Flotsam and jetsam. Fri Dec 11

US and European markets were firm last night on minimal pre Christmas volume. At 11.45 am, stocks are bobbing around as the market flows back up 27 points after ebbing lower yesterday. The Xjo chart has been characterised by reversals lately and there's the possibility of a swing up over the next few days as the selling has lost momentum. A break of yesterday's high would be interesting. Despite the rally back in US markets over the last couple of days, I think that they'll probably make a lower high and sell off again so I'm not completely sold on the idea that we're due a broad rally. I've bought Aristocrat Leisure at 386 this morning on a reversal pattern. It's been a slow grind down on the back of US earnings disappointment and subsequent downgrades along with continuing strength in the AUD. Despite the downgrades, it's now well below most analyst valuations and with more optimism lately about the US economy and a USD rebound some of the headwinds could be about to ease.

There's a fairly clear 5 wave pattern on the daily chart so it's a question of whether the 5th wave is complete and the stock is ready for a retracement. There was one false dawn about 2 weeks back. I've bought most of my position at an average price of 386.

Other than that, I've bought a few Gff at 156 (v 159.5) and a couple more Tse at 387 (v 399).

1.57 I've bought back two thirds of my short in Fxj at 159 (v 160) as it's in a trading range still and I don't think there's a lot of momentum for further falls. Given the trading range, the better trade would have been the reversal 6 bars back with an entry around 167.

3.18 Short Cgf now at 401. It made a double top recently and is forming a sell signal with the clear break point at 400.

4.05 Leading into the match the market looks like closing on its highs. My new short position in Cgf traded down to 399 confirming the break but has blipped back up with the market firming. I bought a few more Gff at 154.5 (v 159.5) and Tse at 384 (v 399). Aio is close to a cut but I want to wait till Monday with this.