Reprieve. Fri Oct 30

US GDP figures for the third quarter surprised to the upside and US indices bounced back strongly. We'd fallen further so it's no surprise that we've opened up with a gain of 80 odd points as we approach 11 am. The general commentary on the US figures is very muted with much concern about stimulus packages which are running out.
My positions are slightly down because they're largely defensive. My only high beta stock is Karoon which has rallied 25 to 775.
After doing some testing on how many positions I might have on peak days, I've culled the number of stocks I look at to about 20. All top 100 stocks between 100 and 600. No particular reason there, just a mix of liquidity and volatility versus stability that suits me.
I've also come to accept that I need to hold my positions for longer. I realised it a long time ago but have been reluctant to change my ways because the downside of holding for longer is that I can also become inclined to ignore my stops. I've spent a lot of this year practicing being unemotional about stopping out so hopefully that will pay off.

It means that once they've run their course I'll be taking Bxb and Kar off the radar and also Fgl which I'm scratching because it's too choppy.

11.31 Most of the stocks that are trending down are having a retracement today but although I'm interested in reversals back up, that's generally in the context of a longer term uptrend. At the moment, a lot of stocks look like they've topped so I'm ruling them out.

The exception in my list is Fortescue.

Fortescue has been running its own bearish race for a while but recently had a decent rally which breached previous lows. After an abc down, today it's reversing and I'm interested in a buy here as it potentially makes a higher low.

The problem is I'm leaving shortly for a weekend away. I also think the market is likely to close on its lows so the best bet might be to wait for Monday.

12.20 Decided to buy a half amount of Fmg at 386. More on Monday.

Through a glass murkily. Thu Oct 29

The bar staff round here should start doing their job properly. The glass must have been smudged because what looked like it was a glass half full has now turned out to be a glass half empty and the hangover is kicking in.

The long awaited correction has arrived with steel capped boots and an attitude as the sell off has exceeded the last couple in August and late September which rapidly reversed back up. Down 81 points at 11.05 am, about 15 up from the lows. Here's the Xjo chart.

My positions are going ok though, defensives Fgl and Tls are up, with my short in Qan down. A small long position in Kar is down but outperforming.

I've added another small long position in Brambles. It had a wicked correction in early October from a very strong uptrend. It's bounced twice since and today could be the third time. Doesn't seem to be any desire to sell it down. Long at 724.

1.07 It's the standard big gap day down followed by a narrow range. Anz has followed the script and sold off on the back of its result. I'm still doing some homework on my trades etc so no changes to the book.

2.51 Let them eat cake....or bread at least. Goodman Fielder, a listed baker, is rallying along with the other defensives in a market that's now down 2.4%. I'm long at 166.

4.12 A sad little rally on the close failed to add much spark and the market closed down 110 points. A reasonable day for me though with Fgl, Gff and Tls holding small gains.

Homework. Wed Oct 28

Mixed messages last night from US markets have left us with no real lead. The main story this morning has been the NAB result which was slightly better than expected. The market was initially bullish then sold off but is now firming again so it's the usual post result confusion.
I'm spending today doing something I should have done years ago which is working out how many positions I'm likely to have given the signals I look at. I always get uncomfortable when my book is too big but I've never thought to do this. It's too easy to get sucked in to specific stocks I suppose.
As for my positions, Resmed is dual listed and is being affected by Nasdaq weakness I think. It was sold down to 530 - part of it silly automatic stop losses - but I felt obliged to stop out as my trailing stop was at 542. Out for 539 (v 540) and it's back to 545 now.
I'm also out of Ost at 325 (v 329) because I could see the market ready to bounce and I'm not quite sure if I've got a good enough reason to be short this.
Lynas is the dumbest trade I've done for a long time and that's gone down through the previous major low at 49.5 to a low of 48.5. That's my cut level but it's bounced back to 49.5 so I'll play it by ear. Otherwise Fgl is a mess, back up to 555 but the more I look back at this stock, the more I can see why I normally avoid it. Far too choppy and yesterday was technically a cut for me but as the normal rules don't seem to apply in Fgl, I've left it. I'll try and finesse out on a rally.

11.54 The little rally didn't last long as the CPI figures came in slightly worse than expected and gave the market the impetus to push lower. Down 19 points now.
Out of Ewc at 49 (v 48) as I'm not sure how to approach the reversal trade. It's supposed to be high momentum and it hasn't been but admittedly it's a falling market. Food for thought at least.
1.42 The market is now down near its lows with the banks getting sold off. Sell on fact has a history with the banks so although the result was fine, Nab is down 2.6% with the rest of the banks following suit. My positions aren't doing much, Lyc still poor and Tls confirming the breakout yesterday with a 5 cent rise to 329.

4.30 Sold Lyc on the close at 48 (v 56) which was a shocker, otherwise everything else was fine. The market closed down 68 points. Still busy with some analysis/research.

Rolling over. Tue Oct 27

The new pattern of choppy volatility in a tight range continued overnight with the Dow reversing an early gain of 1% to fall around 1%. The Australian market has surprised by holding to a 0.9% fall at 11.15 am after looking pretty gloomy early on. Metals, oil and the AUD all fell as the USD rallied.

I stopped out of Boart Longyear this morning at 31 and 30.5 (v 32.5). Looking back at the chart, I'd been having second thoughts about the strength of the signal. The previous run up was in the context of some snappy volatility. It probably would have been better to wait for a secondary signal this time around.

The other cut was in Western Areas at 500 (v 519). Again, I'd been wondering why I went long this and decided I'd been pushing the trade. Although it made a new high on Friday nosing above a little trading range, the general pattern of trading was very muted compared to the rises and falls from July through to late September. Warning lights should have been flashing that this was probably a corrective rally, ie reactive rather than impulsive.

Of my other positions, two are breakout trades and two are reversals. Fgl broke above a recent range yesterday after making a series of higher lows and although it failed to hold those levels on the close and is down a few cents this morning, it still looks like a reasonable long. It's not a stock that I like to trade in much because it does tend to chop around and then gap into another trading range. The second of these is Resmed and that's one of the best performers today, up 10 at 551. It looks ready to run now for a few days.

I've been looking at charts for years and you might think that it would be futile to imagine that you would notice anything new that's potentially useful. I think that's mostly true and that it's quite easy to be constantly tinkering with your approach when the solution is probably more to do with mental attitude and with how well you follow your own rules. That said, I've been looking at reversal trades which I tended to leave alone before because they're high risk/reward propositions.

I've done two of them. The first was in Lynas and so far has been a flop. I've been looking at these trades in general and I can see an obvious error in Lyc.

You can see, in Lyc, where reversal trades, signalling trend resumption, were excellent in September. It would have been almost impossible to get on these trades any other systematic way. Joe Ross has a technique of buying the break of the high of the pullback bar in a trending stock but limits it to three bars. I bought three days back on a break above previous highs but the stock has drifted to new lows. The difference this time is that there had been no preceding surge and I was not buying off a potential higher low. I'm still in this, by the way, because the next major low is at 49.5 and there's failing momentum so there's a reasonable probability of some sort of bounce.

With those provisos in place, Ewc has been better.

Although the stock hadn't been in an uptrend, there had been a nice surge which had made a new high so that any reasonable up day would result in a potential higher low. I'm not sure what the best way to trade this from here would be. I'm targetting the recent high of 60 but I'll probably use a trailing stop as well because it's in a trading range - if it was in an uptrend then I could be confident of a new high.

This morning I noticed a similar set up to this in Karoon. I bought at 771 although I sold almost half out at 792. It's at 781 now.

12.54 I've put on a couple of short positions this morning in One Steel and Qantas and they fall into the two categories, a reversal and a breakout. They're pretty similar really, it's just that you don't always get a nice little 1-2-3 breakout at a turning point.

To be honest, I'm not sure why this stood out to me. I can see that after making an exhausted new high in September and selling off to make a double bottom in early October at 298, it has then had a reactive sort of rally which seems to have fallen short at 338. But it bounced back from a sell off last Thursday so what would make it dump now? All I can say is that it looks really tired and I'm willing to trust my intuition here and see what happens. Short at 329.

Qan is a much more straightforward sell signal, admittedly with the stock in a strong uptrend. It's extended enough though that a reasonable correction could happen. Short at 286.
3.20 Telstra has made a nice buy signal, confirming recent strength and unsurprising in the context of a toppy market where there might be a flight to safety. Long at 324.
4.12 It's a pretty heavy sell off day with the market down 1.6% which is more than the fall in the US. I've held on to my positions, with Ewc and Kar the interesting ones because they're reversal trades but have stalled. Do I just dump them on loss of momentum or use a trailing stop? I'm using a trailing stop but if they'd stalled on a strong up day in the market I might have just got out.

What Ifs. Mon Oct 26

It's 11.30 am and here's what looks like a bit of good news with the Producer Price Index rising by a less than expected 0.1% in the third quarter. It makes a rate rise next week look less of a certainty. The market is down 35 points, about 13 points off the lows, and running a bit worse than NZ or Japan which are also open for trading. US overnight futures are only down a tad.

My positions are mixed; Bly down a tick, Lyc is down 1, Rmd is up 3 and Wsa is down 10.

I've added a new position in brewer and winemaker, Fosters Group. I'm long at 563 and the breakout was at 561 with a second nearby resistance level at 564 which has also been passed when the stock peaked earlier at 565. I like this set up where there's a buy signal after a retracement because more often than not the stock will reach or pass the recent high. In this case it's just above 580.

I've been making money for the last few months but my performance has only tracked the index. Given the speed with which I move in and out of things I assume that if the market had fallen sharply at some point in this period I would have avoided most of the damage compared to a buy and hold approach. So, perhaps I've made the same sort of return with less downside; but in the past I would generally have made 2 or 3 times the market move.

I've been trying to analyse what's at the root of this because I think the cause is psychological rather than anything much to do with technique. More precisely, any technical weaknesses are being driven by an impatience or jumpiness that I haven't been able to shake. So, over the weekend I tried asking myself a few "what if" questions.

For example, what if I had a huge amount of money, say 100 million dollars, would I still want to trade? The answer for me was yes. Sure, I'd invest a lot of it fairly conservatively, I'd take more holidays, give more to charities and have more time off but I'd really like to trade two pools of money - one agressively and one fairly passively. That was reassuring, because it answered a question that was nagging at me: I'd been wondering whether my problem was that I no longer had the appetite for this type of work.

A large part of this problem with impatience might be simple "shell shock" where the effect of the long, vicious bear market is such that I've become super cautious. I describe it as vicious but really the bear market was largely a missed opportunity for a trend follower like me, except that the shorting ban made things very difficult so that instead of being short I was often finding myself long the least bad stocks which did outperform but not enough to make money. Along with the near collapse of the parent company of my clearer - which could have lost me most of my company's capital - I wonder if I've been carrying scars from that period. Of course, these events were a once in a generation or even a once in a century experience and to be too strongly influenced by them is a clear mistake.

So what to do about it? I'm not sure exactly, but one thing is to put less pressure on myself to make money quickly. For example, I think I'm pretty good at spotting the outperformers but too quick to get out of them. I was very keen on Vba a month ago and went long at just above 40. A month later and the stock is the best performer in the Xjo index of 200 stocks, up 33%. Quite honestly, I don't think there has been a stock I've liked more in the last month but I don't think I've made money in Vba because it hasn't been moving as explosively as I've wanted. Clearly it's a problem when a 33% rise in a month is not good enough for you.

I'm not suddenly going to hold all of my positions for a month but I would like to give them more time and space in general.

12.42 The market has recovered some more, now down 22 points. I've bought some Energy World Corporation at 48. It bounced strongly in early October after making a double bottom. It has corrected for 8 consecutive trading days and the range has been getting smaller and smaller. If it can hold today's gains then it's very likely a higher low with the potential for a sharp reversal back up.

4.13 The market drifted lower with most things slipping a touch. Ewc was the success story for the day as it rallied to close at 51.5. The chart for the Xjo index shows how tight it's been lately, with the last seven trading days chopping around 4800 or so.
Given the long uptrend, I think it's more likely that we'll push to new highs.

Buzz Light Beer. Fri Oct 23

Normal service is resumed as the market has bounced 42 points in the first hour.

I've purchased Boart Longyear at 32.5. It's a stock which has spent a long time digesting the large rights issue in August but may be ready to go to infinity and beyond or perhaps the low 40s.

Lynas has been pulling back sharply as we await the issue of rights at 45. Today is the deadline for acceptance and it should be 100% as the stock is trading at 55. In recent months Lynas has tended to recover sharply from steep pullbacks and usually a simple break of the previous day's high is a good enough signal. I've bought at 55.5 and 56 with a little trepidation because yesterday the stock did blip above the previous day's high without carrying on.

I've been pushing too hard all week and have cost myself by cutting things for no good reason. One of those is Resmed and having looked carefully through all the charts last night, I think this is one of the better stocks around. Long again at 540. I had one position overnight in Sek. I sold half at 675 (v 661.5).

12.39 I've read some research suggesting that it might be time for a switch back into resources as Chinese growth continues to be solid and growth generally is a lot stronger than was anticipated a few months back. I've bought Western Areas at 519 as the stock edges above the level set 7 trading days ago.

3.15 I've made no further changes to my positions although I'm regretting not selling Seek out as they've slipped back to square. Although I'm largely focussed on long stock opportunities I can't help noticing that there are a lot of sell signals coming through as the market tops out and there's more of a mixed picture. Here's Esg for example.

The stock retraced through to mid October and then failed to push on this week. So you've got a lower high that didn't reach resistance at 100 and now a sell signal. Kar and Mmx are similar.

4.10 The market has traded in a tight range all day but, as I mentioned earlier, it's unusual for a solid up day because I can see that 18 out of 200 stocks fell by 2% or more. I sold out the last half of my Sek at 666.5 (v 661.5) and bought a handful more Resmed on the match at 541.

Waiting on China. Thu Oct 22

The US market sold off late driven by bank selling but resources, which closed before the late fall in US indices, were very strong. Along with Spi option expiry today, this has led to a flat slightly better than expected performance in the first hour. Just after 11 am the Xjo index is down 6 points. A raft of Chinese figures come out today including 3rd quarter GDP and September industrial production so they'll probably influence the market later on.

I'm out of a few positions early on as they're not really going anywhere. Sold Tts at 253 (v 252.5), Roc at 68 (v 68.5) and Rmd at 535 (v 540).

I've bought Fmg at 403 on a resumption trade (or Joe Ross traders' trick entry) as they pass yesterday's high.

Tls is down a couple of cents early on and I added to my position at 321 soon after the open as it looked ready to drive up. Vba is also a tick below the close but regaining strength as the futures rally.

12.25 Not much has changed although our outperformance is starting to contrast markedly with weakness in Japan and Korea. US overnight futures are steady though.

I'm long Seek now, an online employment agency, which has been upgraded recently. I bought at 659 and 660 with the stock trading at 659.

1.20 It's a wild little period from just before 1pm until now as the market digests the Chinese numbers, which were around expectations with some below and some above. The market is slipping now but very slowly. I'm trying to sell out of Vba which rallied and have now stalled.

1.42 Cut Fmg for square at 403. It's as much a day trade as anything, punting the Chinese numbers, so with the market falling fast I thought it wise to get out.

2.11 Out of Telstra at 317 (v 320,321) and Vba at 54.5 (v 53.5). Vba was a tad unlucky, first in the queue at 55.5 for a long time with the stock well bid. It wasn't rational to sell down, being at the head of the line but a large order took out all the stock at 55. Just long Seek now. The DJIA chart is still in an uptrend but looking weak in the short term so I don't mind this state of affairs.

As my positions are all long most of them are failing over the last 5 or 6 days as our market tops out too or at least falters after a good run before that.

4.10 Bought more Sek towards the close to take my average entry price to 661.5. They've closed at 665, which is level with the recent high. I hope they do something like Mmg which has pushed to new highs after a similar tight saucer shaped correction.

The market has closed down 26 points or 0.5% with Asian markets down about 1% or more.

Odd sense of relief. Wed Oct 21

Most of my positions have suffered this morning despite a fairly modest 20 point drop but I feel a strange sense of relief. I think I had way too many positions and it stemmed from trying too hard, an old failing of attempting to make things happen rather than letting them unfold.
I haven't changed too much yet; it's 10.35 am and the market has flirted with the possibility of reversing up already. That's failed and we might make a new low in the short term, but it implies that there's not a huge desire to sell the market down.

I stopped out of Mig at 150 (v 157) and I'm disappointed that I didn't get out of this yesterday since I'd already decided to cut it - I wasn't agressive enough to get out on the match.

The standout bullish trade in the market this morning is in Tse and my bloated set of positions has cost me here. I noticed it last night, after the close, and there was a chance to get in on the open but I was too busy fighting fires elsewhere. Here's the daily.

It's the kind of trade that I'm focussing on because it finished strongly at a new high with a good chance of having completed the correction and therefore pushing through to new highs. It's rather like the Bsl signal which I took (and is down a few cents) but better because it isn't extended.

Tatts Group, a lotteries and gaming company, has a different sort of chart. It has neatly broken out of a tight range and I'm looking for a similar surge to the 4 day move in early September. Long at 252.5 so far.

10.57 Stopped out of Awb at 126 for square.

11.14 Out of Pla at 101 (v 101.5) and long Vba as it resumes at 53.5. There was another broker upgrade this morning on the back of good overseas travel figures, targetting 70, Merrill's I think.

12.28 The market has been clawing back some of the losses, just down 12 now. But so far the rally is unconvincing. Bsl is back to square while Tse is up 29 at 472 having opened at 445.

1.07 Stopped out of Ipl at 284 (v 290) as my jitters yesterday turned out to be warranted. Of my remaining positions - Bsl, Roc, Tcl, Tts and Vba - I'm most confident about Bsl and Vba.

2.29 Stopped out of Tcl at 437 (v 442) so I've had a string of small losses today. Overcoming my reluctance to put on more positions, I've bought a half portion in Resmed.

It's pushing through resistance from a bullish congestion. It has also hedged its USD exposure and is being generally upgraded.

3.46 Out of Bsl at 337 (v 338) and long Telstra at 320. I've been looking at this all day and it's going to close near its highs.

It's making a higher low, I think, with a big reversal up day which should see some follow through tomorrow.

4.14 The fall was only 8 points by the close. Long Rmd, Roc, Tls, Tts and Vba although I sold out half of the Tts at 253 (v 252.5) as although I like the chart, I think the others will move faster. Vba was the standout, finishing at 55.5. Tcl was disappointing, I sold at an intraday low and it closed at 445.

Since I returned from a holiday in late July my aim has been to try to focus on the very best moves in the shortest time. I'm still coming to grips with ignoring stocks which are charting well in order to focus on the strongest. I think it's a lot easier than I've been making it; you don't have to be a genius to filter the top 200 for the best movers and then it's a question of scanning them for the ones which have a good structure too.

I find myself wondering lately whether a very simple strategy would be to look over the stocks at about 3.30 pm and deal in the last part of the day because that's when the moves are usually confirmed. That would be pushing the late riser concept to an extreme except that closing out trades is trickier; sometimes it's worth taking a gap move on the open which doesn't continue and other times you need to be monitoring for loss of momentum.

Unconvincing. Tue Oct 20

Although we've more than recouped yesterday's fall, there is still a very cautious tone to the Australian market this morning. An hour or so into trading, there's an unwillingness to chase anything up. Gold, oil and precious metals were all firm last night along with European and US indices but so was the AUD and that negates a lot of the positive impact for Australian miners.

I feel like the miners are due a rally though and my first thought this morning was that I had the wrong set of positions - only one resource stock - and sure enough, the only one looking good is the gas producer Molopo.

I sold out of Isf at 87.5 (v 89.5) as it wasn't moving, along with a third of my Awb at 128.5 (v 126) and half of the Mig at 154.5 (v 157).

I bought more Mpo at 132.8 average as the stock made a new high above 132 and I've added a part position in Platinum Australia at 100.5. This stock has had a sharp retracement which held support and broke yesterday's high on the open, so it's a simple resumption trade.There are a number of resource company charts which look quite bullish and I'm watching Minara and Western Areas in particular, along with GWA international in the small industrials area.

For the last ten days Ive been having a go at quite a few stocks and constantly cutting them for small wins or losses. I'm looking at the situation where I can get into a stock which is running hard for two or three days, not at something which is perhaps chopping upwards, so getting that ideal trade is not going to happen everyday. The best mover today is Cgf, up 6.5%, and I've looked at the chart: there's no way I would have been long that. Yesterday, the best mover in the Xjo for most of the day was Pbg, which I was on and although I was hoping for more, I took a fair bit of what was available and was probably right to get out with the stock back down at 143.

12.13 I've been going through the charts again and I'm not sure that there's any particular bias towards one sector or another. I've just gone long Transurban, a toll road operator, at 442 as they resume after a four day congestion. Forecasts are much higher than the stock price and they've just done a pretty good deal with the NSW state government.12.45 The market has firmed to be up 74 points and I'm having one of those days when I'm desperately trying to make up for the fact that I haven't made money despite being long on a big up day. So, I've found about 15 stocks which I'm watching like a hawk in case they start to surge.....exhausting and counterproductive. So far, I've avoided some of the worst pitfalls but really I should accept that the odds are that any money I might make on my current positions will be due to an overnight move. Oh well, bought more Pla at 102.5 to take the average buy price to 101.5.

Roc is charting well again after its pullback. I'll try to wait for the close to get some of these. I'll need to sell something though and Mig might be the one to go.

1.50 Slightly reluctantly, I've also gone long Ipl at 290. There are stories on the news wires about Bhp running the rule over the US fertiliser stock Potash and although Incitec Pivot is a fertiliser (and explosives) company, it doesn't produce potash. Anyway, I bought this a little while ago and it has pushed on to 293.

3.51 I'm disappointed in Molopo, it looks like a failure after a new high. I bought some Roc as they've held most of their gains, long at 68.5.

3.59 Out of Molopo at 130 (v 131.5 ave) as these failures can drop very sharply.

4.03 I've been watching Bsl all day and haven't really had the guts to buy it but I think I should. Here's the daily.

It can be hard to buy these because it looks like you could have got set just above 300 and it's now pushing the July highs, but it's an impressive performance and it doesn't look like a retracement rally because it's far too dynamic.

4.12 The Xjo has finished with a gain of 53 points. I did buy Bsl at 338 and I'm slightly overspent because I missed selling out Mig and some Awb and Tcl in the match when they closed at my level but I was too far back in the queue. I did sell some Pla at 103 (v 101.5).
I've been jittery all day though I can't put my finger on any particular reason. Sometimes I get like this when my positions are wrong and I'm failing to see it but although the Xjo could fail tomorrow and make a lower high, there's no reason to act on that and it's more probable that the trend will hold.

Trying AWB again. Mon Oct 19

Almost 45 minutes into the trading day, the index has surprised with a 54 point drop as the market has fallen steadily from a mildly weaker opening. I assume we're close to the low for the day because there doesn't seem to be any obvious weakness in US overnight futures and we had fallen on Friday perhaps pre-empting some profit taking in Northern Hemisphere markets.

My two longs in Mig and Pbg are ok. Mig is close to square and Pbg is one of the better performers, up 4 at 147. I sold a quarter out on the open at 146.5 (v 142.5).

I've added a new position in Awb and this time I'm more comfortable as I have a signal I like. I bought and sold this for square about 3 days ago on a simple reversal but now I've got a reversal followed by a higher low and new high, in the context of a probably completed correction which held above support around 115. So, I'm thinking that we could quickly see new highs in the mid 130s.

11.04 The market had a 15 point bounce but is now coming back towards the lows again, there might be a few points to go yet. I've added another long position in Isoft Group which is a provider of net based software for hospitals. It's getting quite a bit of business with the National Health Service in the UK and seems very well supported. It's not a stock I'm familiar with so I did some reading because although I'm primarily focussed on the chart patterns I still want a context to get a feel for how volatile the stock might be. Analyst opinion is moderately bullish with a headwind being the strengthening AUD because a lot of income is coming from abroad. The company has recently placed some shares at 77 so that could be another short term barrier but so far the stock seems untroubled by any potential overhang. Long at 89.5 with the prospect of buying more if it can hold on to these gains on the day.12.14 The Xjo index is hovering around the lows, down 53 points. I bought more Awb at 126 and sold a few more Pbg at 146.5.

1.55 The market is recovering now but Pacific Brands looks like it is slowing down so out of another quarter of the position at 149.5 (v 142.5).

2.41 Out of the last of the Pbg at 148.5.

3.33 It's nearing the day's end and the Xjo index is still down 0.8% despite a turnaround in the rest of the region after we had led them down at first. There has been a dawning of comprehension about interest rates in Australia and the increased probability of rate rises in the short term so perhaps we're running our own race. I still favour some strength into the close and I've bought a small position in Molopo at 130.5. Here's the daily chart.

4.11 I've been too bullish the last few days and true to that form the market didn't rally into the close although my own positions held steady or improved somewhat. I bought a few more Awb on the match at 128 to take the average to 126.3, while Isf closed at 87.5, Mig unchanged at 153.5 and Mpo towards the top of the range at 130. The index fell 44 points.

Arm wrestle. Fri Oct 16

The US surprised with a modest gain, once more supported by better than expected results. The local market, at 11 am, is up a modest 7 points and has oscillated between up and down 10 points since the open as the general tendency to sell off after a strong week is countered by the fact that we spent most of yesterday grinding back.

My positions are mixed, but slightly disappointing, because oil rose sharply overnight but my energy stocks haven't done much.

Tse is firm again today, so after hesitating yesterday, I've gone long this morning at 435. Here's the daily.

11.25 Just stopping out of Esg at 94.5 (v 96.5).

11.35 Also stopped out of Mmx at 169 (v 165).

Pacific Brands is interesting, it has pushed on to recent highs this morning which is presumably due to the continued strength of the Australian dollar. Weekly resistance is at 160 and it's trading at 142 so there's room for a trade. Long a few so far at 142.

12.35 The market has chopped back down to a loss of 4 points. I'm not completely convinced about Tse, not enough to buy a full quota, so I've sold it back out at 437 (v 435). I did buy some more Pbg at 143, average is now 142.5.

1.19 The bears are winning the arm wrestle as the market has another leg down. Out of Aoe at 443 (v 437.5), it's unchanged on the day and going nowhere fast. Just long Mig and Pbg now.

1.30 The week has been ok, profitwise, but nothing has really kicked on for me. For example, in the last few days I've given Aoe, Cvn, Mmx and Wsa enough time to accelerate but ultimately I've chopped them all for small profits. Hope springs eternal and I'm pleased to see Pbg edging up in a falling market, trading at 144.

4.10 The market has just closed after another gap filling day, down 23 points. I've tried to avoid forcing any trades. Mig has fallen to 153.5, just above the trading range break and Pbg has held well to finish at 143. More on Monday.

DJ 10K. Thu Oct 15

Up, up and away as the Dow went back up through the 10,000 level last night, and closed above it too, at 10016. Not a complete surprise as the US futures were firm in our time zone yesterday on the back of the strong Intel result which came after market close. Nevertheless, it held those gains and built on them, thanks partly to another strong result in JP Morgan.
It's 11.13 and the Xjo index is up 54 points, hovering around the opening levels. I felt uncomfortable last night with so many positions on, so I've taken advantage of the strong open to have a clear out. Out of Awb at 125.1 (v 125), Esg at 95.6 (v 95), some Lnc at 177.5 (v 176) and Roc at 70.1 (v 66.4). I sold a couple of Aoe at 449 (v 437.5) but I've still got most of that position. Also out of a handful of Mmx at 169 (v 165) but still have most of those too, and they're the standout for me, up 9 at 172.5. Srl has edged past Tuesday's high to 170.5 and look the most likely to kick again on the day.

11.45 Out of the rest of my Lnc at 175 (v 176). Now long Aoe, Mmx and Srl as the market chops back a few points.

12.04 I think I made a mistake in getting out of Esg so I paid 96.5 to buy back. The daily chart shows that it's right on resistance.

The 60 minute chart shows a tight consolidation holding above a mini breakout around 93 which now looks ready to push toward 100. 2.24 The market has eased back and is now up 28 points. It looks like gap filling to me, based on the short term Spi chart, and my positions are hanging in there.

2.46 After twice losing small amounts trying to pre-empt a breakout, I see that Mig has cleared a 20 day trading range and is up at 156.5. So I've bought half of my position at 156.5 and I might buy the rest shortly because it looks like it has completed the first consolidation from this morning's early surge.

I'm interested in Transfield as well and the chart is similar to this but I've plumped for Mig because it looks like it has more upside, both chartwise and in relation to analysts' expectations.

Srl is a concern as the expected surge hasn't arrived today and the way the chart is forming up, it looks like a weaker second leg to the rally - not a good sign. I've sold more at 169 (v 165) with half my position left. The Spi is trying to rally and I'm hanging on for a short while to see if Srl goes with it.Bought the balance of Mig at 157.5 for an average of 157.

3.09 Out of Srl now, selling the last portion at 168.

3.58 Approaching the close the futures are close to their day's lows.

It's a pretty standard sort of pullback day, similar to the 12th. There's a good chance that we've filled the opening gap now so although my positions have edged back, I'm holding for the open tomorrow.

4.14 We've finished with a gain of 28 points. Long Aoe, Esg, Mig and Mmx.

Roc Steady. Wed Oct 14

The overnight lead was flat but Intel's result after the bell has given the Australian market a modestly bullish lead and at 11.17 am the Xjo index has risen 18 points. Base metals were weak in the Northern Hemisphere markets but oil and gold were firmer.

Most of my longs are energy related so they're steady to stronger this morning with Cvn, Esg, Roc and Srl all up while Wsa is slightly down. I sold about half of my Wsa position at 504 (v 502.7) as I've been expecting more of a push from this.

I've put on fresh longs in Arrow Energy and Linc Energy.

Aoe was on my list yesterday and needs to push through 440 to confirm so the purchase of half my position at 436 is subject to a quick resale if the day doesn't pan out as I'm hoping.

Lnc closed a tick below the breakout level last night and I went long on the open at 176. 12.14 Wsa has restarted trading following a reserve upgrade and they've bounced up to 513. The market has also pushed through short term resistance to be up 28 points now.

12.56 Bought more Aoe at 439 (ave entry 437.5) and they're through the breakout level having been up to 441. Now I just need them to build on this momentum...

2.08 The market is up 47 points, almost 1%, and I'm disappointed because on aggregate my positions haven't really moved since the open when the market was only up 18 points. Bluescope Steel is running again while One Steel is lagging slightly but looking bullish so I'm wondering about jumping back into that. Golds are also running again and I missed the opportunity to get on either or both of Lgl and Sbm yesterday because although they gave continuation signals I thought they might be too stretched.

2.53 As was the case yesterday, there are still good buy signals and I've decided to get into Awb at 125 as it's starting to move and might have digested the stock issue from late September. Broker targets are quite bullish too. Murchison Metals, an iron ore producer, is also breaking out but I'm pretty full now. Here's the Australian Wheat Board chart.

It's more of a simple reversal pattern than the signals I usually take but it looks like a longish 3 wave correction is complete.

3.52 Decided to take the buy signal in Mmx after all, at 165.5 and 166, as it's a high momentum breakout and Rio is talking about how robust iron ore demand is, and not just from China.

Sold out of the last Wsa at 508 (v 499, the first purchase) to make room along with half of my Cvn at 59.5 (v 56.5) and Esg for square at 95. Wsa had ample chance to run today with a reserve upgrade and a rallying market to go with the breakout but has failed to get cracking.

4.13 A modest late sell off in the spi depressed the price on the match out and I was able to buy the last of my Mmx at 163.5 to take my average entry price to 165. Over my limits so I sold out of the last Cvn at 59.5 (v 56.5) and a couple of Aoe at 443 (v 437). I've now got a full book with the market at the top of a trend channel having just jumped 90 points in two days so I'll be looking for any signs of weakness to reduce my positions.

Solid as a Roc. Tue Oct 13

A quiet night in the US as it was Columbus day but the European and US indices were firm and after two days of consolidation I'm pretty confident that we're going to keep the gains. It's 11.30 am and the market is holding onto a 44 point advance. I've sold out of Csr at 196 (v 195) because I got onto it a bit late and I've found more interesting trades and Mre at 102 (v 100.5) as it's still stalling and if it's not going up I probably want to get out.

Esg, which I highlighted yesterday, has pushed on to 96. I'm long at 95.

Roc is up 2 at 66.5 and I bought some at 66. It's starting to accelerate and it seems like it's representative of a lot of the small resource stocks which have underperformed for the last couple of months and may be due for another few days in the sun.

Western Areas has broken through previous lows at 504 and I've bought more at an average of 502.7. It's at 505 having reached 508.

I'm also watching Straits Resources quite closely for a trade above 164.5. This had a sharp rally which pushed through previous lows implying that the downtrend was over. It looks like it could have a second push up and I'm hoping it will be as robust as the previous surge.

12.46 I've just bought some Ost at 322 and I'm getting uneasy because I've now got 5 positions and I'm keen on Aoe and Srl as well. Ost has actually made a new high while Srl and Aoe (not shown) are still some way short but Srl looks explosive and I'm willing to buy on a break of yesterday's high. In the end, I might buy them all, as I'm short of my dollar limit, and look to discard the weakest stock or the first one to hit its target. Also, I suspect that the whole sector is going to rally so a broad approach is not unreasonable.

2.41 Srl has pushed on and I'm long at 165. Now long, Cvn, Esg, Ost, Roc, Srl and Wsa.

3.47 Sold out of Ost at 323 (v 322) just to reduce the number of positions. Srl is doing well, up at 169 now. Also, sold a couple of Wsa at 505 (v 502.7) and Cvn at 59 (v 56.5) to take a couple of bucks off the table.

4.10 I feel dumb to have stopped Ost as it does look good but then again there are a bunch of buy signals today and I just bought Lnc at 174.5 on the match as it has lots of room to manoeuvre.

Once again, long 6 stocks which are Cvn, Esg, Lnc, Roc, Srl and Wsa. The market closed up 46 points - barely changed after the first half hour.