End of quarter. Wed Sep 30

It's a very cautious start to the day after a modestly weak lead from Wall Street. The action is fairly typical though for the end of a quarter as uncertainty about the presence or absence of window dressing leads people to sit on their hands.
I haven't done any trading this morning and my positions have barely moved. It's 11.15 now and the market is down 2 points.
Lynas have announced the details of their fund raising. A one for one issue at 45 cents which would give an adjusted price of 67.5 as the shares were trading at 90 - ie split the difference between the two prices. It's not as simple as that though because there's an additional placement so I'll see the official adjusted price when it re-opens tomorrow.

2.06 This has been the quietest day for a few weeks. No new trades and precious little movement with the market still down 2 points. Vba is doing quite well, up 2 at 44.5.

3.32 Just to shake things up, the market has moved out of a tight trading range, now down 14 points.

4.11 The quarter has ended with the market down 10 points on a quiet day. Now that brokers and institutions are watched closely for dodgy window dressing at the end of quarters, it's possible that it's now the least likely of days in the calendar for anything slightly interesting to happen.

New highs. Tue Sep 29

The penultimate day of the quarter has bought another new high as the scenario outlined last Friday has played out. I don't necessarily see a lot of further upside for most issues - the banks have been the main driver of the market lately - and scanning through my usual stocks it's mainly my recent favourites which are still looking good.

Of the overnight positions, long Ifn is looking ok, up in line with the market at 150 while my short in Ipl is also performing for me - down 4 at 284. Lynas is suspended still as the share issue is lined up.

I've bought back into Bly and Vba at 31.5 and 43 respectively.

Here's Bly.I'd like to see this close strongly so I've only bought half of my intended position.

Vba has broken through previous highs at 43 on its way to a day's high of 44. This has been a choppy rally so far and I'd like to see it gain momentum. I think it's possible but again I've only bought half because I want to wait until the close.

Linc energy is back up to 177 today and just about a buy again. I've been discussing with a friend what went wrong (and right) with my trading in this lately. I was experimenting with keeping a wider stop in the very explosive charts. I realise that I probably had it 100% wrong: I should have a very tight trailing stop in the explosive charts and use a swing stop in the trend channel type trades like Vba. It's slightly academic because I want to only be in explosive stocks and I'm in Vba because I think it can accelerate. Nevertheless, I suppose if Vba chops around for a couple of days I should at least have a wider stop here.

2.38 The market has been in a tight range since it topped out earlier indicating that it could close on its highs. No real change with my positions except that Bly is a tick or so firmer. I'm interested in Mre which has a similar chart to Bly but I think it's a good day away from where I'd like to buy it.

3.27 Mre surprised me slightly with continued strength and a breakout at 97 so long now at 97.5.

4.00 Ouch. Just stopped out of Ifn at 146 (v 144) as it reversed on the day only to see it bounce back into the close. I'm happy to be out but irritated that I didn't go earlier when I put on the Mre trade.

4.10 The market has finished in the afternoon's tight trading range but up 76 points at a new closing high. I decided not to add to Bly and Vba as they didn't quite finish on their highs although they closed quite bullishly. Long Bly, Lyc, Mre and Vba and short Ipl.

I'm having trouble limiting myself to 3 positions. I think the issue is that I get 1 to 2 new trades a day which means I need to be selling out 1 to 2 every day and therefore holding for a 2 day period. It's possible, firstly, that 3 positions is unrealistic, 4 to 5 might cover it and, secondly, that I should be quicker to cut positions. This goes against a lot of trading folklore (and rational theory) but I'm trying to get on stocks as they're surging so if I wait for a trailing stop I'm often giving up most of my profit and increasing - say, doubling - the time that the money is at risk in a particular trade. I'm experimenting with using a simple trailing stop on the 60 minute chart but only when the stock has just been surging.

Losing the arm wrestle. Mon Sep 28

The bears are fighting back this morning and after the surprise up day on Friday, another moderately weak overnight lead has brought the market slamming back by 66 points at 11.26 am. Fortunately, my positions are doing their own thing. Ifn is up 6.5 as it held support and is well bid now. Lnc is holding around 176. I'm kind of stuck here - it's just above support but it could be a while before it gathers some momentum. Lynas is still suspended with no specific news around about their capital raising. Mig is slightly lower and my hope for a move up out of the range was premature.

I suspect that overall we may have seen a short term high although I'd like to see more evidence of a turn. I'm starting to see some tradeable shorts now but they mostly look like retracements in bullish patterns.

Here's Bsl. There's a lower high after a retracement type rally this month. On a smaller scale there a minor sell signal on Friday with the stock trading below 304. I don't see a lot of momentum here to trade with but if the market starts to break down then this could gather pace.

Ipl has a similar pattern. I was briefly short this a couple of weeks ago and while it has fallen it's done so in a choppy fashion - not what I'm looking for. Nevertheless, it's indicative of more and more of the charts around at the moment.

One Steel is more volatile than the other big steel stock, Bsl, and has cracked through 316 support this morning. It's at 309 now. 12.18 I've stopped out of Mig at 152 (v 149.5) and that's the pattern for most of my positions at the moment, a promising set up and no follow through. It indicates that the rallies are long in the tooth and don't have much energy. Lnc has had another leg down also and I'm once again irritated that I didn't stick to a simple trailing stop.

I've looked through more charts and the shorting opportunities definitely outnumber the bullish set ups. I'm planning to short Ipl later on - we've got an attempted rally right now - as I realise that it broke down on Friday but rallied with the overall market only to reconfirm the breakdown this morning.

2.42 The market has rallied a fair way off its lows now; down 40 points from a low of down nearly 70. I sold a few Ipl earlier at 288. I've been fairly cautious about selling too many as I expected some sort of intraday rally, but it hasn't really eventuated.

3.54 I've stopped out of Lnc at 169 (v 178), two days too late and blotting my copybook after selling out half at 198 last week. I'd given it a few hours to rally with the market, which is now down 33 points, but it didn't manage to get started.

4.12 The market has closed with the Xjo index down by 36 points. Ifn is the standout performer for me today, up 7.5 at 147.5. I stopped out of Mig and Lnc. I'm still long Lyc by default as it's suspended and I sold a few more Ipl at 288 in the match as it closed near the lows.

Tired and emotional. Fri Sep 25

Stock markets around the world have been moving in synch, even more so than usual, and they're all looking tired and toppy. Following a moderately weak night in the US and a reversal night for gold, oil and base metals, the Australian market has fallen very sharply on the open.

I've stopped out of Pna at 50.5 (v 52.5) and Vba at 40 (v 40.7). In the case of Virgin Blue, the trend still looks intact so there may be another opportunity to buy this later.

Yesterday I impatiently sold out of Mig and today I've bought back into it at 152 as it looks as good as anything right now.

You can probably see that while yesterday's low matched that of the previous day, there was no reason to stop out. It was one of those situations where I'd missed the chance to stop out of Lnc and I wanted to make up for it somewhere else. Not sensible or logical but human.

10.48 The Xjo index is near its lows, down 54 points, but I'm still leaning towards another new high so although I want to start looking at short positions I'll tend towards caution until the situation resolves.

A 60 minute chart of the Xjo is shown above and my scenario is that the move which started on the 16th and topped out the next day was a 3rd wave with the subsequent action being a wave 4 correction. If that is the case then the index should hold above 4590 and rally back to a new high. I'm cautious because when you get near a market top these sort of patterns tend to be incomplete. For example, it may be that Wednesday's high was a 5th wave which just failed to make it to a new high.
I've cut Pna and Vba with very tight stops but I've given myself looser stops in Ifn and Lnc because they are moving more explosively. I'm not sure if that's a good approach. There's a kind of logic to it but essentially it's driven by the fear of missing out on a big move. Having said that, Ifn and Lnc have fallen to support and held - so far - so the damage is done and maybe I'll get the resumption of the strong trends.
The main story of the day for me is Lynas where the government has asked China Non-Ferrous Metal Mining to reduce their proposed stake to below 50 percent which has prompted them to walk away from the deal. It's probably good for Lynas as the deal was struck at the market lows in March at a price of 36 c compared to the last traded price of 90. However, it means that there'll now be an issue - perhaps 1:1 or 1:2 -at a discount to the last traded price which may not be good for my trading book. Just before the stock was due to re-open for trading with the match price showing the initial trade prediction at 74 c, the stock was once more suspended presumably pending an issue.

12.27 Well, a frustrating couple of days continues. I was stopped out of Vba at 40 and it has reversed to be up on the day. The overall market is also bouncing, just off 25 points now, but Ifn, Lnc and Mig are going nowhere and Lyc is suspended.

1.47 The market is now down a mere 10 points but my positions remain static. Looking through the charts, I don't see anything compelling. Bly is possibly setting up for another leg up but I'd need to wait until Monday.

3.30 It's turned into quite a dramatic day really, up 17 points now. Mig is up a little at 153.5, while Lnc and Ifn are off their lows. Looking at the biggest movers in the top 200 by percentaged gained, there isn't anything shooting the lights out, it's more that most stocks have shifted back up a notch or two, indicating that there's a lot of caution around.

4.14 Nothing much to add. Market up 12 points.

Reluctant to drop. Thu Sep 24

The US market had a fall on the fact type session as confirmation that the fed would hold rates steady at their lows, they would extend the various bond buying programs and that the US economy is recovering were all old news and the market responded by initially rallying then reversing to close down 81 points on the Dow. The overnight report on Fnarena is particularly good this morning. Greg Peel also points out that there is a lot of put cover and the Vix (measure of volatility) is holding up, which indicates that complacency is low and a nasty sell off is unlikely.
The Australian market could have been forgiven for falling 50 points or so after commodites also eased off but at 10.32 am we're only down 18 points after an initial 40 point drop.
I sold out most of my Ifn opportunistically at 146 as it was firm into the opening but tired on the 60 minute chart. I'm trying to buy it back in the low 140's. I've bought some at 143.5.
Lyc is still suspended from trade but there's the suggestion that the China deal may have been approved. I assume that would be positive.

11.57 The market has worked it's way back to a small drop of 8 points. Most of my positions are close to unchanged in line with the general trend. I'm loath to look at new stocks as I'd rather reduce my position size; it's possible we'll get a surprise up day which could create a short term peak.

1.06 I left the office just after the last comment and the rally stalled about then. The market is now down 33 points and I've decided to sell out of Mig. While it hasn't stopped me out, it also hasn't gone anywhere since the brief flurry after I bought 4 days ago.

1.21 Migjudged my exit from Mig. It was strongly bid at 150 but that disappeared quickly and I've stopped out at 149 (v 150).

4.02 No charts in the post today. I've tried to do as little as possible because I'm still looking for a new high. The one thing I did was to sell out of Mig but even that has bounced back and of course, it hadn't broken support. I did actually get a signal to stop out of Lnc but having done well with a speculative exit of a bit more than half of my position yesterday, I've decided to look for it to hold support at around 178-180.
The market bottomed at about 2.30 and is back to a 22 point loss.

4.11 A blip down on the match for a close of down 33 points. I bought most of the Infigen back at 143.5 over the day, having sold at 146.

Normal service is resumed. Wed Sep 23

After a three day pause the trend resumes and the market is up 1.1% at 11.30 am. You may recall that I had 5 positions rather than the preferred 3 but fortunately they are all higher although I still face the problem of which ones to cut. I've sold a few Lnc and Lyc out so my dollar exposure isn't far over limits now. The Lnc selling price averaged 198 (v 178) and Lyc was 91 (v 84).

To add to the confusion I've got another attractive buy signal in Infigen. I've been watching this for a while and stopped out a week or so ago but the stock seems to have clearly broken out today.

There are supportive fundamentals for this breakout because although some analysts are neutral to slightly negative, a couple can see solid upside because of wind farms up for sale in the US which may sell for bullish prices. The weekly chart is breaking out too. So far I've bought about a third of a full position at 142. It's trading at 145.5 right now.

1.35 I'm out of Bly at 31.5 (v 30.5) as it's moving more slowly than I'd hoped and I need to reduce my portfolio size. Bought more Infigen to take my average up to 144.5. Lynas is in suspend now, until Friday morning possibly, as they plan to make an announcement regarding the China deal.

3.47 The market had another kick up in mid afternoon reaching a gain of about 71 points. It has continued to hover around below that and there is not a lot of action with my positions. Lnc fell away after the early gains although it's still up at 193.

I ran through some charts earlier in a desultory fashion as I'm full up and reasonably happy with my book. There are quite a few promising charts although I didn't see anything which I thought was definitely better than what I'm already in. I do like Awc and Pna quite a lot and I've got seller's regret over Bly.

In the end, I've succumbed again to a break of my limits and bought some Pna at 52.5. It's a clear break for this copper and gold producer and not a bad stock to be in with the US dollar continuing weak and copper and gold being two of the best hedges.

4.12 The Xjo index finished a point or so off its high. Part of the reason I'm extra long is that there's a good chance of a new high in the next day or so. The Xjo chart has some room to move to make another new high and get to the top of the trend channel.

On the runway. Tue Sep 22

Virgin Blue looks ready to take off (sorry) as it has broken the 40 level which had held it for a few weeks with 43 up ahead. I'm long at 40.6 although I'm trying to buy some more at 41 which would take the average up. The index, at 11.34 am, is virtually unchanged having clawed back mild early losses as the overnight US lead was slightly negative. I think we were building in more of a fall in the US though so I expect to see some more strength as the day rolls on.

I've stopped out of Bsl at 310 (v 313) after it traded below yesterday's low of 310 and has been as low as 306. Gpt held support at 66 although it hasn't moved far while Mig opened weaker but is close to square now.

Two of the stocks I've been watching, which I think have the capacity to move explosively, are Linc Energy and Lynas corporation. They've both made buy signals and I've bought them both which means I have 5 positions instead of 3. I'm scratching my head trying to work out which ones to get rid of. I haven't dramatically overspent because although I'm looking at stocks up to a 500 price level, my longs are all under 200 and I tend to buy slightly fewer than my maximum dollar amount for these lower priced stocks because they are more volatile.

Lnc has made a new high and although there's always the possibility that it's one of those marginal new highs followed by a reversal, it certainly looks more like a stock in the early phase of an explosive move. Long at 177.

I've written previously about the Lyc chart suggesting that the recent overlapping highs and lows in what is a bullish chart might indicate a larger move unfolding. The stock has been above the recent high of 84 and I'm long at a fraction below that. 1.34 I bought the balance of Vba at 41 earlier to take my average entry price to 40.7. The stock has been retracing and is 40.5 now. My other purchases are going well with Lnc at 183 and Lyc at 86. Although I'm mildly bullish for the rest of the day the market has actually gone nowhere since my last post and is still down 4.

2.50 Still flat as a tack. Gpt has dropped below 66 so it's going part of the way to resolving my problem of too many stocks. I've sold half out at 66 and I'm on the offer there for the rest.

3.15 Stopped out of Gpt at 66 (v 64).

4.09 In general, it was a dreary day with the market never managing to perk up as I'd anticipated. You could be forgiven for getting bearish after the last couple of days but there are still no real signs of a top, just a few inside days and quite a few individual stocks are making buy signals even if it's just the resumption of a trend.

In fact, too many buy signals has been a slight issue for me today because although I stopped out of Bsl and Gpt, I bought Lnc, Lyc and Vba to be over my limit. I then added to the problem by buying some Bly on the close. It was such a nice signal on a day of good signals that I decided to give myself some leeway. Long at 30.5. Just as background, my total position size limit is below the available cash in my trading account and I have unused credit as well, so it's pretty conservative.

Doing the filing. Mon Sep 21

It's a morning for doing the filing because despite another small gain in US indices on Friday, the Australian market is down 21 points at 11.26 am in very quiet trade. It's lacklustre stuff after the burst of volume at the close of trading on Friday. I'm having a mixed morning with my positions, 2 winners and 1 loser. Bsl is up 4 at 316 and Qan is up 5 at 283 while Gpt is back 2 to 66.5, where it was trading before a surge on Friday's match out.

12.05 I'm still watching Transpacific industries and after a shallow correction the stock is making a tentative buy signal. However, there isn't any energy to it yet so I'm in two minds. The company is highly leveraged to economic recovery and is possibly under owned despite the recent issue because of their fall from grace in the bear market. Tpi fell from 1146 (adjusted price) in 2007 to 103 in July.

12.52 The market is continuing to fade and Qan has staged a reversal so I'm out at 279 (v 273).

2.12 I just scanned through the stocks trading below 500 in the top 200. There wasn't anything particularly compelling which I'm not already watching. I'm still long Bsl and Gpt and I'm watching Lnc, Lyc, Mig and Vba. Tpi has slipped away so I've taken that off my list. None of them have broken through but I like Vba the best. There's the problem of the recent issue overhanging but there doesn't seem to be a useful rule of thumb at the moment. For example, Bly has struggled with the aftermath of their recent issue, while Lnc and Gns have shaken theirs off.

I like the way the correction held just above the breakout at 33. It's now forming up bullishly and a break of 40 would be promising, with 43 the next target.

Overall, the market has steadied and is down 18.

3.38 I'm long Mig now at 151 as it has pushed through last Thursday's high of 150. I'm hoping for a surge like in late July.

4.10 Bsl has been disappointing today but is still making higher lows so I'll hold a touch longer. Gpt has had a small pullback; there's a trailing stop set up below 66 now. Mig has spiked up as high as 155 although it has closed at 152 which is still above the break point. The market's down 16 points.

High fliers. Fri Sep 18

The Australian market is having an almost inevitable pullback after the two day surge. At 11.19, the Xjo index is down 37 points and is near the lows. The US market was marginally down last night and commodities were weaker.

Pre-market Linc energy made an announcement that although they hadn't yet sold three coal properties which have been on the market for some time, they have received indicative bids as part of a sale process being conducted by UBS. Apparently, part of the recent strength has been attributed to comments regarding these tenements which may have been interpreted too bullishly. Anyway, the stock fell fairly sharply from the open but is now staging a recovery. I sold out half of my position on the open at 173 (v 162) but I have since bought some of that back at 167.

My other positions in Gpt is slightly firmer at 65/65.5.

Airline stocks are being recommended by brokers at the moment as some of the best cyclicals. Qantas has been making higher highs. It made another buy signal two days back but yesterday was an inside day. I went long at 273 soon after the open and the stock has since confirmed the strength with a break of the August high of 277.

The Virgin Blue chart is also quite positive but hasn't made a buy signal.

So, I've got my three long positions but I'm tempted by both Bsl and Lyc. They are both firmer in a weak market and I think they could rally further.

11.58 I sold out of Lnc at 168. With the earlier sales at 173 and a small profit on the extra stock it ends up being an average sale price of 171 (v 162). I'm still very bullish this and it has been a tricky decision to sell out. I've bought a half position in Lyc at 81, because it hasn't quite confirmed the move and because I'm not sure what my target is here.The 60 minute chart below shows that I'm just buying a simple resumption of the uptrend so a 3 wave correction would be a problem. 2.02 The market is a few points off the lows, down 44. Despite the fierce rally from Wednesday morning through to Thursday lunchtime, the Xjo is only up 70 points or 1.4% this week while the S&P 500 index is up a little over 2%. I don't know if the FTSE rebalance will affect us towards the close of trading but otherwise I don't see a lot more downside risk today.

2.58 Bsl has pushed through the old high at 314. I'm long at 313 because I couldn't help myself and bought a bit early. It has worked this time but I don't suppose it does on average. Here's the daily chart.

3.52 I'm long Bsl, Gpt and Qan so I'm selling Lyc back out for break even as it's having an inside day which is where it trades within the range of the previous day. Bsl has been as high as 317 but is struggling to clear away from the 314 breakout level.

4.11 Huge volumes on the close as the rebalancing goes through. Bsl got knocked down but still outperformed the market, I'm hoping the pressure will be off the stock now. Gpt finished strongly at 68.5 and Qan held most of the gains to finish at 278. Sold out the last of the Lyc at 82 in the match.

Switching horses. Thu Sep 17

Another very strong day with the index up a further 62 points at 11.17 am after the September index futures contract expired as the last group of stocks matched out this morning.
I was tossing up which of Ppx and Sbm to cut last night and left it hanging. Early on, after gold had failed to rally any further than where it was at the end of our session, Sbm looked like it could run. It had no follow through though so I cut the position for square at 31.5.
Ppx was going nowhere either so I cut that too at 65 (v 65.7) especially as the explosive move I was hoping for in Linc Energy started up. I managed to get set at an average of 162 here.

Lyc is struggling to get through the old high of 84 and although I'm tempted to tip it out, the very similar chart in Mpo has made me pause for thought. Here's Molopo's daily chart.
If you compare it to that of Lyc it's apparent that they're very similar and the action in Mpo would suggest there's more room to move.
Both charts are unusual in that the stocks are rallying sharply despite the pullback lows overlapping the preceding highs. This is uncharacteristic of a trending stock except where it's the start of a larger scale pattern which would imply a big run.

11.31 My third long position is in Bsl. There was a lot of Spi related turnover which matched at 307 and the stock has since clawed its way to a gain of 3 at 312. The chart looks hopeful but once again, I realise that I might have been wise to consider two stocks which were on my watch list yesterday in preference to this. Here's Bsl.

The others were Awc....

....and Map. In the light of this morning's action it would obviously have been better to buy either of the others which are up 5.2 and 4.3% respectively compared to a 1% rise for Bsl. The point to notice is that they both closed at a new short term high giving a buy signal while Bsl is still short of its buy signal at 315. Awc is the better of the two breakout stocks because it cleared resistance well before the close which would have provided the opportunity for a good intraday gain.

Anyway, although this is the sort of thing I'm always looking at, it can be quite easy to have blind spots once you've got into a trade and be unwilling to switch into a better one. Trying to stick to 3 positions seems like it could be a good discipline and I'm happy to work out where I can improve. Having said all that, I'm quite confident about Bsl and I think it's too late to get onto either of the other trades.

1.10 The Xjo index is on its highs, up 99 points at 4749, after another day of the fomo (fear of missing out) rally. Bsl and Lyc are stationary but Lnc has pushed up to 175.5.

2.13 Lyc has tipped my hand and I'm stopping out at 79.5 (v 74.5) as the 60 minute chart just made a sell signal and the daily is a biggish reversal bar on a strong day. I still like it, mind you.

3.43 The market has been pulling back over the last hour and is now up 65 points. I was concerned that Bsl still hadn't broken, in fact it retraced to 307, so I'm out for square now at 309. I pre-empted a break which hasn't happened. I may get another chance at 315. Just long Lnc now but I'm looking at a couple of potential buys.

4.10 I'm not thrilled about buying property trusts generally but they are running at the moment. Gpt has closed at a new high and I've gone long at 64. I suppose I'm looking for a quick burst to 70.

The market has closed up 65 points. Long Gpt and Lnc.

Channel surfing. Wed Sep 16

The Xjo index has surged to the top of its trend channel as another solid night in the US, allied with strength in commodities, has pushed the index up to as high as 4640 which was a rise of 99 points. We're slightly below that right now, at 11.35, but still very strong.

I saw the writing on the wall fairly early and bought a few things. I was stopped out of my shorts too; Ipl at 309 (v 300.5) and Map at 247 (v 241). The first of the buys is in Linc energy. I'm long at 153 as the stock may have retraced its post issue surge and made a higher low. I'm encouraged by this morning's announcement that the shortfall in the retail issue is not going to be taken up by the underwriters. Instead, Linc is going to forego the extra shares reducing the pressure on the stock and possibly squeezing out any shorters who've successfully played that game in other stocks, such as Bly.

Lynas has rallied hard again and it looks like a good entry point after a 3 wave fall. Long at 72.5.

Gold pushed back above USD 1000 again last night and closed at around 1007. Most of the gold stocks look like they may have completed a mild pullback and I've bought back into St Barbara at 31.5. Of my remaining positions, Aix is up 2 at 158 but still struggling. Due is up 3.5 at 166.5, just steady with the market but charting well. Iof is also slightly muted, up 1 at 62.5, and I sold out the extra stock at 62 (v 61.5) as I need to use the money elsewhere. Mah is up 2.5 at 71 and I'm watching the 60 minute chart for a short term peak as I'm not confident that there's a lot of short term upside here.

12.54 Now that the resource stocks are moving again I've stopped out of Aix at 158 (v 163). It's still holding above the 156 support but there are better things around.

1.57 Over the last few weeks I've been thinking about one of my main goals which is to have no more than 3 positions and to trade them in a larger size. Part of the problem with this approach for me is that it can be passive but I'm getting better at limiting my turnover and I'd like to give it more of a go. I've been puzzling over what I think are the best opportunities right now.

2.45 I've sold out of Duet at 165 (v 157) as I'm trying to figure out what my three most explosive positions might be. I also sold out of Mah at 69.5 (v 68.5). In the last hour or so I've bought Bsl and Ppx. I think Bsl has had a correction from early August to early September. Today's action suggests that we've had a higher low which could trigger a nice move to a new high above 340. Long at 309.

Paperlinx is popping up again after an orderly correction which held just above support at 60. I've bought some at 65 and 66 so far. 3.04 At the risk of seeming erratic - hey, I'm a trader - I've cut the Lnc at 151.5 (v 153) for a small loss as I try to whittle down my list to 3 stocks. Now I'm long Bsl, Iof, Lyc, Ppx and Sbm. The market is on fire, up 105 points. As I mentioned earlier, it's up near the top of the trend channel so I wouldn't necessarily expect much follow through unless we move into a real acceleration phase. Another reason to try to focus on quality.

3.21 Out of Iof now at 63 (v 60), despite the chart looking fine, on the grounds of focus.

3.35 I've spent more time staring at the screen today than I have for weeks. I usually find it's a very bad idea and leads to overtrading and fatigue but this time I think I might have achieved something. I'm down to 4 stocks; I plan to keep Bsl and Lyc and sell either Ppx or Sbm. My assistant is long Sbm so I'm leaning towards selling that one. I also bought more Lyc at 76.5 to take my average to 74.5.

3.56 Gold is now up 8 dollars at 1015 and although Sbm is still stuck at 31/31.5, the larger gold stocks are running into the close. I might hedge my bets and decide on what to cut in the morning out of Ppx and Sbm as I've got enough room to hold them both. Baby steps, I guess.

4.12 A very strong day with a closing gain of 110 points to finish at the highs around 4650. Long Bsl, Lyc, Ppx and Sbm.

Austar revisited. Tue Sep 15

I haven't done too much so far this morning as the market is up 31 points after the first hour. So I thought I'd revisit Austar which I headlined on Friday September 4 and then sold after feeling that my entry point was substandard.

You can see from the chart below that it has been a good performer over the last week, one of the best in the top 200.I actually feel better about my trading after examining this again. My entry point was a bit impatient and I probably would have stopped out at about 107 when there was a black bar 7 days back. The big mistake was not to buy the break above 110. It was the obvious entry point, the surge from 96 had paused and it had been a significant level throughout August. The positive I can take from this is that my stock selection is pretty good and I should trust it.

11.20 The rally has been sluggish today and the effect of the rebalancing is possibly weighing on

the market. I have had to cut my short position in One Steel at 332 (v 325). It was high risk but the stop was close so I took the trade.

I would love to have seen this trade below 321, the last lower high, but it held yesterday and could now push up to a minor new high.

Australian Infrastructure is up to new recent highs this morning and it looks like a stock in acceleration mode. I bought Iof in preference to this last Friday but after an inside day yesterday I've got another buying opportunity here. Bought some at 164.

1.50 The early gain of 55 points disappeared and the market retraced 50 points. It has stabilised somewhat to be up 14 points and the rest of the region is similarly placed with US overnight futures slightly lower. I bought a few more Aix, averaging 163, but the stock is only just recovering after losing those early gains. It's 158.5 now. I don't have much to do as I've got a full book and none of the positions require action. I can't see anything compelling enough to switch into either.

4.19 I waited until the close to buy some Mah at 68.5. It looks like a trend resumption after the pullback. I expect it to peak pretty soon so this is a short term trade.

I also bought a few more Iof on the close at 61.5 as they resumed their rally today and made a new high.

I had the same frustrating experience in Aix today as I did yesterday in Lgl where there was a complete reversal with the stock closing right on support at 156. Unlike Lgl, I've decided to hang on to the position because it is on support and has been making new highs. With Lgl, there was always the risk of a lower high.

Overall the market managed a gain of 9 points, presumably fighting the headwind of the FTSE rebalancing into Korea.

Rebalance or retracement? Mon Sep 14

It's 11.45 and the Xjo index is down 46 points or 1% after opening unchanged with a neutral overnight lead but then selling off steadily. Today is the start of the window for some international funds to reweight out of Australia (and Japan) into Korea. This seems to have affected the Nikkei more than the Aussie market with the Japanese index down 2.5% and curiously the Korean Kospi is also down 1%.

This morning I've stopped out of Asciano at 164.5 (v 168.5), Infigen at 135.5 (v 139.5) and the second tranche of Gbg at 98.5 (v 95.5). I've still got the first set of Gindalbie but I suspect I should also sell them out. These sales were all based on trailing stops and Gbg has well and truly breached Friday's low, but I think the stock has a fair way to run so I was hesitating regarding the stock I bought at 86. 95 is a key level here and the stock has now traded down to 94.5 - admittedly on very light volume - so it's looking quite precarious for Gbg.

I bought some Lgl this morning at 311 as the stock resumed its rally on the back of the gold price closing above USD 1000 in New York. The buy signal was at 306, although not much was traded there, but I hesitated at 308 then chased it up to 311. The stock is back to 309 now. I'm obviously running the risk that Lgl makes a lower high here but Sbm and Ncm - two other gold stocks - did push on to new highs and, muddying the picture further, Sbm has failed to hold the new level.Just stopped out of the last of the Gbg at 94 (v 86).

12.52 The market has edged lower to be down 1.1% and although I don't necessarily think that we're seeing a top here, I am starting to notice some opportunities on the short side. Right now, I'm looking at Ipl, Map and Ost.

1.06 I've gone short 2 of the 3. The first is Incitec Pivot, a fertiliser and explosives company. Ipl had a great run from 214 to 342 between early July and mid August. It had one pullback and then a weak rally which I tried to trade on the long side without any success. That seems to have petered out now and another leg down might take it to 270ish. Short at 301.

The other short is in One Steel at 325. This one just made a double top (potentially) last Friday. The stock reversed rapidly after hitting 345 and closed just above its low at 332. The big if is that it hasn't necessarily peaked. Trading below the previous pivot point at 322 would be a good sign.

2.30 After a brief rally the market is again at its lows, down 57 points. I'm long Due and Iof which are unchanged and Lgl which unfortunately has continued to slide and is now down to 304. Gold is slightly weaker but still above 1000 so I'm tempted to hold on. Realistically though, I should acknowledge my mistake in not waiting for the stock to confirm the strength especially as the market was already looking weak. It looks very much like an early peak for a lower high.

3 Out of Lgl at 303 (v 311). Not a great trade but at least I haven't compounded the error by hanging on in hope. Regardless of what happens later, my primary aim with my trades is to get into strong moves and this clearly isn't one (any more).

3.59 I decided to take the other short in Map at 241. I've been hesitating because I'm not sure if it's just correcting the little surge in late August. In the end, I think that it's not often that you get a clear pivot like this without a tradeable move so I've put on a small position.

4.16 The Xjo index closed down 65 points, about 12 points above the day's low. The rest of the region was also weak and the US futures are down close to 1%. The uptrend is still intact though and I've been trying to avoid picking a top in the market. However, over the last week or two there have been fewer upside opportunities so I've put on a few short positions today. They still look like pullbacks though not downtrends.

Rate sensitive. Fri Sep 11

A cautious rally today but we're still holding onto 20 points of early gains. I read an interesting snippet this morning from a strategist suggesting that rates will stay low for a number of years in the US even in the teeth of an upswing. Meanwhile, rates will rise in Australia pushing the AUD higher - this will lead to a lot of offshore money chasing commercial property, with the REITs (real estate investment trusts) having been recapitalized.

This is much longer term than the situations I look at but it is interesting that most of the best charts at the moment are in interest rate sensitive stocks.

I haven't had a lot of joy with my positions this morning. Gbg is up at 102 but off its highs. Meanwhile, I've stopped out of Ehl at 87.5 (v 82.5) and Tpi at 156.5 (v 156, 158.5) on trailing stops. I've added new positions in Duet which owns gas and electric distribution networks and ING office fund, a property trust.

Due is making higher lows and has pushed past 157 this morning, the recent high. I'm long at 156.5. The average analyst target is above 200 and the stock is getting the odd upgrade so broker opinion is supportive.

I was too hasty in Iof and paid the top of the day which was 60.5. It's not a bad breakout though.
2.43 Duet is going very well, I bought some more earlier to take my average to 157 and it's up to 162.5 now. Iof is still below my entry point at 58. I'm a bit irritated because I was tossing up between buying Aix and Iof and plumped for Iof. Here's the chart for Aix. It paused for an hour or two at 159/160 and has pushed on again to 162 whereas Iof has retraced. I don't think there's a hell of a lot between them. In retrospect, Aix is breaking out of a tighter range than Iof so that could have been a clue. I went for Iof because being cheaper there'd probably be more leverage to a move.
4.10 The market is holding on to most of the gains but it's a very subdued day. Today and yesterday have been solidly up but my positions have gone nowhere overall so I'm a bit disappointed especially after outperforming strongly earlier in the week. With the exception of Gbg, which is a stock specific story, the rest of my positions are now in property or infrastructure. I feel a bit naked without a gold stock though as spot gold is pushing back about US$1000 again.