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.