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.
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