Metals were sold down overnight, even after the US stock indices had started rallying back from early losses. The enthusiasm for growth has clearly waned and resource stocks are down again in the Aussie market. The ASX 200 futures were up early on the back of the US recovery to breakeven but that quickly faded. It did give me the opportunity to add a few extra to my shorts in resource stocks as they opened stronger but with a quick turnaround I've bought most of the extra stuff back.
I'm a bit wary now because the Xjo is closing in on the recent low and it may pause and have another attempt to rally. I'm nibbling at a few of my short positions which have fallen quite hard although I don't really want to go long anything yet. It seems like the carry trade unwind is still going strong so there's lots of negative momentum. Here's the Xjo chart.
12.41 I do have a new trade, another short position and it's in Ipl so it's almost a cut and reverse. When I stopped out yesterday it occurred to me that it would probably get close to the recent low at 285. I'm not super bearish - I think it could make a higher low - but some mild strength on the open allowed me to get short at 302 and I'll take half off around 290 if it gets there and give myself the opportunity to make a bit more on a new low. Stop is above 315. All in all, this is a bit marginal, it's just a quick momentum trade.
3.18 It's a tricky afternoon with the market holding above recent lows. I've decided that Ipl is just too marginal; there's some solid buying at 300 and I've closed out my short at 301. It's not really a day to force a trade, there are a lot of stocks making new lows but also looking extended. No obvious countertrend trades are showing up and at the same time I'd like a couple of up days before putting on new short positions.
4.25 The index held up to gain 3 points on the day. I covered a few more shorts so I have very little exposure for the time being. I'd like to see a minor rally from here.
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