Sleepy hollow. Tue Jul 13

I'm feeling fresh but the market is even more sleepy than yesterday, despite the Alcoa result beating expectations and rising 3.5% in the after market. Alumina is up in sympathy but only a couple of cents and the general tone is for resources to return to their sluggish rally and oversold industrials to take up the slack. So in my watch list of stocks, for example, it's David Jones, Fairfax and Stockland Group which are rising - department stores, newspapers, property - while resource stocks are a tad weaker.
My positions are small and I've neither bought nor sold anything. I think we're in squeeze mode where the market is not especially bullish but keeps edging higher. The only stock that is tempting me is Fortescue, which is 3% lower this morning but still looks to be charting well. Realistically though, I could be a chance of picking some up around 420, so at 433 it's still too pricey.















You can see from the chart above that it's chopping around but has rallied further than you might have thought thanks to the resources tax back down. In the last week or so, it has made a little buy signal followed by a 3rd wave type rally. I'm just waiting for a tradeable pullback so I can try to capture a move which I think could take it back towards the top of the range at 455-460. For example, it's possible that I could get long at 420ish and pick up 30 cents or so. A break below the little 1st wave high of 416 would be an amber light and I might be able to keep the risk down to around 10 cents.

2.13 pm It looks like the V bottom scenario in the Xjo index is reverting to a more common pattern because we're now down 0.5% based on weakness in greater China markets - significant for us ahead of Chinese economic figures due out on Thursday. I've sold out my last Ipl at 281 and otherwise, I'm just waiting; either to cut longs or find a couple of new positions. At the moment, no new short positions on the horizon.

3.26 I'm not overly convinced about Mmx and along with most iron ore stocks, it's down today. I've stopped out a tick above my entry price at 198.5. I was influenced by the Fmg chart but it hasn't really jumped like that; in fact it still looks like a little abc rally before a new low. Better safe than sorry then.

4.26 A fairly weak close and I'm glad I sold out of Mmx which continued to slip as did Ago, Fmg and Mgx. Steel stocks were weak too, so there's obviously concern about demand.

I'm now thinking I'd like to short Mmx so if there's some early strength, that could be a new position for tomorrow.