March futures expiry. Thu Mar 19

This morning saw the expiry of the March futures contract for the XJO index. There was the usual spike in volume and following a reasonably positive overnight lead from the US the index has continued to rally to be up over 50 points or 1.5%. Ben Bernanke announced further heavy liquidity injections into the US economy through bond purchases across a range of instruments and that led to a collapse in the US dollar and a sharp rise in the gold price.

The surge in gold has moved both lgl and ncm into buy territory and I've entered small positions in both at 326 and 3255 respectively.

My opinion on ncm is that the weekly move which started below 1800 in late October has probably completed and there's a good chance that any rally from here will fail to make new highs. But the stock is still making higher lows and having had 3 weeks of retracement from the recent high of 3717 there's a good chance that even a failed rally can go to 3400, say. Moreover, if confidence in the US dollar collapses then gold could run very hard indeed and the earlier move might just be the completion of the first phase of a much bigger run.

The daily chart actually spiked through 3240, the breakout level, on Tuesday but I decided against taking it as it was the day when the market ran 100 points on no news and it seemed like there was a bit of a short squeeze going on. After a pull back yesterday it's now bounced right back and looks much more convincing for having had a more complex correction. Here's the chart.
With the 30 minute chart, below, there's an opening gap and it's pretty clear that the stock could fail to run here and drift off to fill in the gap. If that looks likely, I might sell out what I've bought and try to re-enter at a better price. Because I'm looking at a bigger time frame I'm not so worried about entering perfectly although obviously every little bit helps.

For some reason I've taken this rundown out of alphabetical order so here's Lihir Gold or lgl. It has the same sort of 5 wave pattern as ncm but without the same loss of momentum so I'm more confident of seeing new highs here.

The daily chart is more problematic than it is with ncm because there was a daily break on the close yesterday and the opening gap took lgl past 318 the high of the previous week. I decided that the strength in the weekly chart was enough to look past this though I'm nervous of a gap filling retracement.The 30 minute chart shows that despite the opening gap the stock had a very tight range for the first couple of bars. If there were a lot of anxious longs they would have quickly sold it down. When they didn't I decided to jump in and buy.

1.18 It's halfway through the trading day and I've got 6 small long positions in aoe, bsl, ctx, fgl, lgl and ncm. They're mostly a little down on where I've bought them but nowhere near stops. The market has had a pretty fierce rally from a low of 3120 only 8 days ago to a high of 3500 this morning so I'm slightly uncomfortable having bought over the last 2 or 3 days. However, if I have to stop out I'll accept that when the time comes. For me, the hard part about stopping out is when you have to keep doing it. With the slower trading style I won't need to be doing it all the time and the stress levels should be milder.
I'd like to have some short positions for a bit of portfolio balance but although there are some stocks already in downtrends such as coh, csl and wow there isn't anything offering me an entry point right now. It's unsurprising really given that the market is in strong rally mode and many of the financials had set up bullishly over the last few weeks.

4.10 That's the close and it's a mixed day overall. The new positions in lgl and ncm went ok with lgl chopping around and closing at 326 where I got in and ncm racing up to finish near its highs at 3309. Aoe and ctx retreated around 3% but are a long way from stops. Fgl was weak early on but recovered most of the fall and bsl pushed up close to 3%.