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.