Bohemian rhapsody. Fri Apr 30

"Is this the real life? Is this just fantasy?" I'm trying to work out which of the alternate universes is the most plausible one. Sunny skies prevail in the US as their market recovered briskly on the back of domestic concerns but from an Australian perspective there's a lot of caution around and we seem to be reacting more to the Shanghai market recently as the Chinese apply the brakes more heavily than anticipated.
It's also difficult to blithely accept that the European troubles have been cleared up with last night's Greek rescue package. Personally, I'm tending to a bearish stance but genuinely trying to find any buying opportunities to counter my short positions.
To business: I'm out of the extra shorts in Bsl at 266 and 267 but still short the first lot. Also out of the Cgf trading short - got a few yesterday at 412 and the rest at 415. And the Mmx the other day were cut at 250. They haven't even had a dead cat bounce yet, they're down at 240.

I do have a new trade to feature today but, again, it's another short position, this time in property company, Stockland Group. I thought about shorting the new swing high earlier this week but was unconvinced. Now, I'm shorting a retracement from the rejection of that level. I've sold at 401 and 402 with a few more on the offer at 405. The stop is a couple of cents above 415.

4.01 pm Going into the closing match out the market has continued to drift although we should still post a gain. We're up 12 points now.

It's an interesting mental exercise to be in a trending market after having chopped around a lot lately. I'm finding I need to be slightly more aggressive in putting on positions because we're more likely to see only minor corrections in a good trend as opposed to the 61.8 to 80% range of pullbacks that have been common more recently.

Cautiously pessimistic. Thu Apr 29

The sell off is accelerating and plenty of stocks are moving to a position of increasing certainty. Here's a Westpac bank chart as an example.

After a minor new high in mid April, there was a leg down to the bottom of the range, a failure to make a new high and now some acceleration down. Although the current sell off hasn't breached the swing low at 2663 in mid March, it's very close. There's decent momentum in this leg down and it's unlikely that it won't test the lows after a small consolidation.

To generalise from this, there's a strong chance that a top is in place; the pace of the sell off implies more to come; significant support levels will probably be broken shortly. Previously, the market looked toppy but was chopping around and making marginal new highs. Long positions looked like sucker bets and yet there were very few short signals.

1.56 pm There are no fresh trades today but I can mention Bsl where I've added to an existing short. I'd bought back some yesterday at 267 and have reshorted at 274. This is a position I initiated at around 277, punting that a small consolidation would break to the downside with the stop being the top of that range. It did break down and I've added some more short stock as it moved back towards that breakout level. It's close enough to the original stop level of 286 to make it worthwhile.

That sinking feeling. Wed Apr 28

An early post today as I'll be out of the office later. The outperforming US market has finally been dragged into line with the rest of the world which is topping out helped by the sovereign debt debacle in Europe.
In hindsight, I was too cavalier in ignoring the danger signs in a couple of resource longs, especially given my misgivings about the market overall. I went long thinking that they would probably hold above previous highs so that there would be a clean trend still. When they overlapped, while not confirming a trend break, it was definitely a warning signal. Anyway, I've cut a couple of things like Minara this morning as they've failed to hold key support levels and they clearly have more downside than upside momentum. There's not a lot of opportunity to go short but I'll be looking to short rallies more and more now.
My overall profit has only been mildly hit because shorts in things like Aristocrat and Centennial coal are performing well. I still haven't cut Mmx though, which gapped so far - 10% soon after the open - that I actually bought a touch more with the aim of jobbing the stock. It was only a half portion but I'm still down more than I'd like to be on this one. Sometimes with these smaller resource stocks, everyone wants to dump them (or buy them) on the open and a simple stop is not that smart.
Challenger is the one that got away. I had it on my watchlist to short yesterday but I looked around and suddenly it had retraced early gains. I thought I'd wait for some strength into the close which never came. However, it's not very hard hit today and I'm short a few at 424 although I'm hoping for a little rally towards 430 so I can put the rest of the position on.

It's slightly marginal but the chart is panning out as I'd hoped with a grudging new high and a sharp rejection. I think there could be some continued weakness over the next couple of days so it's a quick momentum trade.

Interestingly, the past few times that the market has fallen heavily, I've tended to get buying opportunities because the stocks have generally held trends whereas today has suggested that a lot of stocks are moving into downtrends so my take is to look for rallies that I can sell or stocks that haven't fallen very far. It's quite possible that there won't be  lot of opportunities today but, unlike the difficult last few weeks where stocks have lost momentum and started to chop, there should be a clearer picture from now on. 

A change of pace with a longer term chart....the weekly for the Xjo shows that the rally has had 3 stabs at 5000 and finally made it but with decreasing momentum. The first leg of the bear market stopped at 5040 in March of 2008 while this rally has peaked (if it has done) at 5025. Elliott wave theory would allow the possibility that the next wave down could go to new lows. I kind of doubt it. Even if you take the long term bearish case, it looks more likely that the rally over the last year was wave a of an a-b-c retracement. So you might see a higher low for b and then a c wave which fails to reach 5000 to complete the pattern.

Anyway, this is conjecture which is of limited use. Only good as a long term road map.

3.25 The market has performed surprisingly well today, helped by the general less bearish tone in Asian markets (bar Japan). We're down 60 points and I could definitely have been more patient in cutting a couple of my longs. Still, I'm reasonably happy with things and have added some more short Cgf at 428 and shorted some Fairfax at a touch above 173. I cut the little trading long there yesterday as there was no strength in the rally.

The resources have taken the brunt of the punishment today but if the fall continues then attention should fall the way of industrials.

Accentuate the negative. Tue Apr 27

Yesterday was a public holiday so we've got two days of action to digest on overseas markets. On a net basis the Europeans were strongly up, the US mildly firmer and yesterday Asian markets were very strong. The Japanese indices have held most of those gains and the Hong Kong market is just opening but in Australia bearishness has set in and early gains have evaporated.
I'm mildly skewed to the upside and slightly disappointed but not shocked as the Xjo index is pretty weak technically. Inflation worries haven't helped either as a higher than expected PPI has raised inflation fears.
A minor highlight has been a small bounce in Mmx which enable me to sell out the extra stock from Friday at a touch under 273. Atlas Iron, another smaller iron ore player, has announced a capital raising so it's quite likely that this was the cause of the sharp drop in Mmx late last week as investors may have been sounded out about the raising and sold others in the sector to make room.

My featured trade is another long in Fortescue. It really has lagged the other iron ore stocks but it's increasingly likely that the company will be able to fund most, if not all, of its expansion plans through internal cash flow and there have been some solid upgrades lately - notwithstanding a wide variety of opinion on the stock. For my part, I've gone long via some very short dated April 500 calls which I bought at 10.5 and then 7. I'm trying to buy a few more at 4. These expire on Thursday so it's an all or nothing trade but fairly low cost.

From a chart perspective, I'm disappointed that there's some overlap between this pullback and the mid March swing highs but I'm still reasonably confident that the rally has something left in it as there's a broad pattern of higher lows and higher highs.

Maybe I'm flogging a dead horse with my continued bullishness in Fortescue. It didn't get a lot of love today and weakened to 489 so that my calls are only worth a couple of cents now.

Stress test. Fri Apr 23

The market has rallied from some early weakness so that the Xjo is down 16 points, approaching midday, after a 33 point fall early. Resource stocks have been volatile and I've watched Mmx drop to 265 early although it's firming mildly now. I hadn't bought my full allocation yesterday so finished off with another tranche at 268. It's flirting with my stop levels so it was quite hard to buy more. A similar thing has happened in Minara, where I've bought a few more at 88.5 having paid 93.5 for some a couple of days ago.
Still, I'm encouraged by Cey. I've weathered the squeeze up to a minor new high and even shorted a handful more yesterday at 471 which I bought back this morning at 455. They're down to 448, a tick above where I shorted the first lot.
If I look at my group of positions right now, I'm not completely comfortable because I'm long high beta stocks like Fmg, Mmx and Mre. If the market is going to trend lower over the next few weeks - having made a sell signal yesterday - then these should underperform. I know I'm long them with reasonable stops but I do want to make a profit rather than a series of manageable losses!
One stock that stands a chance of outperforming is Fairfax. I've actually been short this for a few weeks but the losses have been grudging and I've cut and reversed with a long at 175. The recent swing low is 172 and I'll place my stop just below.

Ore inspiring. Thu Apr 22

The market is down 1.3% at 12.30 pm as we unwind yesterday's optimism. The Xjo has made a sell signal which is quite significant.

I'm skewed to the short side although I've missed the best mover One Steel, which is down 22 to 369. I'd been short and squared up and yesterday tried to re-short the stock after a minor rally but wasn't agressive enough. I've managed to find a way to get short Bsl today with a fairly tight stop.

However, the trade I want to focus on is a bullish trade in an iron ore stock, Murchison Metals - which explains the shocking pun in today's title. I hesitated about buying into the first leg of the pullback 3 days ago and I mentioned that I'd like to buy the stock in the high 270s. It briefly touched 270 on stop loss selling and I've gone long at 275 with the stock down 15 on the day. My stop is just below the previous swing low of 264.

On a surface level both the Xjo and Mmx charts have formed a sell signal today but I think there's a key difference in that the Mmx is pulling back to a breakout level following a congestion whereas the index has been losing momentum for a month with only a series of minor support levels the best of which is another 60 points away.

To update a couple of recent featured trades. I scrambled out of half of my Ipl at 333 but they've slipped now to 325. I also tipped out the Awc at an average of around 169. Meanwhile Cey is still a modest short for me and still outperforming but also looking like, having made a minor new high, it is ready to swing down again. Qan is about steady as the dust clears but the threat remains. Not many winners so far this week but I've managed to hold the fort with a breakeven result so far.

Comings and goings. Wed Apr 21

I've just been reading electronic local's always interesting blog. He reiterates that exits are the most important part of his trading. I think he's right in general, having a good, reliable and robust exit strategy is vital for almost anyone who wants to trade professionally.
Funnily enough though, it's such a motherhood statement that I've spent lots of time trying to improve how I get out of trades and it's only recently that I realised my key area of work should be on trade entry. Perhaps influenced by any number of trading books which will tell you that most traders will initially be in profit on any new trades, I had been quite haphazard when putting on trades. Since I've found an approach which suits my trading style I'm finding that stress is lower, profit is up and it's easier to be disciplined with stops. In fact, the only stress seems to come when I've been impatient with a trade as I was with Cey the other day.
I've put on a few new trades today. One of them is a small long position in nickel stock, Minara. This has been running along with the sector and has had a gentle pullback from the last surge. I was really hoping for a cheaper entry, something around 88, but I've bought some this morning at 93.5 as the stock is finding support. My scenario is that this is a 4th wave correction of the move from 80 on March 26th to 101.5 on April 7th. I expect a previous high at 85 to hold so my stop will be a cent or two below that. As a risk/reward situation it's only about 50/50 as I'm expecting a marginal new high but considering the strength of the trend I think that the possibility of a new high, or a rally at least, is well above 50%. Nevertheless, I've been cautious and put on a smaller position than usual.

Too much discretion, too little valour. Tue Apr 20

I was looking too hard at short trades yesterday and pushed it in Cey.

I was aware that the corrective move which I traded on Friday might have been complete since there was no clear top and in all likelihood the crucial support level is more like 416. Anyway, it hit 466 which was the recent high and has tailed off again. I did buy a couple back at 442 yesterday but missed buying a couple more on the close because of a persistent Telstra salesman on the phone.

Too little valour is in relation to the buying opportunities in iron ore stocks. Fortunately, Fmg and Mmx which both surged on the open, have eased back.

My trade for the day is a short position in Qantas which seems pretty obvious in relation to the threat of the Icelandic volcano rumbling on for months. Still, I'd been waiting for a plausible set up and got it today. Yesterday the stock just fell early and partially recovered while today there was some mild early strength which faded so I shorted at 292. The recent high is 302, so my stop is a little above that.

Clean break. Mon Apr 19

Looking at the Xjo chart, it has broken below the range of the last two weeks as we follow the weak US example.

As I write this, at 11.48 am, the Xjo index is down 61 points or 1.2% which feels sufficient for the day, if not slightly overdone. However, US overnight futures are modestly lower and other markets in this time zone are weak too.

Having modified my entry technique so that I would be selling into strength or at least retracements, it means that I haven't put on any fresh shorts today. I've got a few that I'm watching and Cey, which has recovered to 448, is the closest. However, I'd prefer to see how close it can get to last Thursday and Friday's high of 454 before I do anything. If it breaches the highs then I'll be less willing to short it.

Awc gave me a scare this morning when it opened down at 164 and traded at 163.5. It was flirting with my stop level (I normally give myself a cent or two in case of minor new lows/highs) but has had a decent reversal to be unchanged at 169. After its big fall there's a chance that the reversal could squeeze up into the low to mid 170s today if the market bounces slightly. I'd probably let discretion be the better part of valour and tip them out given that a minor new low was made today.

2.10 pm The market has had no significant bounce yet and it edged down since the earlier post. Other regional markets and overnight US futures have weakened further and the financial stations are full of speculation about Goldman Sachs and its role in subprime.

The Cey rally has stalled and I'm short there at a 446.5 average.

I'm interested in the iron ore stocks on the buy side. I think most of them are in strong trends which probably are incomplete. There are two in my watchlist, Fortescue and Murchison and they're both getting close to support. Here's the Mmx chart.

It spiked briefly down to 281 this morning. I'd be happy to buy some between 275 and 280 as there's a swing low at 264 which could act as my stop. I'm tempted to buy some here at around 286 but given the tone of the market it's a reasonable strategy to hold out for a better price.

Collapsing over the line. Fri Apr 16

The Xjo index actually closed above 5000 yesterday at 5002. It was above 5020 during the day but failed to hold indicating that there's not a lot of buying interest at these levels. Today, we've latched onto some after market weakness in the US following a seemingly good Google result (sell on fact?) and the index is down 22 points now at 11.40 am.
I was going to write about a short in Centennial coal but the horse has bolted already. I was able to short some at 451 and I've bought most of them back at 435 on a quick slump in the share price. That leaves me with a long in Alumina. I've bought at 170 as the stock has been retracing from a recent high of 189.5 and the last swing low is at 164.5. It looks pretty dreadful but the risk reward stacks up and it was looking very good at the time when it peaked.

Not a high conviction trade, more of a playing-the-odds trade.

4.15 The market ran along fairly quietly for the rest of the day with a late afternoon rally reducing the deficit to 17 points. Awc held ok, finishing at 169 as did Ipl, while I sold out the rest of my Fortescue options.

Pivot point? Thu Apr 15

A very good night on the US stock market hasn't quite been replicated in this time zone with most markets only mildly stronger. The Aussie market is up 12 points at 1.41 pm on a day which has weakened gradually since the open.
My trade for the day is in Incitec Pivot which has been grinding down for a month. I was actually short it for a little while after a small retracement rally a couple of weeks back. Anyway, I've gone long today at 331 - rushed into it slightly - and I'm looking at a stop below the recent lows of 322 and 323.

The action since the high in January all looks corrective. I'm banking on the c wave part of the correction being complete or close to it. I suppose if I'm forced to stop out I'd still be looking for an opportunity to buy soonish.

Other than this I've had a quiet day. Aristocrat is weaker today. I don't know why it has fallen but there have been a couple of big lines of stock put through at 425 and 430 which has dragged the market down as low as 434. It's at 438 now where I've bought a couple of my shorts back.

3.42 Well, Ipl isn't doing well. It's down at 323,324. I'm going to stretch my stop to the February low of 314. Always a bit dodgy but I like the trade: a correction holding within a trading range with an extended little move.

The problem isn't really the trade or the stop - the problem was rushing into it at 331.

Not overly convincing. Wed Apr 14

At midday the Xjo index is up 0.5% which is a muted bounce after another small up night in the US which was followed by a good result from Intel after market. Alcoa was expected to drag the US indices down last night and there was early weakness which didn't stick.
My feature trade for today is a short position in Aristocrat, maker of gaming machines. They've been retracing from a big sell off since early December and I'm looking to sell into what I'm hoping will be a lower high. My stop will be just above that recent high at 473 so I've just sold a handful so far at 455 and I'd like to sell more a little higher so as to limit my risk.

3.50 It's a better performance now with the Xjo index up at 4993 having been as close to the magical number as 4997.

Aristocrat hasn't joined in though and I sold some more at 454 to be short at an average of 454.5.

Fortescue is back up to 535 and I sold out a third of my options at 34.5.

Sticker shock. Tue Apr 13

The Dow Jones Industrial Average managed to close above 11000 last night although the S&P 500 couldn't manage 1200. Meanwhile, the Aussie equivalent is 5000 on the ASX 200 and we're shying away from it. Admittedly, the all ordinaries managed to break that level yesterday but these days it's the top 200 index which is the most watched benchmark. We haven't been helped this morning by the opening shot in the US earnings season with a fractionally disappointing (didn't beat estimates) Alcoa result after the US market close which has dampened overnight US futures and taken some of the steam out of our resources sector.
So down 18 points at 11.37 am and I haven't initiated any new trades.
Fortescue has been upgraded quite dramatically by Citi and that's holding its ground at 526 but is well off an early spike to 540. I sold my stock out yesterday and this morning in the high 520s leaving me long the April 500 calls.
I started shorting One Steel yesterday with the idea of trading a pullback with a tight stop. I sold a few at 409 and thought I'd wait for today to do any more as yesterday was stronger than I'd anticipated. Anyway, they've had a problem with a blast furnace and they gapped down as low as 394. I sold a few more at 403 which I bought back at 395 but it's slightly disappointing as I was hoping to get short a reasonable quantity at around 410 when planning for the day. The Ost chart is below.

3.51 The 5k aversion rolls on and the market is down 37 points with Alumina one of the worst performers, down 11 cents or 6% to 177. Fortescue is holding up pretty well at 520 although it's generally a day for defensives with Telstra the best performer. It's a shame about One Steel which is down at 394 - I had stock to sell on a bounce to 403 over lunch but it never made it. My other steel short is ok though, Bsl is down 6 at 289.

Beowulfescue. Mon Apr 12

The Fortescue saga continues and I've gone long again, this time chasing an entry because it's a reasonably tight breakout.

There's a small swing low at 496 so using that as my stop, I've gone long at 512. It was an early peak but the stock is running again now and is up at 515. I've also bought Fortescue April 500 calls at 21 cents which were quite cheap, probably because the stock has been chopping around for a month or two.

I've been substituting a few of my watchlist stocks because I never seem to do much in things like Mirvac. So one of the new stocks I've chosen is Murchison Metals which is another West Australian iron ore stock. I wasn't confident enough to buy a very minor pullback last week and now the stock has sped away like most of the sector. Unlike Fmg, the relative distance to that last swing low is too far for me to be comfortable with buying the breakout. I'll be looking to buy any corrections though.

I've just airily said that the Fortescue options were cheap. Well, technically they were expensive because recent volatility has drifted down to 20% and I bought these short dated calls at an implied volatility of around 30%. However, since I think the stock is breaking out, the historical volatility goes out the window if I'm correct and the options in this stock generally carry more premium than they do right now.

With the rest of the sector running, I'm sufficiently confident to buy something short dated and slightly in the money so as to limit the premium I'm paying and get more equivalent stock exposure.

3.42 Lihir update: out at 398 because despite the gold price continuing firm (in USD terms) Newcrest is down 2%. This means that the discount has narrowed. Newcrest are saying that their offer is full and fair also so although I'm pretty confident that they'll sweeten the bid eventually, I don't want to hang around forever.

Here's the chart.

US reporting season approaches. Fri Apr 9

The US markets managed small gains last night as a rebound in retail sales papered over poor jobs numbers. Reporting season arrives next week in the US and it might be the catalyst to break the stalemate. The Australian market is slightly firmer today but off early highs with only one stock in the top 20 having moved more than 1% (Woolworths - down 1.3%).
In my universe of watched stocks, I've added a couple of positions where I've sold into the bounce with the hope that a stock will make a lower high while using the recent high as a stop. Qantas is neither here nor there so far (12.26pm) but I've had some joy in Bsl which has quickly shed some early strength. I'm short at 297 and 296. Here's the daily chart.

3.56 An update on the state of play with Lihir. The chairman has made conciliatory noises about the takeover and stated that shareholders would like to see Newcrest raise the bid price. This has served to narrow the discount to about 17 cents. It jumped into the high 20s earlier in the week. Stock is trading at 400. Newcrest is still firming and the gold price is holding up, tending to edge higher.

Slow train crash. Thu Apr 8

It's quarter to 12 and I've had the Manchester United v Bayern Munich game on in the background. It took till about the 75th minute but you could just "smell" that Bayern were going to get the equaliser that would put them through on the away goals rule. Anyway, the market here seems to be following a similar pattern. We're down a very modest 22 points but the overnight lead was very weak. Greg Peel has pointed out in his morning round up on FnArena that the US market only rallied very late and the volume on this decent sized down day was 50% higher than recent volume on the grinding up days.
I've taken the opportunity to sell out of my long positions in Fortescue and Linc Energy on trailing stops. I'd like to buy back into both positions but I think I'll get a better chance.
Here's Lnc.

I bought at 167 and 162 on the pullback from the 184 high. If the subsequent rebound turns out to be part one of the next move up then I might be a chance of getting back in somewhere in the low to mid 160s. My exit was at 174.

As the Greek situation continues to sour at the expense of the Euro, attention remains focussed on gold which I highlighted on Tuesday. The gold price was strong again last night and closed above the previous high of USD 1145 which is quite encouraging. Ncm is up 22 and Lgl is still recovering, back up to 397 which is a discount of 20 c to the equivalent bid price.

12.50 pm I've added a link to Brett Steenbarger's excellent blog TraderFeed. It's full of interesting and useful information with a psychological perspective. I've been reading a few bloggers over the last hour or so because the market has traded in a very tight range. Tim Price at thepriceofeverything is particularly gloomy right now and gives a European based reality check which is in useful contrast to the China led bullishness driving the Australian market. He makes a very good case for gold in the medium term. 

4.23 Not so much a slow train crash as a freeze frame. The market barely moved all day and closed down 23 points. Still, Linc fell further to close on its lows at 166.5 so I might get a chance to buy back in tomorrow.

Simplicity. Wed Apr 7

A couple of weeks ago I decided to be more consistent with my entry into positions. I would no longer chase breakouts or put on positions where the stop was uncomfortably far away but I would continue to try to pre-empt moves if I felt there was a clear trend or potential trend to support my view with the proviso that the stop must be tight. I wasn't changing the sort of patterns I'm looking for or the type of stops or exits that I take or my approach to position size, for example, so I wasn't sure how significant a change this would be.
So far, it seems to be both significant and positive and also to have had unexpected consequences.
For example, I thought I might put on fewer trades because I will now buy or sell only when there's a close stop and/or there's been a pullback after a move. The opposite has happened though because I will generally pre-empt a resumption of trend or a breakout as long as the risk is clearly defined. I'm putting on positions which I might have missed out on in the past because once there was confirmation, it might have looked too extended to take the trade.
Additionally, there's more clarity. If I realise I've missed a nice move but the trend looks strong then I just set some pullback levels where I'll try to buy. In the past, if I thought there was some more short term action I would often try to jump on the moving train and sometimes fall off, of course. The corollary to that increased clarity is decreased stress. With fewer decisions to make the trading day becomes much more pleasant. Some traders talk about stalking a trade and I'm starting to do this more often. It might not suit everyone but an increase in patience is just what I need.
Increased focus on tight stops has also meant that I'm more willing to put on short positions if I'm bullish the broad market, for example. There's no logical reason to expect every stock to move in tandem with the market but quite often I find it psychologically difficult to ignore the broad market when looking at a stock chart. Knowing the stop is tight gives me the crutch that I need.

Watching and waiting. Tue Apr 6

The market has had a nice little lift on the back of good US jobs numbers and has shaken off a 25bp rise in the RBA's cash rate to 4.25%. I haven't really done anything today in terms of new positions.
Most things are going quite well except that Lihir has had a 22 cent drop to 382. This is despite a rise in the price of Newcrest of nearly 4% which adds approximately 14c per share to the bid price which equates to over 411 now. So, the stock has gone from a premium to the bid to a discount as brokers have generally suggested that Lihir should accept the bid and some are even nervous that Newcrest might walk away. Given that they only initiated this process recently, the consensus is that Ncm will hang around and might sweeten the bid. There's also a realistic possibility of another bidder emerging for Lgl.
Personally, I think it's an overreaction on the downside while the chart tells me nothing as it's just some gap filling. The Newcrest chart is interesting though. It actually looks very good itself and could drag the Lgl price up even if the discount remains.

Another salient point is that the share register for both is dominated by many of the same institutions and if they feel that the bid should be accepted they will have a fair bit of sway with the company.

Here's a chart of spot gold which looks like it is early in a third wave with plenty of upside potential.

Nice work if you can get it. Thu Apr 1

Another takeover bid, this time in Lihir Gold, from fellow gold miner Newcrest. It's a scrip offer with a small cash component and amounts to about 381 at the moment (1.30pm). I bought a few on the pullback last Friday at 300 and a few more yesterday at 306 on minor weakness again. The company has rejected the bid but has made it clear that they will sell at a better price. There's some chance that an overseas miner might be interested and the stock has been trading above the bid price, mostly in the 390s.
A small fly in the ointment has been that other smaller resource stocks have risen in sympathy including Awc which is through yesterday's high. I haven't stopped out yet, I should have done at 178 and now the stock is at 179.5. I won't leave it much longer...or further. I'm holding off because I can see a small possibility of weakness in the index futures which might drive things down.
My book is quite balanced though with some longs and shorts and close to delta neutral.

3.10 The Spi sell off came and went fairly briefly but Awc has drifted off the early highs. I'm out at 177 versus 173.5.
Just had another stab at Fortescue. It ran up this week so I now think that the chance of further corrections towards support are much smaller. I've been waiting for a pullback and it dropped about 50% of the little move and then stabilised. Long at 493.

Click to enlarge

4.10 Asian markets have ignored the overnight weakness in the US to rally nicely today and the Australian market has followed that lead with a late flurry helping things along. It's a good start to the new quarter and the market is now closed until Tuesday.

If you're having some time off, enjoy your break. More next week.