I wouldn't say that we've baked that outcome into the cake, the commodity stocks could easily get hammered in the short term, but it's also easy to imagine an outcome where QE2 is larger than expected and there's a great big short squeeze. I guess the upshot is that it might be wise to reduce position size, along with everyone else, and wait for the big announcement.
12.36 It's ever diminishing circles as we retrace yesterday's gains. Here's a 30 minute chart of the Xjo.
Arafura and Lynas have come back today. Aru is just down 2.5 while Lyc is down 10 at 148. It's back to around my entry point although I got a few away yesterday at 158.
I've bought some Pna at 74.5, about a third of my position size. They might have made a double bottom with the pullback - or not. If they tick lower I'd buy a few more at 72ish. Stop is close.
1.40 The loss has been trimmed to 16 points.
I'm thinking about my strategy vis a vis QE2. The news will come through before the Thursday session but Tuesday is Melbourne Cup day which might decrease activity on Monday also. I presume the market is going to continue to chop around until then.
The wisest course is not necessarily to just cut all my positions if they're charting well enough but I certainly want to decrease position size so I'll try to do that into strength.
3.25 Out of the extra Aru at 139 as they recover to be down 1. I still have some placement stock which doesn't come on stream for a week or so. No such recovery in Lynas which is down on the day's lows at 146. It's all very ho hum now that I've decided to sit tight until next Thursday.
4.16 The day seemed to take forever, down 23 points.
The month has ended, I scratched out a tiny gain but I'm glad it's over because if I hadn't started messing about with my approach, trying to change things, then it would have been another solid one despite the market being choppy and difficult.
There's a good chance that November will be better once the QE2 announcement is out of the way.
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