Ain't that the way. Tue Oct 5

I'd been swimming against the tide for a week or so before my little break but I've come back to see that it's finally turned. I finished up at the end of last Tuesday, last Wednesday was a reversal day and by Friday's low the Xjo 200 had dropped 139 points from peak to trough in a couple of days. Yesterday's thin trade saw a 1% rally but the market has given up that gain and more to be down 61 points at 10.40 am.

Although we've held the Friday low of 4559, it looks to me as if a lower high will be confirmed and the market will be soft over the next week or two.

The strategy now is to short into strength so today is not the day for many opportunities to present although there are a couple which interest me.
The first one is in Incitec Pivot. I shorted and stopped out of this just before I went away - and really could have been more patient. The general picture remains of a stock which has had a great run but has now lost all momentum. There was a big reversal after it hit 365 and now, last week's high of 362 looks like a failure. It'll be confirmed as a lower high (rather than an interim swing) if the stock trades below 336 and this would signal a trend change, even if it's only likely to be a correction in the bigger picture.
The market overall has bounced back to 48 down and Ipl is back to 347. Not a bad level to short this with a stop in the mid 360s and the possibility of a quick move down to the lows of the range at 315-320 if that 336 level is broken. Still, while things are bouncing, I'll hold on and see if I can deal at a higher price.
I'm obviously not shorting into strength, but having made what I think will be a lower high, I don't mind shorting into limited weakness.

It's a similar story in Oz minerals. In this case the stock made a very marginal new high last week after a consolidation and I'm assuming this is a short term high. I can use 150-151 as a stop and a standard sort of correction would take this down to around 130. It's trading at 145.5 at the moment.

11.57 No action yet. I don't suppose I need to rush into any trades and the market is showing signs that it could have a choppy rally this afternoon as it's holding the line at a loss of 44 points.

2.23 St Barbara has been having a three week retracement but still looks quite bullish. I've bought today after early weakness has reversed. My entry price is 39 and for now I'll use the early September low at 35.5 to set my stop at 35.

This is a plausible sort of pullback for the stock to have had but there's no nice precise entry. I'm working on a basic 3 wave correction with a simple a and b wave followed by a c wave in 5. It's easier to see on a 60 minute chart.

3.14 The recovery is continuing and the Xjo 200 is down just 22 points. In the very short term, it's setting up for another leg up, perhaps above Monday's high. If it fails to get through 4620 then that possibility is out. I'm hoping that the bounce continues through to tomorrow because I'd like to put some short positions on. I have sold a handful of Ipl at 346 but only a third of the planned amount and there's a reasonable chance of it getting back into the low 350s.

Here's the 60 minute chart for the Xjo 200.

Oh, and the fact that the RBA surprised by keeping rates on hold is giving the market a nice boost. Still, the Japanese, Korean and Hong Kong markets are mirroring ours without that impetus.

4.10 The market rose briefly to 4620 and has closed at 4607. It looks plausible that it can rally further tomorrow but I'm still expecting a retracement only. St Barbara did reasonably well, finishing at 40.5 and on the short side, I sold a couple more Ipl at 350 with some left to sell. They closed at 349.