Out of breath. Thu Aug 12

The US indices had a nasty night and fell over 2.5% so despite leading the way yesterday we fell another 60 plus points on the open. It's probably too much now and I've bought a couple of things for a short term trade. I'm keen to put on more short positions but I want to wait until they come to me and in the meantime Linc is a minor long position. I've bought at 170.5 with a stop at 156, a recent swing low.

12.30 Not a lot of change. The market has just about held above the early lows and is chopping back up with very little conviction. I sold out of half of the Lnc at 174. I also bought back half of the Fxj earlier at 143 but should have bought the lot. Fxj is the sort of stock that outperforms on a day like today and it's now up a half cent at 146.5. It's a tiny position though and I'll look to short more if it can get to 148.

Today is the sort of day where you can possibly make money intraday, ie the third consecutive big day down with an opening gap. You have to watch closely though and at the moment, this could be a pennant style correction on the intraday chart which fails as the market closes at new lows or it could evolve into a decent rebound. It's too hard to pick at this stage but the rebound is the one that offers the more profitable opportunities because the market is already heavily sold down so will probably only grind lower if it fails.

Further to this, the 10 minute Xjo chart above doesn't give me the impression that the fall is over, I'd want to see more congestion and a minor new low; my point is that the tentative rally we're having since the opening low has plenty of room to move without negating the downtrend.

It's quite possible that we firm up this afternoon and make another new low tomorrow morning on more overnight weakness.

1.56 It turned out to be a pennant with the Xjo making an intraday low a few minutes ago. It's only a minor one though and Asian markets are starting to recover so I'm holding on to what's left of a couple of short term positions.  

4.14 The low mentioned just above was a minor turning point and we rallied slightly to close down 55 points. I made a few bucks out of the intraday longs but with no significant bounce it was all quite inconsequential.

I kept half of the Linc long. The 156 stop mentioned early was an emergency stop if I held it overnight but really, most of the positions today were very short term. Hence my willingness to tip out half of the Lnc for just a few cents profit at 174.