In a happy development, I might be showing signs of increasing patience as I get older. I don't know whether it's a healthy way to start the day but I set my radio alarm clock to go off just as the announcer is giving the overnight market run down. When I went to bed, markets were showing signs of strength which had evaporated by this morning so I consoled myself with the thought that Lgl is my only long (gold was up) and I had at least managed to put on a short position in Cey.
As it turns out, the Xjo has ignored the negative overnight lead and, by 11.40 am, had reached a peak of up nearly 60 points. So my patience was rewarded and I've been able to short some more Cey at a better price of 422, along with some more Sgp accompanied by new shorts in Bsl, Fmg and Ost as they retrace after gaps down yesterday. Of course, now I'm starting to worry that the retracement might be too strong and I'm shorting into the start of the bounce off a higher low. It's just the low level anxiety that I've yet to shake off and obviously I've put these trades on because the stops are manageable.
The story of the day is gold and with the AUD below US 82 c it means that the price in our currency is very strong indeed. It's increasingly likely that the takeover of Lgl by Ncm will go through as the deadline for other bidders is about to pass but I'm treating Lgl as a proxy for Ncm especially as it's trading at a 1 or 2% discount to the bid price. Ncm is charting very well. The first leg up in May was able to temporarily breach resistance at 3360 and after a higher low and a recent brief consolidation, it looks ready to surge up towards 3600. I've bought some more Lgl July calls, this time the 400 strike, and paid 24.5 for them, which was an implied volatility of about 31 or 32%. While I don't expect to make anything on an upward revaluation of volatility, the premium levels are reasonable enough and there are always sellers of options on the first good up day after a congestion. The main reason is to get some leverage. Here's the Ncm daily chart.
Actually, I bought a small gold stock as well, St Barbara Mines. It's got good reserves, increasing production, it's relatively low cost but mainly it's under new management having underperformed for years. The daily looks pretty good but I like the weekly chart. I'm long at 31.5.
2.22 It looks like we'll hold the gains this afternoon. The market has tracked sideways and is showing signs of pushing higher.
3.26 Talk about sellers in Lgl options. There's been a wall of them so that with the stock barely changed, the July 400 calls are down to 22. I'm aiming to buy a few more at that level. I'm not overly concerned, if there's going to be a surge, it'll be in the next day or so and the premium will be far less relevant in that situation once the options are deeper in the money.
4.16 It was a good close for the bulls, finishing up 55 points. It's setting up for early strength and lacklustre follow through tomorrow or at least, I hope so.
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