggers - whatever they might be.

But they are not as rich as us - per capita anyway. Nor do they yet appear ready to take any form of a lead in establishing a new world financial order. In the end, it will be down to the unimpressive bunch in Paris, Frankfurt and Luxembourg to haul the Greek irons out of the fire.

They probably won't, of course. Rumour has it that the mighty Merkel has been planning for a default for a little while. Painful it will be, but sufficiently well signalled, the pain will be Greek, rather than eurozone borne. And can you think of a better "pour encourager les autres" message to be delivered?

German press (not my usual reading material, I must say, but a little passes my way thanks to the internet) has been suggesting this is the grand plan. Handelsblatt carried a story suggesting Merkel's patience with Athens had run out. But perhaps they are all trying to see who will blink first.

This is not the sort of scenario that makes me want to chase markets higher. Personally, I think the inflation genie has been unbottled and shares will benefit - but in the longer term. Short term I see uncertainty and confusion over the horizon.

Any sensible investor knows that nothing is for sure. After the event you know what you should have done, but in the meantime any profits from the 20% rise we've seen over recent weeks look worth taking. There could well be a better opportunity to get back in after the mist or merde hits the Facher or ventilateur.

Still, at least the cold weather's departed. Freddy, in an uncharacteristically well-timed move, took himself off to Portugal to swing the odd wood or two. He missed the Moscow blast, but returned with a tale of woe from Britain's oldest (and only, I sometimes feel) European ally.

Despite unbroken sunshine and double-digit temperatures, restaurants were empty, shops deserted and businesses closing by the dozen. It wasn't hard to see why, either. Last year's VAT hike to 23% was making Portugal singularly unattractive to visitors.

Putting a motorway toll on the Algarve's main highway hadn't helped either, particularly as the collection process was arcane to say the least. But they're in hock to the European Central Bank and the International Monetary Fund too. At least they haven't incurred Merkel's displeasure - yet.

With the snow receding from the course, I'm off to see if 10 days in the Algarve has done anything to Freddy's game. I doubt it, particularly as he told me he felt he was missing out on this rally and needed to get some money into the market. If ever I heard a sell signal, that was it.

Toodle-pip.