Subdued. Thu Nov 12

The US market rallied modestly on low volume affected by a public holiday.We opened firmer but have the look of a reversal day about us, with the index, at 10.42 am, already 20 points below its high albeit still holding a small gain of 11 points.

The property trusts ran hard yesterday but I noticed that there wasn't a lot of follow through buying on the open. Since Mgr had run particularly hard I decided to take my profit there, selling out at 157 (v 143) which on a small time scale was a good move because they've slipped to 154.5. I also tipped out a couple of Sgp at 406 (v 385.5) as they were also selling off and are now 398. Generally, I want to hold for a pullback and retest of the highs but in the case of Mgr it was a very quick 10% move with subdued follow through. Perhaps, I'll get a chance to re-enter after a pullback as I think the move is unfinished.

Despite the subdued tone of the day, most of my positions are moving in my favour with resource stocks generally firmer.

11.33 Good employment numbers have given us a little boost and the market is back up 25 points.

1.40 The market is definitely undecided now but is still up 19 points. My positions have outperformed generally today. One exception is Tse, a short at 412.5, which is up to 426. As with a couple of my other recent short positions, it's not as high quality a signal as the long positions because I'm looking for a 5th wave move which can be harder to pick than a straightforward 1-2-3 breakout for the start of a 3rd wave. Anyway, the stop is quite far away at 444 so if it turns out that yesterday was a failure to make a new low, then it may start to rally with the general market. I'll just wait and see though.

In the meantime, Csr, which I bought on a reversal, has confirmed some strength with a nice breakout today.

Cgf was one of the few longs where I took a substandard signal, buying a short term peak at 392 when there had actually been two recent buy signals at 373 and then 381. It was a new stock in my watchlist, replacing Axa, and I got carried away thinking that everything in the sector would just surge. It's back up to 392 now and in terms of the swing which started from the higher low of 8 bars back at 346, it's probably moving to a 5th wave high. Not the end of the run by any means, but I think that a new peak around the high 390s would allow me to escape an impetuous trade with a small gain.

2.09 Bsl has just dipped sharply as the company chairman is talking down prospects due to the AUD etc. I sold out at 300 (v 299) and although I'd be surprised if any of this is news to the analysts I felt it was better to be safe than sorry. I had been curious as to why Ost, another steel producer, was performing better. It could easily make a nice buy signal on a resumption of strength but I'm happy to be out and as I write it has slipped to 295.2.44 The market is still setting up for a reversal day and the index is just up 3. I've been hunting around for opportunities to take some profits. I decided earlier in the day that Qan looked complete in the short term. A judgement call, but one where the stock had surged, consolidated for a couple of days and popped up to 284 only to fail there. I sold a few earlier at 284 and 280 and now the rest at 278.5 (v 268).

This is kind of interesting because my general intention is to accept a pullback and expect a second run up in a case like Qan, but sometimes it seems fairly easy to get out when a run is faltering without chasing the stock down. There doesn't seem to be a correct answer anyway because over the last few days I've also been happy to ride out a move against me. Perhaps, a case by case approach is the best one with a preference to stay in for longer most of the time.

4.11 The reversal blew through but without much impact, a fall of 9 points in the Xjo index. Other markets in the region had modest sell offs and US futures are lower. I generally reduced my exposure today with no new trades and exits from Bsl (closed at 289), Mgr and Qan. I also sold small amounts of All, Awe, Ozl and Sgp. Fmg closed even after promising strength for most of the day, while Tse rallied against me but Cgf and Csr more than compensated.