Ebbing away. Fri Jan 14

Some of yesterday's gains are ebbing away as the overnight session was a little weak with profit taking in resource stocks and smaller losses in the underlying commodities. Gold fell again and there is still a head and shoulders look about the USD gold chart.

I don't have a clear idea for the rest of the day. If it wasn't a Friday, I would expect the market to shake off the early weakness (about 7 points at 11 am) and work its way up because the short term signals are pretty bullish. Overall, I'm still leaning that way despite the tendency to drift lower at the end of the week.
The CAC 40 index has been remarkably similar to the Asx 200 and it has reversed from short term weakness and broken above recent highs. I expect something like this for the local market.

The major US rare earths stock, Molycorp, sold off about 6.5% last night but Lynas is almost unchanged. Aru has fallen 4% to 151.5 where I've added to my fairly small position.
Wsa continues to rally, I sold a small amount at 675.
Otherwise, Ost is also strong and has helped to stabilise Bsl.

The one new trade for me today is a part purchase of some Awe at 173.5. I've tried to pick the completion of the retracement a couple of times over the last few weeks but have had very tight stops so the damage has been minimal. The purchase price is 173.5 and my stop is at 171.

12.31 The intraday range has been very narrow; less than 6 points. Down 6 now from down 11 earlier.
Unsurprisingly, most of the moves look pretty random. The gold sector is the one area where there's consistent weakness.

2.19 A couple of days ago, I paid 220 for Bsl. The stock hit 225 that day but twice drifted back to 217 subsequently. It has held above minor support at 216 and is strengthening over the course of the day. Trading above 225 would be a decent indicator that the stock has finished the consolidation and can move above the recent high of 238.

4.01 Qantas has chopped around since I paid 250 on Monday. I would have just stopped out except that the 258 high breached the previous swing high of 256 when it was on the way down. Also, the general market tone has clearly improved. I'm hoping that this morning marked the completion of a brief retracement.

On the FnArena database there are 7 buys and 1 hold and even that has a target of 309, while the consensus target is 331. Valuation is obviously unchallenging, despite the potential for writedowns thanks to the big chill in Northern Europe and the problems with the new aircraft.

The market did recover as the day went on and the final figure was a rise of 6 points to 4801.