Tale of two cities. Thu May 13

Most of the major indices have the same broad pattern; a slowing top, a lower high followed by a plunge and a recovery, but the US and the German indices are definitely stronger than most others. Here's the DJIA.

Whereas here's the Xjo index chart.

The Xjo chart is obviously weaker, as are charts of the major Asian indices, the FTSE 100 and most of the other Euro countries. I suppose it reflects the sentiment that the US and Germany are in the early stages of economic recovery while Chinese growth might have peaked so that enthusiasm in this part of the world is limited. Equally, the European countries in deficit strife are also performing badly.

I can see how the US and German markets could spike up to marginal new highs but the structure of the charts is too weak to sustain those levels in my opinion. However, a short squeeze rally in those markets could easily push us up for a few days as we could rally another 150 points without negating the current downtrend.

With that in mind, I'm looking at some short term longs which could be quickly reversed if they rally up sufficiently. Generally the idea is for smaller mobile positions while we're in this fast move except for the gold sector which I'm more confident about. I've put on a few short term longs in Aio, Cey, Mre and Wsa.

But the feature trade today is a long position in Ipl which has a slightly stronger chart. I'm looking for a second leg up after the first recent bounce from 285 to 319. In the big picture, it looks like a slow, choppy 3 wave correction leaving open the possibility that the stock could have more than just a minor retracement rally. Long at 311 and realistically I'd be happy with a short term move to 330, 335.

4.06 Approaching the 4.10 match out, the market has held its early gains and is ticking higher now. Up 70 points with the prospect of a few more to come. I'm out of my Lgl at 314 but still long the options as the price rise has increased my exposure. My short term stuff hasn't really performed today but I'm holding most of it overnight.