Patience. Tue Apr 14

Today, on our return from the Easter break, the xjo is up 85 points at 11.30. The peak this morning was a minor new high. I thought that the market was rolling over but it's not happening yet. I still think that the rally is running out of legs in the short term but I was too quick to jump on signs of weakness.

Tol and ncm are my two short positions and they both gave me pretty good warning on Thursday that they weren't as weak as I thought. They've both rallied in line with the market and put me in an awkward position. In tol, I had the opportunity to take a tight stop before Easter and decided to give the stock more room. The problem is that the next point is at 657 but I'll have to deal with that now. The other short, ncm, is less of an issue as the weekly chart is still negative and the situation seems to be that it's a long way from any stop and the stock could keep rallying for a little while longer.

I haven't finished scanning through the top 50 yet but I have put on a trade from outside that group, in ozl. The daily chart looks to have completed a small pullback after the recent surge and given that it made a higher low at 45, I expect another run would quickly take it to the top of the range at 67,68. I bought at 59.

Of my other positions, csl is unchanged while cnm is out of suspension and has risen 4 to 24.5 on news of a financing deal.

12.18 Decided to cut ncm at 2991 as my next stop is too far away. The first one was 2958 which was breached on the open as the stock gapped to open at 2998. It's been a couple of hours now and ncm was showing no signs of failing. This was a dud trade after I shorted at 2834. I've also done a slightly counter intuitive trade by buying lgl at 301. It seems like the gold stocks aren't ready to fall yet and this stock has been under pressure for a couple of days without falling while ncm has rallied 6 or 7%. So I'm long for a quick move to 315, say. Here's the daily, I need a break of 304 to confirm the trade.

12.41 Having run through the top 50 there are a few opportunities around. I bought some Leighton holdings, lei, as it looks like they're on the rise again after a sharp pullback. The weekly chart shows that 5 bars back the stock made a short term peak - at 2096 - and last week it broke through convincingly running as high as 2363 before finishing at the bottom of the range at 2078.

The 60 minute chart, below, shows that the breakout ran from 2050 and held just above it on Thursday.

The open was strong this morning and now the stock is pushing to new highs for the day. I'm expecting a move above the highs of 2360 and I'm hoping that it happens directly. That is, I hope it doesn't fail to make new highs, test the lows again and then run. However, if that happens it could still push up another dollar or so.

It occurs to me I should explain why I think this will go above 2360 soon. Basing my ideas loosely on Elliot wave theory, the momentum of last week on the breakout implies that the stock is trading impulsively. Ie, at least on a daily or shorter time scale, it's not correcting a recent fall but rallying in a direct kind of way. So on the 60 minute chart above, you might consider the rally which peaked early on April 2 to be a "1" wave, which corrected mildly through that day with the next leg up to 2360 being the big 3 wave. The correction, which was deep, shouldn't overlap the peak of the first wave - which it just avoided doing. A wave 5 would then often take the stock above the peak of wave 3 and that's what I'm looking for now.

Just sold out of cnm along with the other tired longs at 23.5 (bt at 19) as the buying on news peters out.

Bought back into lnc this morning at 210. The stock held support and is pushing on again. Maybe there'll be a quick surge above the recent high of 246 and this time I'll take the cash once momentum fades. It's just touched 220. Here's the daily.1.27 Bought iag at 345 on a weekly turning point with the potential for a higher low. I feel a bit trigger happy but there are quite a number of buying opportunities and I'm not taking them all.

I've been thinking about getting long wpl again as I've had a similar experience there as I had in lnc. That is, I held on too long and cut when it was right on support. In both cases, support has held and rather than crying over spilt milk I'm better to concentrate on the opportunity that's there. My problem is that I'm concerned about having too much risk, so I might buy some April or May call options if I do go long.

2.09 Went long wpl by buying april 4000 calls at 84 cents. This means I have a maximum loss of 84 cents times the number of contracts I bought (1000 shares per contract so each 10 calls cost $8400 and give exposure to 10,000 shares) but on expiry day, which is April 23rd, the stock would need to be above 4084 for me to profit. It's 3988 right now. Between now and then the option price will go up and down with the stock price and at the same time will lose value at an increasing rate as time runs out. I think the stock can go to 4300 before then at which price the options would be worth 300 plus a little bit. I'm hoping to triple my money roughly. Here's the daily chart. It held just under 3800 twice so I'm hoping the correction is complete and that the stock can move rapidly back to the recent highs.

4.00 I don't feel that great about today's trading as I'm worried that the market is topping and that I could've gone long near the top.

4.11 Not the best match out but I've stuck with all of my positions despite my misgivings. Just lacking patience at the moment so the best thing to do is to wait to see whether I need to stop out of anything rather than guessing.