With a bang. Tue June 30

Financial year 2008/2009 is going out with a bang and not a whimper. Following a solid overnight lead the Asx 200 has ralled 1.5% at 11.15 am.

There are quite a few buy signals today and overall it looks like the bounce back could get close to recent highs.

I've gone long Bhp, Ipl and Rio. All of them have much the same sort of chart where there was a big drop over most of June followed now by the first signs of higher lows. The fall in Bhp was more than 10% while in Ipl and Rio it was greater than 20%. Given that the trend of higher highs and higher lows is still intact on the weekly charts I think that even a retracement rally could have a fair bit of oomph to it.

Here's the daily chart for Bhp. I bought on the open at 3435 although the break of yesterday's high of 3460 came a bit later. The next hurdle is not far away at 3475 which would break Friday's high and confirm the signal. I'm quite pleased to get a chance to trade Bhp as it often gaps over a signal giving me a difficult choice as to whether to chase a position or not.

The Ipl chart shows a double bottom yesterday with a trade at 231. I bought on the break of yesterday's high of 239 and paid 242. Confirmation of the break is a bit further away at 253.

Rio is the best chart of the three because it has already confirmed the signal when it traded above Friday's high of 5210. I paid 5225 which is close to the high for the day but so far the stock hasn't retraced much. What I like about Bhp and Ipl is that this is the third attempt to rally in the last 9 days showing that the selling pressure has eased dramatically. In the case of Rio the fall was extreme for a top 20 stock, probably accentuated by the pressure from the rights issue, so that although this is only the second attempt at a rally there's a bit of room to move. A 50% retracement of the fall would give a target just under 5500.

12.04 Brambles is setting up bullishly. It's got a long slow 3 wave correction where the 3rd wave failed to go lower than the first, generally a bullish sign. I slightly overhedged my July 625 puts at 571 and now I'm a little long as the quantity needed to hedge has reduced. I've added a few more shares at 591, confirmation of the break is at 593.

With all this buying I've got too much exposure and more positions than I want to deal with. Cfx has done well this morning, it's up 5 at 168.5, but because it's a relatively small position and not likely to be terribly explosive I'm getting out of it. Sold some at 167.5 (v 167) with a few to go. Of my other longs, Ozl is up 2 at 92 and is charting bullishly so I'm happy to continue running my August 90 calls. Tel, however, has drifted lower as it looks like one or more principal traders at the big brokers have been obliged to take on stock from a keen seller. I'm making that assumption on the basis of 4 crossings of 150 to 250 thousand stock at what looks like gradually declining levels. I had planned to sell my stock at 220 but wasn't aggressive enough to dump it early on.

2.22 The market has drifted sideways in a very tight range since soon after the open. I suppose everyone is waiting for the last half hour or so as things hot up on the last day of the financial year. It's like the middle overs of a one day cricket match with nobody taking any risks until the final slog.

2.43 Out of Cfx at 169 (v 167) while Tel is starting to firm up. Decent lines of stock are still changing hands but at 220 recently so the pressure is easing. I'm still trying to sell some at 220.

3.21 Things are starting to hot up with the Spi moving towards the top of the range. The same basic bullish set up is being repeated in a lot of the top 50 stocks eg Cwn, Map, Nws, Sgp, Sun, Wow. I've chosen the positions a little randomly, perhaps with the idea that the resource sector will move more explosively. I've also added another long position, which is stretching things, in Newcrest. I went early on this the other day and was chopped out but the signal is better now and confirmed the break trading above 3070 soon after I paid 3065. It is sitting around 3068 now.

4.12 Interestingly, the wild action of previous quarter and year ends hasn't happened. It's possible that the warnings about ramping etc from the Stock Exchange have been heeded. I sold out a few Bhp at 3472 (v 3435), Bxb at 596 (v 592 av.) and half of my Tel for square at 218 in a modestly bullish match out.