Thursday, February 10, 2011

Gunning for 5k. Thu Feb 10

US indices tried to claw their way back into the black in the last hour of their trading day but only the Dow made it over the line. Commodities and the AUD slid back but gold defied the USD strength to be steady.
The Xjo is doing better than I expected with a 5 point gain at 10.39 am. It looks like we might manage to get to 5000 which is where the 2010 peak was reached in April. Not today though, the Asx 200 is at 4910.














The Telstra result was disappointing but the stock is unchanged as attention is focussed on a possible NBN deal. The Alumina result was hard to gauge. The stock fell early but stopped at 242. I bought a few for an average of 243. It's looking ok for the moment but I haven't gone hard because I doubt if reaction has solidified yet. My stop is around 234. It's what I was looking for last night but I'm unconvinced by the market action.















I got out of the last few Bsl at 219 and 218 soon after the market open. There had been a small 5 wave rally which failed to hold the new high yesterday.















I'm still keeping things very tight so sold some Lnc at 278 and Lyc at 190.5 as they rose slightly early.

2.01 Back from an appointment to find the market roughly unchanged although my individual holdings have moved around a tad. Awc is holding at 246, Lnc is up further at 287 and I sold more at 284. Gold stock, St. Barbara, has fallen 4 to 192.5 but I've topped up there - having sold some on the rise. It's still a cautiously sized trade because there has been one push off the low and it would not be unusual to see a stock drop back close to that level before having another leg up. However, the gold chart looks strong and I think that will provide support.
Here's Sbm and then spot gold.














2.49 There are a few commentators looking at the US market being near a top. The fundamental guys are looking at QE2 coming to an end and the rate rise cycle heating up in China while on the technical side the indices look stretched. It could be close with the DJIA chart getting the look of a blow off top about it.
In my watchlist, there are 3 stocks that have started to get a volatile topping out look, where weakness is suddenly reversed as the stock charges to a new high only for that to become unsustainable. The stocks are Bld, Ipl and Ozl and it's too early to say that the rallies are unsustainable but I'm getting interested in shorting them.
I've been waiting to short Ipl on a rally towards the high but, today, the stock went straight past 462 to 466. By the look of the shorter term charts, this surge may not be over but I'm tempted to sell a few today and see what tomorrow brings. The stock is on a September 30th financial year end, so it doesn't report until May.

3.41 I almost resisted the temptation to put on my brave/foolish short position in Ipl but have sold a small amount at 465. I've closed out the balance of the short in Aristocrat at 291.

4.11 For what it's worth, the index closed near the highs of a tight range day, up 10 at 4914. Once again, it was the top 20 outperforming. 

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