Ahead of the curve. Tue May 24

Apparently we were anticipating heavy overnight falls in commodity prices following the very mild drop in Chinese PMI yesterday. Extremely prescient, I have to say, and today the index is shrugging off European and US index drops with a "been there, done that" shrug of the shoulders. The support failed unsurprisingly since it was almost gone yesterday afternoon but the Asx 200 is off just 11 points after 44 minutes.
I've sold out most of the IAU balance at 178.5 and a few LYC at 219. OZL is arguably a cut but I'm holding on for now since there's a chance of a surprise up day. There was a 12 cent per share return of capital a few days ago, so my entry price is effectively 130.5 with the stock trading at 133.5.
It's quite difficult to trade with the index making choppy lows and the tricky part is that the pattern still looks corrective of the March/April rally.

11.52 The market is attempting to make a base but is facing the headwind of continued bank selling with 3 of the 4 majors down by over 1%. The talk is that hedge funds are initiating short positions so this could continue for a while.
12.23 Another wave down as support vanishes. Out of OZL at 131 and LYC at 216 with the last few IAU at 175.5.
1.01 On a daily basis, the index is chopping downwards in a trend channel and as per the comment above, it's probably retracing the earlier rally. On a weekly basis, it looks very much as if a lower high will be made if you compare the April 2011 high to the one made almost exactly a year earlier. So the next swing up might well fail at, say, 4800 and a couple of long term targets could be set.
A modest bear market might see a test of the bottom of the range at around 4200 while a "chickens coming home to roost" event would see the index back to the GFC lows. This would be on the basis that the retracement since the 2009 lows has failed to break the first GFC swing low down from early 2008. A 5th wave on the weekly chart could push the index down below 3100. Interesting.


3.13 I've reverted to Blogger for the time being after technical problems.
The market is bouncing finally, just down 13, was down 47. LYC has recovered to 222 so that's a lost opportunity but I bought more LNC at 383 and went long IPL at 387. IPL is one of the few stocks in the market that has potential for upgrades and is rallying after a lengthy, complete looking correction.

4.08 I bought back into LYC at 222. The rebound is impressive and if the market is due a bounce from trend lows then this will outperform. It looks like it's going to close at 226. 

Shame about cutting at 217.2 and buying back at 222 but that's an occupational hazard.

4.10 A decent recovery then, with a small late sell off leading to a 14 point lower close.