Bai bai. Fri Nov 27

Dubai World is having trouble paying its debts and so, most unusually for a day when the US market was closed, we had a big down night in Europe. US futures were actually open and they followed suit. The AUD, oil and base metals fell although gold held. European banks and miners were heavily down and major European indices were all lower by more than 3%.

An hour into trading and we're having our first intraday rally attempt after we worked our way to down 3%. 25 points off the low at present. All my stocks are down and fortunately, the two longs which are Aoe and Tls are the best performers. As for the short positions, I've been early into quite a few of them and they're starting to look like downtrends have set in.

I had two debatable shorts on the close. One of them was Cey which has settled around 325-327, about where I thought they could hold if there was to be another attempt at a high. I bought back half at 323 (v 335) on a dip down because the chairman's address today is upbeat on coking coal and they're holding well.

The other one is in Ipl which is now confirming my double top and reversal theory so I've held the short and just bought back a couple at 286 (v 292.5).

I've bought dribs and drabs across the board to take a little profit. A few Awc at 152.5 (v 165), Djs at 559 (v 577), Fxj at 158 (v 166), Ost at 289 (v 300), Ozl at 118.5 (v 126) and Tse at 389.5 (v 409). I've also bought a third of my Asciano position back at 163 (v 161.5) since they're holding, understandably, because Dubai World is their Australian competitor and is in trouble. I was within a tick of having to cut this yesterday at 167.5 so I'm willing to take some off.

I've also reinstated the Awe short at 272 this morning. I was looking for further weakness below 275 and the recent trend channel is convincingly broken now. By the way, the weakness in Europe has accentuated the divergence compared with the DJIA and to a lesser extent the S&P500 and NASDAQ which haven't made new highs.

The last week or so has been tricky with a lot of stocks at turning points. It's a lot easier to jump on reversals when they're in the direction of a clear trend. Now, it's looking more and more like a downtrend could be in place.

12.27 Fortescue has gapped down but if the rally is over then it can easily move to the October lows below 360 so I've taken a short position at 397.

2.48 The market has been chopping around with a loss of 2.5% for the last few hours. No real changes for me. It's a pretty strong sell signal on the Xjo index so it's just a question of sitting tight and hoping for some bearish momentum.

4.17 We're closed now with a loss of 2.8%, nearly matching the European losses. The Hang Seng is the worst of the markets in this time zone, down 3.5% and US overnight futures are around 3% lower as well. Quite a good day for me, more on Monday.