Default option. Wed June 9

The default option is for the market to rally and that's reasonable as the trend is still intact despite slowing momentum. I've been looking for signs of weakness to go with the loss of momentum but in most cases I've been jumping the gun. The US had another flat night last night but resources rallied strongly. We've taken that lead to be up 1.6% at 12.10pm and close to last Friday's highs of 4020 on the Xjo index.

Woodside has rallied close to 2% but Mqg is up 2.3% and Cba 1.5% so although any strength was generally confined to resource stocks overseas, our rally is more broad based. My other short, Bxb, has at least followed the script to be down 3 at 592.

I've bought a few stocks this morning.

The first one is Axa. This ran for two months until early May. I'm theorising that the correction was complete in late May, we've had the start of the next stage of the rally and a small pullback. Long at 391.

Bluescope steel is the second; it's been rallying over the last few weeks and may have completed a correction. I've paid 259 as it traded above yesterday's high of 255.

The other buy was in Macarthur coal as coal miners jumped overnight and fed into our coal sector. This had paused after a surge last week and I paid 702 as it went again. Sold out a few at 739 on a blip up and it's now trading at 718.

1.03 As Mcc, above, reversed I decided to get out for an overall average of 716 (v 702) partly because I think Fortescue is looking very good again. Alumina, Awc, is also looking strong but I need to find an oportunity to buy it whereas Fmg has given me an entry point at 342 as it resumes after a small pullback. The weekly chart shows a couple of significant levels on the chart. One was the 309 level which the stock broke last week while another was the previous weekly high at 334 which went last Friday.

Friday's high was 341 and we've traded as high as 343. I'm long at 341.

3.54 Oops! Got a bit distracted and forgot about the diary. Fmg has run which is a relief because I bought too many, so I've sold out half at prices of 348, 353 and 364. Also out of my Bxb short at 598 (v 591) as the market looks too strong to be short much and this is a bit marginal. I've been incredibly slack with my shorts in Cba and Mqg. I pretty much worked out that they were cactus a day or so ago but I held on in hope and because my downside is limited thanks to my position being held via puts. They've rallied nicely so if I'd merely hedged them I could have covered the option loss and made a bit on top.

Otherwise, my other new positions are going pretty well. Axa is now at 400 leading into the match out, with Bsl at 272 and Fmg holding most of its gains at 360.

4.13 I'd bought a few more Axa at 394 earlier and the stock spiked on the close so I sold out about a third of my positions for 405 (v 392 avg). Also sold out about a third of the Bsl at 275 (v 259) and a few more Fmg at 359 (v 341). The ASX 200 closed up 90 points and finished just above the highs reached last Wednesday and Friday. I'm long Axa, Bsl, Fmg and Wpl and still short Cba and Mqg although with much of the damage done in these two. Thanks to my fresh trades I had a reasonable day and I expect there's room for a bit of follow through tomorrow given that we closed on our highs.