The little engine that could. Thu Aug 27

A couple of days ago I was musing about the relative underperformance of the Xjo index versus the major US indices. The Xjo, or S&P/ASX top 200 index, is still nearly 2% below the high of 4509 reached earlier this month, but the impression I get is that we're climbing a wall of worry and will just about make it. It could be a close run thing, though, because more and more of the major stocks have lost all momentum. Here's Rio, for instance.It had one surge to a new high from early July on. Can it fire up again? Obviously, yes, it's possible but you might expect a deeper retracement first. The same goes for another top 20 stock, Cba. The other 3 major banks are stronger but not much and could easily make a slightly lower high.

It's nearly 11 am and the market is down 26 points after the US finished unchanged. Generally, banks and property trusts are performing better than resources and cyclicals.

1.17 pm Gunns has pushed as high as 114.5 which is a break of the recent high. I've taken the opportunity to buy a few more at 114 as it now looks like it can plausibly run in the next day or two.

Meanwhile Ehl is the best of my positions today, up 5.5 at 82, while Ppx has given back 2 to 62. I thought about selling out a few earlier as the 60 minute chart stalled but my key trading weakness is not holding on to winners for long enough so I did nothing. I'm not going to be rigid about this though, selling out a small portion of a trade straight after a big surge is a reasonable thing to do.

2.46 The market has held well today, outperforming the region to be almost unchanged.

4.17 The market did very well to fall by only 4 points against the backdrop of 1% plus falls in Hong Kong and Tokyo. I did sell a few Ppx at 65.5 (v 58.5) as they renewed the rally. I also sold out half of the Gff for an average just under 149 (v 147) after deciding it's more of a trend channel type situation rather than a breakout. I added Charter Hall, a property group as they had a delayed reaction to a slightly disappointing result two days ago which has been followed by reasonably positive broker analysis. Long at 53 as they edged past the top of the recent range and closed right on it with their highest close since mid June.