Bye bye Lihir. Tue Aug 31

Lihir Gold is now delisted as the takeover from Ncm was officially approved last week. It makes the gold sector interesting because there's a huge gap in market cap now between Ncm and the rest. Public statements have suggested that the sector is in play and with the gold price holding on to unexpected gains ahead of the jewellery buying season, it'll be interesting if the jostling for position starts sooner rather than later.
I've got a couple of positions in mid cap gold stocks St Barbara and Intrepid and I've just bought a few shares in Avoca Resources at 303. My stop is at around 290 and I'm looking for a continuation of the rally after a two week congestion.

The US market handed back Friday's gains with the indices losing around 1.5% but the Australian market is still in bullish mode as we hit the last day of what has been a good reporting season.

A 60 minute chart of the Xjo, below, shows that we're retracing yesterday's gains. At present we're off by 31 points at 11 am and there's probably room for more weakness as 4380 is now support. Nevertheless, yesterday's action looks like a 3rd wave move, this is probably a standard pullback, so I would expect another drive towards or through Monday's high. It might have to be tomorrow though.

In the meantime I'm no longer enthused by any short positions. I only had a few small ones and I'm buying them back.

12.15 Healthy current account numbers are going to add to GDP and retail sales and building approvals are firmer too so it looks like rates aren't going to fall any time soon.

I bought some One Steel yesterday and I'm trying to buy some more at 285 as it has eased back slightly today. This is an attempt to buy a bounce off the bottom of the range with a tight stop. Stop would be about 275 and since the top of the range is between 325 and 335, there's a reasonable risk/reward equation.

3.44 There's been a more significant retracement this afternoon although most of my positions are holding up, with the exception of Sbm which is down 2 at 32.5.

I tipped out a few of the Avo at 305 to take my average back a shade to 302. I also got a handful of Ost at 285 and I'm on the bid for a few more at 282 in case there's some late weakness.

Since I'm now quite bullish overall, I'm just waiting out today's correction and banking on the rally resuming in a day or two.

4.14 The index finished down 1.1% as the month comes to an end. Last year the Xjo was at 4479 at the close of trading on August 31st and one year later we've closed at 4404 so that's about 2% off for the year although dividends would have improved things by 2 or 3%.