Cup day. Tue Nov 3

It's Melbourne Cup day and with very few paying much attention today we've only had a modest bounce in the market by 10.50 am with the index up 14 points. US and European indices were reasonably firm with gold having a decent bounce back as well.

I was discussing Lgl yesterday which has popped up to 310. I didn't buy then and although I've got a little breakout here I'm still reluctant to take the signal because it looks like a small rally in an interim pullback.

Unlike a lot of other stocks around, Lihir looks positive on a weekly time frame which is why I'm fretting over this trade.

The leg up in October was smaller than the late August/September rally but there was good acceleration. It suggests to me that it was just the first part of a larger weekly rally which should soon enter its next phase.

However, the reality that, despite Melbourne Cup day, this rally is anaemic tells me that we need to see another low before any sort of bounce. The 60 minute chart for the Xjo shows that the rally from yesterday's morning low hasn't caught fire and given that it looked like a 3rd wave down within its own little pattern, there's a good chance of another attempt at the low.

11.07 I discussed Gff yesterday and they've been unable to rally despite their defensive qualities so I've sold out at 159.5 (v 166).

11.24 With gold running another 4 USD in our session, I've jumped into Lgl at 313. It was starting to look a lot like the buy signal a month ago and the stock is firm despite the futures going nowhere.
Out of the office now until about 3pm.

2.58 The market is now down 9 points at 4532 and was actually lower, making an exact double bottom (so far, at least) at 4517.6. Rates have risen another 25 bp to 3.5%.

3.21 Shocking won the Melbourne cup and the market has woken again with a little rally to be up 2. I sold out of Fgl earlier at 549 (v 563).

3.54 I'm looking at Csr as a potential short.

Actually I've just shorted it at 179.5. It had a lower high, followed by a reasonable result but also a rights issue which will continue to pressure the stock this month.

4.12 The market has closed down 9 points. Lgl did well, finishing at 317 while Tls continued its retracement with a 2 c dip to 322. Fmg is neither here nor there, unchanged on the day and I was tempted to cut but since there's a potential stop fairly close by I decided to stay in for a while longer.

I bought back the rest of my short in Qan on the match at 268 (v 286). I've been doing work on what's a good time frame for me to hold positions. Trailing stops were causing me to leave too much on the table so I decided that unless it's an obvious peak, I would allow a swing against me and then close out a position if it continued on to a new high or low at the end of the first day. Slightly counterintuitive but for every stock that continued there was another that would make a 5th wave type peak or trough and then turn around.

So in Qan, below, instead of stopping out at about 280 3 days ago on a trailing stop, I've held on for a new low and then bought back at 268 on the match out. Obviously much better if you do get a continuation but since my signal is typical of the start of a 3rd wave then usually I am likely to see a continuation after some sort of retracement.