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.