Hogmanay! Fri Dec 31

A couple of friends from Edinburgh have just turned up to stay and of course, they love their New Year's celebrations so the timing is impeccable.
On the open, I've sold out the last of the Lynas at 205 and a third of the Aru at 149.
That leaves my two main positions as Ozl and Aax. In Aax, I'm having to wait out a retracement. 295 is good support and if I can see something constructive - which may not be for a couple of days - then I'll buy more stock.

Ozl is a touch weaker in thin trade and I sold out of Iau at 201 on a whim, really. There was some logic, the market is too thin at the moment for this one and I'm unconvinced about gold but I probably could have held on as the chart is constructive enough.
Otherwise, I'm still monitoring Karoon and may add more today.

1.14 Just under an hour left before trading is over for 2010.
I've gone long Murchison at 128. I've tended to leave this alone recently because it still looks like a 4th wave consolidation to me, but it's got a nice rounded shape right now - I think some people call it a tea cup pattern. Even a retracement rally could run up to the 140s or 150 so there's room for a bullish trade. The 60 minute chart looks positive too. Stop is in the low 120s.
First the daily chart....

....then the 60 minute chart.

Meanwhile, the index is finishing the year on a soft night with a 26 point drop so far. There's not so much window dressing as there used to be so it will probably finish close to where it is now.

2.14 We still have reverse window dressing (window smashing?) and the market was hit for 20 points on the match out to close down 45.
Bought a few Ozl at 172 in the match.
That's it, 2010 is done and I hope it was a good year for everyone.

Next cab? Thu Dec 30

There has been good continuation with the rare earths rally. Lynas is up 16 at 195.5 and has reached as high as 202. Sold half of my balance at 195. Also sold a quarter of the Aru position at 143.5. Arafura is up a more subdued 5%.
I'm still quite keen on Ozl to have a 2 or 3 day surge. The stock is just hovering below a potential breakout level. The longer the price stays near the highs, the less likely it seems that it will have another leg down despite being below an interim high of 175.5 which was reached on December 15th. Bought more at 174.

Pna is also a copper/gold stock and has just reached new (recent) highs at 88.5. The chart lends support to the bullish view.

Meanwhile, the LME copper chart is stronger again than Pna. Another positive leading indicator.

11.45 The market is up 20 points, not a lot of change in the last hour or so. I'm off to lunch with a friend and I'm reasonably confident the market will hold up. Happy enough to leave things as they are.

3.23 Not a lot of change, up 18.

I've had a nibble at Karoon, buying a few stock at 737. I'm looking at a second attempt at rallying and using 720 as a stop. There's plenty of support around here but the stock is quite illiquid.

4.11 Well that's time for another day. The Xjo index managed a gain of 15 points. Tomorrow is New Year's Eve and another shortened trading session with a 2.10 pm finish scheduled.

Surprise pop. Wed Dec 29

A late but happily received Christmas present came along this morning in the form of a 35% reduction in export quotas for Chinese rare earths. Both Arafura and Lynas have popped. At present Aru is up 11 cents or 9% at 133 and Lyc is up 20 at 182 which is a rise of more than 12%.
I've sold a few Lyc at 181.5 but kept all of my Aru longs. The Lyc chart is further advanced but the Aru chart looks quite explosive.

I'm confused about the gold chart (in USD) at present and was surprised by a $22 rise, taking it back above 1400.
Rather than trade Avo, where I've been caught out because the situation has been muddied by the approaching merger with Anatolia, I decided to jump into a middle sized long position in Intrepid. This has been the cleanest chart until recently, although I'm only looking to trade a retracement rally here. Long at 195 with two recent lows around 185 and a stop just below. I'm hoping for a quick move to, say, 215. (I would have been better buying Avo actually, as Iau has gone nowhere and Avo has run steadily all morning). So be it.

12.21 It's another strange old day with the market falling 21 points for no obvious reason. There's a little sell signal on the Xjo 60 minutes chart.

The overnight lead was flat and metals were firmer. While we were closed the Chinese authorities raised rates and it looks like there was some weakness in the Shanghai index but the summary I watched indicated that there was a sense of relief that the wait for a rise was over.

I've done some thinking about sharpening up my trading and one point is to get out of underperforming positions sooner. Ie, if it's not running or looking very positive then close it out. It's an obvious point and a tactic I've employed with mixed results previously, but now that I'm broadly content with my techniques, I'm ready to be more focussed.

To that end, sold out most of my Ost at 261 with a few at 262. Also sold a third of the Wsa at 604. Holding fire on Ozl as I'm undecided for the moment and thinking of giving it another day. I can't decide whether I think it has made a lower high in three waves or is ready to push further. Copper is trending strongly and I wonder whether it's just the Christmas lull which is keeping this subdued.

3.06 Asian markets are mostly higher with the HSI up almost 1%. It has helped the local market to pick up and the loss is just 11 points now.

Lynas has dipped to 177 but Aru has held up although I've sold out a small amount at 133 as the stock consolidated there for a couple of hours. Intrepid is catching up with the other gold miners and is at 199, I bought more stock at 198 and took my average entry price to 196.

4.14 The Asx 200 recovered throughout the afternoon and the day's drop was limited to 2 points. Best performers were the rare earth stocks with Arafura pipping Lynas with an 11% rise to close at 135.5.

Sold the last of my One Steel at 261.

Gandalf, Merlin and co. Fri Dec 24

In spectacularly meaningless trading the index is down 9 points after an hour.
Just back from the gym, only the swim to go to make today feel productive and satisfying.

I've been planning to review Market Wizards by Jack Schwager but must have given it away or something.
Since, I can't find the thing, I'm going to paste in a summary from wikipedia.

Market Wizards is a book written by Jack D. Schwager and published in 1988 in which he interviews a wide range of traders with excellent track records of profitability.
The book contains four parts covering interviews with traders in a wide range of markets. The interviews contain a mixture of facts about the trading careers of the interviewees, their philosophy, and many trading anecdotes. After each of the interviews, Schwager summarises what he believes are the key things to be learned from that particular trader. The book also contains a fifth part on the psychology of trading and two appendices on program trading and basic options theory. If you want to get some insights, by way of verbatim interviews, into the thought processes and trading rules. [1]

Among thosed profiled in this book are Ed Seykota, Bruce Kovner, Paul Tudor Jones, Michael Steinhardt, Van K. Tharp and James B. Rogers.
 
I loved this book and read it a number of times, not because it gave me any specific trading techniques or hard and fast rules but because it was inspirational. In fact, what impressed me most was the diversity of styles - many of these traders were diametrically opposed in their approach, time frame, trading philosophy and world view and yet they were all successful and they all loved trading.
I was to see it again on the trading floor and in trading rooms where very different types could flourish in their own way.
 
Obviously there are constants of risk management, discipline, consistency, the ability to take risks etc. but this book is not telling you how you should do this but showing you how you might.
And, it's fun too; there are great trading stories as the old warhorses tell you about the slings and arrows.
 
It was very successful, so much so that Schwager wrote "The New Market Wizards" and then "Stock Market Wizards". I was hungry for all these stories and I consumed these too. I also bought and read two similar books called (I think) "Masters of the Market" and "Masters of the Market 2".
It's years since I've looked at any of them but they were terrific fun and great confidence builders for the budding trader.

2.17 Market fell 22 points.
Merry Christmas. More next Wednesday.

New Year's resolutions. Thu Dec 23

I don't want to be mistaken for Santa so the New Year's resolutions have kicked in early. I've started up swimming and going to the gym in the last couple of weeks and that's the main reason I'm still coming in to work.
The market is up 12 points after an hour on pre-Christmas volumes. Aru and Lyc have retraced a couple of cents while Wsa was up 15 early - I sold a few at 614 - but is back at 602. The others haven't moved.

My trading resolutions revolve around improving entries. That has been the success story of the year for me but I think I can do better. Mind you, I haven't done the work on it yet and that's what I'll be focussed on for the next week or two.
What's happening now is that I'm identifying a stock that I want to buy (or sell) and identifying entry points that should offer a good risk/reward. The trouble is that the stock price can continue to grind lower for some days even if it does resume the trend. I would like to get in as late as possible and minimise this time, ideally, I want to get in when the stock is just starting to accelerate.
Here's Awe as an example. After the explosive burst in early November, I was looking to buy for another test of the highs. I started in the mid to high 160s and eventually bought more in the low 160s, trying to buy and sell a few to take the average price down before, after nearly two weeks, the stock took off again.
What could I do better? I could argue that the purchases in the mid to high 160s were premature because support was too far away or that there was no obvious sign of completion of the retracement. This could be a reversal day after a new low following a congestion or two to three narrow range days curving up as in late October. Anyway, this is the sort of stuff I'm planning to work on.

3.27 It's been another strong day for the market with the Asx 200 index up 28 points. The action is heavily skewed to majors. I checked a few minutes ago and 18 out of the top 20 stocks were up whereas in my watchlist of stocks, which are generally smaller but still in the top 200, only 16 of 30 were trading higher.

4.10 That's it for the day, a rise of 21 points, mainly confined to the banks and large resource stocks.

Tomorrow's a shortened trading session. Should be a 1 or 2 pm finish.

Care and maintenance. Wed Dec 22

It's very quiet here today. A few of my positions looked very promising early but have just drifted back since.
The Asx 200 index pushed on to a minor new high at 4786 but quickly lost momentum. It's still below the November high and well below April's peak above 5000. Looking at the last 6 or 7 months, the index eventually forced its way back through 4600 in the middle of September and has spent most of the rest of the year struggling to push higher. The first attempt in early November plunged straight back to support. This run up has been less laboured but is still very cautious. My take is that we might just keep grinding up, climbing the cliched wall of worry.

Molycorp is the largest of the US rare earths stocks and it ran up 13% last night on a tie up with Japanese company Hitachi. It gave an early boost to Aru and Lyc but they're barely up now. Copper was strong again and Ozl is up 2 at 174. If Oz Minerals pushes through last week's high of 175.5 it reduces the prospect of a retracement rally and increases the chances that the share price could accelerate to new highs. Trouble is, there's so little interest now that it might have to wait until the new year.

4.12 The index closed higher by 6.5 points on a quiet day.

Aru and Lyc rallied again after the initial pullback and I sold a quarter of my Lynas out at 164 to cover the possibility of a second leg down if it fails to pass 166. It closed at 166 so looks pretty hopeful. I added a small amount to my existing position in Aru at 121.5 and they closed at 125.5. Only blot on the copybook was Aax which has retraced to 312. I didn't need to chase but will wait for a sign of a turnaround on the 60 minute chart and look to buy more if it holds above the breakout level in the mid 290s.

Taking their own sweet time. Tue Dec 21

The Dow was lower but the broader S&P 500 gained a few points as did the Nasdaq. Base metals were mixed but performed well with the USD stronger. The Korean peninsula has calmed down and the Aussie market has unwound yesterday's sell off to leave the Asx 200 with a gain of 33 points after an hour and a bit.
Aax is down 1, everything else is up, even problem position One Steel.
I've been in Aru and Wsa for quite a while and they've been going slowly over speed bumps but might be about to hit some open road.
Here's Aru, which is starting to follow Lynas back up and must have digested quite a lot of the $1.20 placement by now. There's good support around the 112 to 115 level and more support about 10 cents below that.

Of the nickel stocks that I follow, the best performer recently has been Mirabela which is covered by my assistant. Mincor and Minara are rallying now and Western Areas is the laggard but is showing signs of having made a swing low. In a big picture sense, they were the outperformer in recent months so it's perhaps more accurate to say that the others are playing catch up. I think the consolidation is over and I expect them to get a move on from here.

2.15 The market is up 38 points so the sell off that was brewing up yesterday has been averted. If anything, there's a positive looking set up on the 60 minute chart for the Xjo index.

4.11 The index faltered at recent highs but still closed up 35 points.

I'm out of Tls at 277 (vs 278) - too much on in a quiet period.

Lynas reversed from the early highs. I'm holding for another swing up. I'm not sure that they'll get past the recent high at 173 but in the context of the 60 minute pattern I'm watching, there's a good chance of beating today's high.

 

Patchy but interesting. Mon Dec 20

The lead in for today's trading was almost non-existent although oil and base metals were firm. All of a sudden Christmas is upon us and the city is very quiet. I'd decided to do very little over the next two or three weeks and I started off well, getting out of three underperforming positions but then I've added two new ones.
Mostly the market is as dull as you'd expect but there are one or two stocks moving around which is why I've put on a couple of trades.
I stopped out of Qan at 260 as it broke below the last swing low at 261. I bought back a short in Ipl at 387, the sell off can't get any traction and it's rolling back up.

The best trade was to buy back the short in Paladin at 501 because they're now 514. As with Ipl, the sell off wasn't gathering any momentum and in hindsight, this would have been a good cut and reverse with a small buy signal following the break of 505.

Lost about 9c a share in Qan while I got out of the short positions in Ipl and Pdn for a fraction below breakeven.
I had to grit my teeth to buy Lynas again but Thursday and Friday's action showed the heavy selling pressure was gone (for now) and Friday's trade looked like a higher low. Long at 152.5 which is where it is now. It has been up to 155 and back to 151 in between.
My caution over Ausenco didn't work out and although I can make the case that the recent rally is just a 5th wave completion after a 4th wave consolidation in late November to early December, my take on the chart is that it's moving into a bigger pattern so that the recent consolidation was just base forming and this is early days in a decent acceleration. To recap, Aax is now out of the Asx 200 and maybe index funds are going to gradually sell it for the next week or so but there's probably going to be plenty of buying interest judging by the performance of Boart Longyear. It's not strictly comparable but shares the similarity of being a service provider to the mining industry. Aax supplies skilled manpower and it's likely that they are about to enter an upgrade cycle.
I don't generally chase these sort of breakouts but I'm prepared to have a wide stop. Long at 328 with stop way down at 275. Here's the daily.

Here's the weekly. The break above 300 was quite significant on this scale.

1.54 Easing down into holiday mode with most holdings - just longs now - doing alright. Exception is One Steel which broke support at 260. Unlike Qan where I stopped out, I'm holding on to this one. Stubbornness maybe. I don't really trust the action and the value seems too compelling. However, the flipside is that it doesn't have any momentum to run up either so I'm just hoping to get out on a retracement.

3.01 The index has rolled over and is down 18 after an early rise of 15. It's at the lowest level for over a week. Short term targets might be around 4700 or another 40 points or so.

4.08 Shanghai is the worst of generally weak Asian markets so perhaps that softness is helping to keep us under pressure.

4.11 Lynas had a strong afternoon and has finished on the highs at 160.5. I was having some buyer's regret in Aax because I don't often chase breakouts, but it stayed near the elevated levels at which I bought and closed up 18 at 326.

The index did the opposite and finished down 26 at 4737.

Going, going, gold. Fri Dec 17

Maybe it's just a correction in a long term trend, but the gold chart doesn't look great. A minor new high and now a sell signal.

Partly because I don't fancy the gold chart, I've stopped out of Rsg at 127. It's a little early because it has only matched (not broken) Monday's low. This was a play on a second leg up with a tight stop and I'm happy to have limited the cost to a few cents.

10.32 Index is down 5 points, ignoring a good lead but we did outperform yesterday.

I'm resolved to try and trim my position numbers because the trading is getting increasingly flighty. Yesterday's total of 10 is too many generally so the sale of Rsg helps. My heart isn't really in my short position in Lynas so unless it's weak today, I might chop that too.

11.26 One Steel is stretching my patience. Down 5 at 262 and close to support. More choppy action.

12.08 Given the state of the market, I don't want to be stopping out too easily and even Rsg has recovered to 128.5. I held Wsa through the first tight stop at around 595 preferring to focus on the recent lows between 570 and 580. The stock has held, a big line was crossed up, and it's now bouncing. Looks a reasonable buy now and I've added a few more at 591.

2.08 Watching the cricket and it's as if someone put a curse on the team. Missing simple chances and confidence shot to bits. Aussie cricket is ferociously loyal to its captains but in Ponting's case, it would be more accurate to say that the selectors have been suicidally loyal. Quite obviously lost the team and lost his nerve.

Not a lot happening. Out of the short in Lyc at 149.5. After I realised I wasn't committed to the trade, it seemed silly to stay in.

Ozl, Pdn, Tls and Wsa performing well. Ost recovering from its worst, I bought more stock at 262. Qan still a bit iffy.

2.32 At last the tide is turning in the cricket after 8 days of very uncomfortable viewing for local fans.

Doesn't seem to be having a knock on effect on the market though. Down 10 in quiet trading.

3.31 Just drifting lower, off by 14. My pozzies aren't moving much and after there was finally a great session for Australia, I'm keen to wind up for the week and watch the rest of the day's play. 

4.15 The Xjo index closed on its lows which was at 4763, a loss of 21 points. A bit of a random walk period for the market except if you'd acted on the takeover rumours in Awc, which has had a parabolic rise.

Bought back a couple of Pdn, sold a couple of Ozl.

The Grinch. Thu Dec 16

I'm in a grumpy mood this morning after a stream of minor irritations. The market hasn't done much, down 7 after an hour following a slightly weak overnight lead.

The December Spi contract expired at the opening with the usual random moves and it seemed like most of them went against me. It's all settled back now but Qantas is a concern. It's back down at 266 after it looked like it had cleared the congestion and was ready to rally.

Qantas sums up what's been happening more and more as we approach Christmas and volume gets thin. Lots of breakouts are failing and the ones that run seem to fall short of potential.
My other concern this morning is Lynas. After having finally bit the bullet and then gone short, it's now showing signs of resilience, holding up well at 149. I'm wondering whether it could have made a minor new low with no follow through, which is often a good reversal signal. My stop is close by but it's one reason why I don't often cut and reverse - it can be pretty frustrating if you get whipsawed.
On the theme of chasing my tail, I've bought back into Aru. I've got a tight stop at 114 and the second tranche of the issue is trading now so most of the short term overhang should be gone. Long at 120.

11.36 Bought a few Ozl at 168.5 as they've pulled back as hoped. Stop is in the low 160s and it's more than possible that they're making a lower high. However, the trade stacks up because if they continue to rally it should be a strong move to new highs. 

1.56 Just got back to the office and the market has steadily risen from the early lows so that it's now up 12 points.

Ausenco has run hard today. I've been bullish about this but concerned about the rebalancing of the index which sees the stock drop out of the top 200 after the close of business on Friday. It's a nice break though and if there is some index related selling tomorrow and early next week there might be another chance to buy.

2.26 As if to confirm how shifty the market is now, One Steel has retraced most of yesterday's gains. I'm not taking these moves too seriously for the moment. It feels like one of those situations where if you don't like the chart today, then look at it tomorrow because it'll probably look quite different.

3.35 I've got the reverse of the Midas touch today (the Ponting edge?), most positions are moving the wrong way. Lynas is back at 148, at least.

Just bought some more Ozl at 166.

4.10 Time to go home and watch the struggle at the WACA. 9 out of 10 positions have moved against me today with most of them long and the market up 16 points. There's nothing I'm too fussed about though, I think it's just one of those things.

Catching up. Wed Dec 15

Just caught up with an old trading buddy for breakfast this morning. We were talking about how strong Bsl had been and it got me thinking that Ost probably wasn't going to retrace any further and might be ready for another leg up. The opening match was strong so it seemed like there was some buying and I got long at 266. For once, with this stock, I didn't run into a wall of selling and it has kept going and popped up to 272 to confirm a buy signal. It's a tick lower now. Stop is just below 260 and 290 might be a reasonable short term target.

I'm not one for networking but it obviously has some benefits.

Paladin has been firm early but I still like the short so I sold a few more at 500.

The broader US indices were fractionally higher while the narrower Dow was up 50 points. Bonds were weak again and commodities flat. The Aussie market is up 11 points after 45 minutes and it adds weight to the idea that our default state now is to grind up.

11.31 We're drifting back into pre-Christmas torpor with the gain reduced to 8 points. The Japanese and Korean indices are similar.

Just got out of Fmg at 678 as it loses some momentum.

Qantas is pushing on - thanks Oprah. Still long there at 269 and 270.

1.06 The HSI is down about half a percent early and the Asx 200 has drifted to a loss of 2 points.

I'm uneasy about Lynas. It has had a chance to recover after making a minor double bottom at 145.5 last Friday but the three days since then hasn't delivered much of a rally. Morgan Stanley keep putting in the required notices announcing changes in their substantial holding which they would be required to do up to the point where the holding would go below 5%. The last one registered a reduction in their stake in the company from 9.47% to 8.39% which equated to a reduction from 157m shares to 139m shares held. This selling took place between Nov 29 and Dec 6 and is a sizeable headwind for the stock to face especially if the selling is ongoing.

2.34 I'd taken Telstra off my list but watched the big rally in November as the bill was passed to allow structural separation of Telstra. There's been a retracement but today might have signalled that it's finished. I've just bought some at 278 with a stop at around 270.

3.04 I've cut my Lynas at 147. It's above my stop but I think it looks quite weak. Of course, it could hold again here and turn around with a break through 154 but it doesn't seem too hard to buy stock. It had become a stale position and I'm glad to be out in order to get a fresh perspective. The other salient point was that I've got a couple of new longs in Ost and Tls which look more straightforward and since my book was getting too large, the weakest position had to go. I've also sold the small amount of Arafura that I had on.

Here's the updated Lyc chart.

3.48 Lynas has ticked below last week's support to trade as low as 145. It's holding for the moment but I think the break could be significant since there had already been some overlap of support. Also, there's a pretty close stop at about 154 so I've put on a short position at 145.5. I don't often cut and reverse and in this case, it's really just a sign that I held on for too long.

4.12 It was a nutty day summed up by an operator error causing Bhp to plunge nearly a dollar on 4pm only for it to match out pretty much where it was trading previously.

The market closed up 1 point but that didn't tell the story from my point of view as good early profit gains evaporated. I'm happy to be out of my long in Lynas and to have reversed into a small short although I wasn't so pleased to see a late rally to 147.5.

I'm comfortable with most of the rest and bought back the extra shorts in Pdn at 494. Western Areas is the problem now as I'm flirting with stopping out. It's not any more illiquid than usual but somehow the lack of volume is making the weakness seem hard to gauge. Might be worth narrowing time frames as we're well into holiday trading now.

The December spi contract expires at the open tomorrow so there may be a couple of opportunities to buy or sell if there's an imbalance somewhere.

Same old scene. Tue Dec 14

The first hour has seen the Xjo lift 5 points to 4762. The range has been narrow with the overnight lead having seen US indices close little changed after early strength. Commodities were stronger, USD weaker as the lack of a Chinese rate rise encouraged the risk trade.
My positions are little changed. I'm long Aru, Fmg, Lyc, Qan and Wsa and short Ipl. Best has been Fmg, up 9 at 675 where I've sold a couple. I also sold out of Iau early as it opened above 200 on a news release and sold off quickly. Out of some at 203 and the rest at 198. It was a quick punt and I wasn't sure why the stock was retreating so got out.
I've added a new short position in Pdn. It's in a pretty good uptrend but I thought it might have made a short term top with the last move from a mid November low of 435 pushing up to 517 on slowing momentum. This last wave looks to have subdivided into 5 as well, indicating that it might have completed. I'm short at 496 with a stop at about 510. I suppose it could grind down to the start of the last surge at 435 but I'm just looking for 20 or 30 cents.

1.44 The market is up 9 but I'm only marginally in front as my resources longs are not doing much. In fact, the best performer is the new short in Paladin, which is at 488.

Copper stocks are the best percentage gainers in my watchlist. I was looking for more of a pullback before buying Ozl so I've missed that boat although my assistant has got some Pna.

In the past, I would have been buying Ozl today but my approach now is to look for a bargain and let it go if I have to chase it. I guess if it tracked back over the next day or so I might be able to look at buying in the high 160s with a stop around 160. Here's the chart.

3.16 Well, Ozl keeps pushing on but I do have another that fits my criteria. I've bought a few Resolute at 131.5 and although I'm no longer so keen on gold stocks, it looks like a decent probability that there'll be another leg up. I'd guess that it would be likely to drop short of the recent highs so my target is the mid 140s.

Stop around 125.

4.12 The market closed up 10 points. It was fairly sleepy, end of year trading and there didn't seem to be a lot happening in Asia either.

Stopped clock. Mon Dec 13

Developments in China were interesting with most of the inflation in food prices and the government raising reserve requirements for banks but leaving rates unchanged. I guess in a command economy you have more tools than the blunt instrument of interest rates, for better or for worse, and there's talk that pressure is being exerted (on hoarders etc) to free up food supplies.
It's 12.20 pm and the Asx 200 is up 0.4%, waiting cautiously for the Chinese markets to open.
Lynas is showing signs of turning up. I feel like a stopped clock here, well almost. The clock will be right twice a day and I've had to wait a week or so - a long time in my game.
To recap, I misread the last swing and decided to stay in thinking that support around the mid to high 140s would hold. There's been minor overlap but so far it has and now there are tentative signs of a bounce with the stock up at 150. I bought more stock in the high 140s so this is my biggest long position at the moment.

12.31 Ipl is recovering from Friday's sell off and I've reshorted some of the stock I bought back. Price was 380 and I'll look to sell a few more if it goes higher. Stop is now at 395.

I was underwhelmed with my long position in Fortescue and execution at 661 was not the best either. But the general gist was right in that the stock had pulled back grudgingly over late November. Fmg has just pushed through a little resistance level in the low 660s that had held for a few days. It looks more promising now and I'm thinking off adding to the position if the Chinese markets hold up.

12.55 Shanghai is up more than 1% and the pre-market in Hong Kong is strong. Added a few more Fmg at 667.

2.15 I've been trying to resist the temptation for an hour or two but have succumbed and bought a small amount of Intrepid at 193. It has made a 5 wave pattern on the 60 minute chart and reversed. It's probably indicative that I should be just looking for a retracement to 210-215 rather than a new high.
I'll include the daily chart though because you can still get the sense of a potentially complete first swing down from the recent high. You can also see that there's clear overlap and the stock has lost momentum so it's got to be a quick trade. Intrepid has had a massive run which means that the potential for a sizeable pullback is also large so my stop needs to be pretty tight just below today's low of 185.

3.01 Western Areas has been underperforming today and is down 8 at 611 where I've just bought a couple more. I like the chart and expect 600 to provide good support. It's proving to be a slower move than I anticipated but I've traded in and out of the stock for a few bucks my way. I like the fact that there was a long, shallow, 3 wave correction through October and November.

Otherwise, I'm out of the last of the Karoon at 774 and have added more Qantas at 269.

3.47 The Asx 200 hasn't been able to sustain the early gains and we've drifted off to be up 13. The Hang Seng has cut its gains too although mainland Chinese markets are strong.

I've bought a couple more Wsa to average 608 today. They've been down to 603 but on very light volume. 606 now.

Not a lot of change, added a couple more Fmg at 664 while Lynas is holding up and a small long position in Arafura is performing well.

4.11 The index closed up 11 points. Not a bad day for me, Aru and Lyc look as if they could kick on and Fmg finished well at 666. Only fly in the ointment was Wsa and even they recovered from their lows to 610.

I think it's a market that grinds up now, Democrats overturning the US tax cuts would be the biggest danger.

Form an orderly queue. Fri Dec 10

Yesterday afternoon I posted about a possible rush to risk assets when commodities and commodity stocks have clearly been running for some time already. The context is what matters. For example, Bhp has run pretty hard since the market turned in late August but it is still on forward PE ratios of 10.7 and 9.5 for FY11 and FY12 according to the survey on FNArena. Those are the sort of valuations you get at the top of the cycle when everyone assumes that growth is going to fall off a cliff. If you assume that growth is surprising to the upside then the valuations make a lot less sense. There's a discount in place for a long period of below par growth as the old economies work their way out of debt but it's a very large one. Maybe not a rush then but there could be a long queue.
The early action in the market is a small rise of 4 points with the banks performing well and the big miners under some pressure after slight weakness in commodities overnight. The gold stocks are still selling off despite a minor recovery in the gold price.
My positions are little changed. Chinese figures are due out today and tomorrow with inflation figures having been brought forward to Saturday in a sign that authorities there will raise rates.

11.21 The index is looking toppy now. It just touched a new high at 4750 and has quickly reversed a dozen points. I'm out of a few more Karoon at 776 and have bought back some Ipl at 375. Sold a couple of Wsa early at 629 and sitting with the rest. Here's the Xjo chart.

12.27 Incitec Pivot is the best performer for me today and where before I was hoping for a turnaround, it looks quite probable now. The key pivot point is 364 which was a swing low a few weeks back. I have been buying some of my short stock back but I'll also be looking to re-short on minor retracements so it's just tinkering with my position, trying to add a little value.

1.05 Higher than expected trade numbers in China, both for exports and imports. The Aussie market has stabilised and is back into the middle of the day's range. Perhaps it's just that the world is waiting for a weekend rate rise in China and therefore nothing is happening but I'm encouraged by the index holding up compared to the last month or so when the default position seemed to be for the market to sell off steadily.

The Hang Seng has gone nowhere in early trade while mainland markets might have had enough of selling into the rate decision, they're up mildly. 

2.37 A drop of about 0.6% in Hong Kong has taken the wind out of our sails although the Asx 200 is hanging on to a 2 point gain.

Linc has resumed its run over the last couple of trading days. I haven't been long and I'm slightly disappointed because I considered buying again after a pause of 4 days was unable to effect a substantial pullback. These trades are usually quick ones with very tight stops and often worthwhile. For example, if I'd been sharp enough to get some yesterday, I'd be out of at least half now.

4.10 It was a really quiet day as we wait for Saturday's rate rise. Some buying in the match helped the market to close up about 5 points.

Most of my stocks retreated mildly. Karoon was unchanged at 769 and I sold out most of my stock around 776. Ipl fell to 376 so the one short position paid off. Lynas is still under pressure although it bounced off Wednesday's support of 145.5. Since it's only at 147 that's not necessarily very significant.

More on Monday. Have a good weekend.

Sideshow. Thu Dec 9

All the action is in bond markets as the bubble bursts although there hasn't been an instant surge of money into sharemarkets. It is, at least, a recognition that prospects for growth are heightened. That's underscored by another $20 drop in the gold price, while base metals have firmed again.
The Australian market is up 13 points at the end of the first hour of trading and I feel that there's a disconnect between what's happening with bond and commodity prices and the action in our market. It's true that the fear of a Chinese rate rise - strong expectations for Saturday - has been hindering our performance but there's a good chance that it's well and truly priced in and Chinese growth is not going to be dead in the water afterwards.
The Asx 200 is still a few hundred points below the April peak and not much above the June and August highs and yet, in that time, the world view has moved from there being a strong chance of a double dip recession to the likelihood of muted but much better than expected growth in Europe and the Americas with Asia not slowing as thought.
I've been getting out of Avo at 322. It has been a tricky ride here and while I took some profit at 342, it wasn't enough, so I'll just be getting out for about square here.
Otherwise, my short in Ipl is starting to look ok.

Karoon is back up at 750 while Western Areas hasn't done much but looks like it has had a tight, bullish congestion on the 60 minute chart so I've bought more at 620.

11.25 Qan and Tse are looking reasonably positive but I'm reluctant to buy them because I think there could be some fast moves in the miners and I don't want to allocate my cash to slow rallies. I'm also taken with Aax but it's being dumped from the Asx 200 shortly due to its problems last year, so while the tide might have turned on an operational level, the stock is being punished for past misdemeanors.

I've bought more Karoon in the high 740s. The stop for these is around 695 so it's quite risky but even if it's just a corrective rally then there might be a quick dollar in it.

11.47 The market has shot up since 11 am and is up 44 points. I've bought some Fortescue at 661 in my hunt for a high beta trade. Not awesome but I'll use 640 as a stop. It looks like a grudging sell off over the last few weeks and it's a decent proxy for growth for those who want to play that story.

12.02 I forgot to mention that the jobs numbers were much better than expected which is seen as positive in the context of a recently slowing economy. The finance stations are attributing the market rise to this but the market was already up 25 before the figures came through.

12.24 I've changed my mind on Qantas and paid 270 when I could have got set at 266 earlier. However, it's not too late and the advantage is that it has now cleared yesterday's high and is just short of creating a buy signal with a trade at 271. There have also been some big lines of stock going through at 269. It seems like some good buying finding a seller because 269 is up 5 on the day. My stop is around 261 with hopes of a quick move to the mid 280s. The risk/reward could be stronger but the pattern itself is impressive.

1.22 Qan is trading at 272 so the buy signal is in place. I've sold a couple of Kar at 763 as I might have bought a few too many earlier.

The only position I'm hanging on for is Lynas which has stopped the rot but hasn't turned.

The Hang Seng is up around 0.6% in early trading so there's nothing there to knock us back down.

3.16 Still holding onto most of the gains. No new positions and my existing ones are little changed over the last 2 or 3 hours.

4.12 The index rose 41 points to 4741. It was a good performance after looking pretty shaky yesterday and I'm hoping that it's a sign that sentiment is finally improving.

Overseas buyers usually provide the swing factor in the Australian market so if a couple of hedge funds decide to increase their weight in risk assets then we could see a rush to the miners.

Karoon was the best on the day while I rushed into Fortescue and could have got it cheaper once the market started consolidating the early gains. It closed at 657.