We limited our fall yesterday to 20 points and at 11.35 am the xjo index is up 29 points. Gold, the safe haven, fell overnight while oil and base metals rose.
A quick summary to start.
The spi futures contract is continuing to pull back from the opening but the initial high indicated that it will probably find support fairly soon.
Bhp - closed in adr form at 3053 but topped out early at 2994. Made a small sell signal just after 11am at 2954 but has not really moved since. A buy at 2965.
Fmg -suspension continues.
Ncm - weak on a sharp o'night fall in gold. Broke y'days low of 3208 and rallied only to fall back through just after 11. Now near it's lows at 3164. Nothing yet, but looks like it could fall further today.
Rio - very similar pattern to bhp. There is a chance of continued weakness now, just a few minutes later, and could be a surprise sell at 4705. (bhp at 2945)
Sto - ex dividend 20 cents and only down 5 so net up 15. Ranging.
Wow - finished well y'day and continued early running up to 2855. Is still up 19 at 2837 but is offering no trade right now.
Wpl - made a buy at 3472 just after 11.30. I bought some at 3478 which I cut at 3489 as the stock leapt up to 3508 and promptly fell back to 3480. Now, 3493 and looks solid enough but I felt uncomfortable as I'd missed the signal by 7 cents so felt it was better to look on.
11.57 Here's ncm showing signs of a bullish reversal. A white hanged man after a decent fall of 3.7%. Could be worth taking.
12.00 Funnily enough in the last few minutes ncm slipped back to form more of a doji - slightly white. Nevertheless, a bit of a sign of a turn so watching closely for a rally through 3180. Glad I cut wpl, it's chopping around after peaking, now at 3476. Rio and bhp are still soft. I'm not keen on either sell signal but can see that there is room to fill a gap on the downside so even tho' I'm bullish it'd be worth taking the trade. Rio below.
12.09 Long ncm at 3182. Wow close to a sell at 2826. B'out was at 2812 so I don't expect a big fall. 12.12 Short half size wow at 2825. Tight stop on this. Same in bhp at 2943.
12.16 Short a little wpl at 3461 as it reverses after making new high, and rio at 4693 - again small size esp. as I missed the 4705 level.
12.28 Sold a bit more wpl at 3459 to average 3460 and have been nibbling at my existing positions as I'm not really convinced by any of them! Ncm near a cut. I did sell half at 3180 and now at 3166. Obama is speaking at 1pm giving more info on the bank bail outs so I guess the market is drifting back to neutral ahead of that.
12.37 Closed out bhp and rio at 2934 and 4688 as 1pm approaches and wow at 2817. I've got no cuts but have so little conviction that I think it's safer this way. Still long a little ncm and short some wpl. I probably like wpl best. The chart failed at a new high and reversed.
12.48 Out of last ncm at 3160. New lows now but missed it, may get another go.
12.58 Out of wpl for square. No pos'n now, waiting on news. Most things have chopped although wow surprised with a spike down to 2793 although it's now 2804.
1.08 Still waiting for Obama and the market. Wpl has ticked up but I'm suspicious after the failed high and think it's more likely to slip again later. Bhp, rio and wow are still grinding down but showing potential for a rally.
1.21 Obama is speaking now, no specifics yet, and the spi is bouncing a bit.
1.32 Wow looking like a reversal buy but the trouble is the stop is quite a long way away and Obama is still speaking, explaining to the US public why they have to bail out the banks. Oh well, deep breath, long wow at 2820.
1.37 Long bhp at 2936, close to dealing in rio.
1.52 Dealt a bit too soon. The market is still going nowhere while the speech continues and US futures are indecisive.
2.00 Decided against shorting rio at 4664 on a continuation pattern because of the cessation of meaningful trade while the speech goes on and on. Wpl might have made a lower high which would give a nice sell at 3450.
2.13 Stocks are slipping again post the speech and I've had to scramble to get out of wow at 2804 and bhp at 2914, not great cuts. I still feel a bit bullish which hasn't helped me today.
2.28 A bit of a dud day now as I've been spooked by the chop around the news and a bit too skewed to my market view. Maybe there'll be something sustained this afternoon.
2.35 I ignored a sell signal in bhp at 2918, writing it off as skittish trade but bhp is now at 2893. Wpl has breached my level and tho' I've been agressive I've still missed selling any as it's now 3437. I hope to get some on a bounce back after the stop loss/automatic orders have got set.
2.45 Sold wpl at 3443. I can see room for bhp to rally from here, the discount to the US close is about 5% and the Dow futures are only down 33 points. Could be some buys soon after 3pm.
3.08 Wpl is very thin. Jumped from 3422 to 3453 in about 30 seconds on no volume. Back at 3427 now.
3.38 A rally didn't eventuate and I've just got one position, a small short in wpl which is now 3407. I'm loathe to do much more now.
3.42 Out of wpl at 3412. My trailing stop is too far way so just bought into a rally off a 3400 low.
3.57 A chart of bhp just before the close illustrates the problem with today's trading. I took the short on the break of a consolidation at the start of the 5th bar but didn't let the pos'n run. No real loss as it transpired but then I bought on some flimsy price action - during the Obama speech and lunchtime - and had to cut. This was exactly the sort of trade I'd done well to avoid yesterday. Then my opinions prevented me from taking a perfectly good ross hook short at 2918.
4.01 The wash up is that I lost a small amount, about a third of y'day's result but blew the chance of having a moderately good day. 9 trades, 4 small winners, 3 losers, 2 scratch. The moral of this story is that as a technical trader I can have opinions but the price action is the dominant message. Instead of worrying about the reaction to Obama's speech I would have been better off to follow my signals and perhaps keep position size smaller in case of too much volatility.
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