Overplaying my hand. Tue May 25

With the benefit of hindsight, I looked a gift horse in the mouth after the Australian market rallied 2% yesterday to add to the intraday 3% rally from Friday's low. The damage isn't too severe this morning although Cey is back below my entry level at 364. It was probably unrealistic to expect the Europeans to rally much and the US indices are still lagging most others so further weakness was unsurprising. It's still not a clear picture here and we've simply given back most of yesterday's gains. Looking at the Xjo chart, the reversal is quite impressive and maybe this will be a simple retracement before a second leg up.

1 pm The trade for the day is a long position in OZ minerals. This has possibly completed 5 waves down and found support at the February lows. There was a decent bounce back on Friday/Monday and I've bought stock at 103 as it pulls back from the 106 level. Stop is around 96. As always, click on the chart to enlarge it.

2 pm The market is starting to drive down and I've sold my Ost balance at 292. I didn't get the reversal here that I hoped for so I'll wait and see if it drives down to a new low. Here's the 60 minute chart.

Cey is shaping up in a similar fashion. I've been jobbing around in the stock all day and have made a few bucks on it. I also sold a small amount on the close yesterday at 383 so it hasn't been a complete washout. But it's starting to look as if it might fail here and drift down to 345, 350 so I'm wondering if I should also cut my core position and try again later.

3 pm I did cut my Cey position at 363 even though it has been holding up for the last hour or so. But if I look at my watchlist, it's clear that the iron ore stocks, for example, have come back hard after having a strong bounce so I'm a good chance of doing some bargain hunting elsewhere if another leg up looks possible. I'm still loathe to do any shorting as there isn't much around that's bounced to resistance or had a bearish congestion.

4.15 The market finished down 3% in line with Asian markets while US overnight futures are also soft. It seems more like an orderly sell off today with buyers stepping aside. I think the opportunities are on the upside in the short term but I'm happy to have stepped out of most of my longs although I did a little bargain hunting on the closing match.