Take the day off? Mon Sep 6

I had a little voice in my head last night saying "take the day off". But I'm here anyway because I couldn't think of anything I wanted to do more (at short notice anyway). The market is up just 6 points after a strong night in the US but with Labor Day holiday over there it's a bit of a de facto holiday here with desultory trading. I looked to sell a few things early on because it's reached that mature point in the rally where it's the opening gap up, followed by some profit taking then maybe some late buying when something has been hit too hard. In the meantime, you hunt around looking for a stock which is moving in a different rhythm to the broad market and might offer some outperformance.
When the market is trending reasonably well, it can seem silly to sell anything but I do like to shuffle my positions around even if it's just to feel productive. Here's an example of one that I've sold out of, Challenger.

In the short term, it might have completed a leg up in a 5 wave pattern and although I suspect it's going higher, it's quite possible that it chops around for a few days and I can redeploy the capital elsewhere. I'm also a bit spooked because Macquarie is down 5% on a profit warning and I wondered whether there'd be a knock on effect in Cgf. Out of the last of the shares that I bought at 375 for a selling price of 393.

I've had a small win in Lynas this morning. I didn't write about this last week because it's a rocket and not really the trade entry I usually go for, I bought at 107.5 on Friday afternoon. It's a great trade in a bull market but chasing the breakouts can cost you a fortune the rest of the time. The 60 minute chart was supportive though and I didn't buy many....unfortunately. The other reason for chasing this is that rare earths are actually in a bull market - the analysts are madly upgrading estimates and in the meantime the company is also upgrading their resource size.

Here's the 60 minute chart as it looked when I bought on Friday. After a pullback towards the end of August, the stock had very easily regained what what an acceleration high (ie momentum increasing) and was pushing through on a Friday afternoon when you would have expected profit taking for a double top. That sounds very analytical but it was simple pattern recognition really.

11.27 I've bought some Ipl at 345 as the buying part of that position shuffling. I'm taking the view that it had a pennant shaped correction down and then pushed on to a marginal new high last week as part of a bigger move up. My stop is at around 332 and I'm hoping for some acceleration here.

I'm out of the last Iau at 97. The golds are really well bid and I've got cold feet about selling out of this already.

I was going to take most of the rest of the day off now, but I've had a call from the dentist. They've had a 1 pm cancellation so, reluctantly, I said yes. It's time off but not the pleasant lunch with my wife that I was imagining.

2.33 Out of Lynas now. Sold some at 117 before leaving the office and I've just sold the last at 127. They don't really look like stopping yet either.

3 pm I keep looking at the chart of Challenger at the top of the post. I think I'm premature to sell that. It hasn't moved since this morning and with no US lead to come overnight it probably won't do a great deal in the next 24 hours but I'm leaning towards getting back in on any minor pullback by tomorrow afternoon.

Ipl has rallied at least, it's at 349-350, but I'm not fully invested and can afford to hold both.

3.23 The market has moved forward steadily since midday and is up 27 points despite ex-dividend stocks dragging the index back by 10 points.

4.17 The index rallied through to the close, up 34 points. I sold out of the Fmg at 494, they were from Friday's dip. It's that sort of market at present, so not really many buying opportunities today.

I mucked around in Iau, buying back in at 99 and almost coming a cropper (in an inconsequential way) but it rallied into the match and I tipped them out again at 100.