Gold shines. Thu Sep 3

After a modest down night in Europe and the US we've taken a more cautious approach and the market has sold off 27 points at 10.47 am. The best performer overnight was gold, rising US$20, and 7 out of the top 8 stocks in the ASX 200, by percentage gained, are gold stocks. St Barbara mines have rallied to 26 and I bought some extra shares on the open at 25 as it passed the early August high.Lynas is down again as the Australian government has delayed approval of a large Chinese investment in one of the few non-Chinese rare earth producers. Rare earths are used in all sorts of technologies associated with green energy and the Chinese are taking a strategic approach to what may become a scarce resource. Unfortunately, Australia's investment community and our own sovereign wealth fund have shown no such intelligence. The upshot is that the stock has continued to sell off in the face of this uncertainty, although it's probably overdone now as the ability to raise funds has improved dramatically since February. The Australian government will be concerned about a straight knockback because of China's posturing over Rio Tinto so perhaps a face saving compromise may be reached. Regardless, it was a trade where I didn't take an early opportunity to stop out and now have to watch while the retracement grinds away. 11.08 Stopped out of Lyc at 57.5 (v 67.5). I really like this stock but my aim is to get fast moves and if it is to run again I may get another opportunity. I also stopped out of the last of my Tpi at 160 (v 135) as this ticked up early then fell over. This is my ideal of a fast trade.

I've gone long Challenger at 318 on a resumption in the rally. I think I could have waited for a new high at 322 but the short term momentum looked good so I've risked an early entry.It's possible that the momentum may increase, in which case I've got a target around 380; but more realistically (for my time frame) I'm looking at a quick run into the mid 330s.

11.32 Stopped out of Map at 247 (v 252). The loss is reduced because I sold out a few at 260 on the day I bought. If I'd paid attention to my usual trailing stop, I could have got out at 252 on Tuesday...
The market is showing signs of steadying, down 17 now, and Sbm is still running, having hit 27 a few minutes ago.

1.03 My early position in Challenger is working out as the stock is through 322 and is now up to 324. I've added a retracement type position in Ipl, going long at 304. This has had a very sharp pullback from the recent high at 342 but it has broken the last 2 swing lows so the trend is broken and therefore it's a very short term position. I'm targetting around 320 as the stock bounces back from oversold.

2.12 Australia, among other markets in the region, is going to be down-weighted in a FTSE Asian index because of the inclusion of Korea. This will happen on September 18 and brokers are starting to be concerned about passive selling and anticipated active selling as fund managers reweight their portfolios, probably commencing on September 14.

Otherwise, I've got cold feet in Challenger as there's the whiff of a minor new high and reversal. I'm not sure either way so I'm out at 320 (v 318).

3.11 Stopped out of Gunns at 98.5 (v 109 and 114). It's not unusual for stocks to get bid up before issues by friendly brokers and I think I was sucked in here. I still have an eligibility for new stock at 90 which I'll take up if it's trading above 90 at the time. Waited yesterday and today for a rally and nothing has eventuated.

4.10 The stocks have matched out to leave the index down about 9 points. I'm long Ifn, Ipl and Sbm and also a few Gns rights.