Beg to differ. Mon May 11

The Aussie market is unconvinced by another strong rally in the US and Europe on Friday night. The opening rally was small and quickly turned round. It's 1pm now and the market is down 22 points.

I sold out of my lgl position at 301 this morning as gold is still only slightly up and the stock has no momentum. I'd bought at 300 and 303 so it was a minor loss overall.

Incitec Pivot or ipl has been the big winner for me, up 20 to 255, with the trading above 251 signalling the break of the recent range. I've kept my core position but bought some extra stock at 243 which I sold out at 255 for a handy bonus.

1.10 If I'd dug a bit deeper on Friday I would have seen a comment online from a legal source that the verdict in Fortescue would not arrive for 3 to 6 months, making it much safer to trade in the short term. Fmg has jumped 24 today to 288 as Friday's momentum has continued.

I've bought some stock this morning and traded part of it to take my average price to 276. The 60 minute chart above, shows some resistance at 290. I think it won't hold so I'll look to buy more stock if it continues its rise. The next major resistance is around 334 which was the high back in February.

1.26 I've been thinking about the sort of trades that work now and I realise that since we're in a running market I should be almost entirely focussed on running trades. With ipl and lgl, for example, I'm trying to pick a turning point. I've been lucky in ipl but it's probably unnecessary work because simple breakout trades like fmg are performing so well. During the last 18 months breakouts on the upside have generally been minor 3 wave retracements with no follow through so I got into the habit with my long positions of buying very early in a move because if there was a failure to kick on, which there regularly was, then I could at least scrape some sort of profit out of the move.

2.12 Australia has quite a large savings rate for a Western economy because of our compulsory superannuation legislation. Rarely a week passes without a large ($500m, $1bn or more) capital raising from one of Australia's leading companies and the new shares just seem to get soaked up. There's another one today. Santos is raising $3bn, largely for LNG projects. It's been a godsend for us at a time when other sources of funding have dried up.

2.51 Just bought some Minara, mre, at 77.5. This was trading under 30 in mid March but is running hard and lagging some of the sector. I wish I'd seen it earlier as I would have bought at 73 but the daily chart implies it could be moving into a bigger sort of pattern with the lead in from that March low just being the first wave of a larger move.The weekly for mre, below, indicates the potential for a rally by putting it into the context of the recent fall. The high 5 weeks back was 78.5.

Minara is a nickel producer and here's a chart of Nickel, as traded on the London Metal Exchange, over the same period.

3.10 I bought some more fmg a bit earlier at 289 just ahead of the break of the little resistance point. They've worked up to 295 now.

My book now is long fmg, ipl, mre and a half position in lnc with a small short in qbe. Interestingly, lgl has held and is now looking good again. I've been through the top 200 and I still like it so I've bought in again at 303. My book is getting stretched but it doesn't feel unmanageable. The only position which is doing nothing is lnc but there's good support around 230 so I've got a tight enough cut there.

4.15 Fmg was the pick today closing at 307. I sold out some of the extra stock at various levels to average down my entry price to something like 269. Also sold out some of the core holding in ipl as it stalled at 249 (v 232). Lgl, lnc and mre slipped a little while qbe closed down 2.5%. A good day despite being late into fmg.

A bit more on lgl...the trades at 304 this afternoon broke the highs of last week making last week's low a potential higher low. Lgl was steady in a slightly weak market while Newcrest, the other large gold stock in the top 50, was down 2%. Hence, I bit the bullet and re-entered the trade.