Leap of faith. Tue May 17

Another fall in the US indices and weakness in oil left the overnight futures contract down about 0.4% but the market has ignored that lead and rallied a dozen points after half an hour or so. Helping matters is a UK led bounce in the big miners while base metals were again mixed with copper rising.

I've started an overdue review of my trading and one pattern that crops up quite regularly is to get on board a position before a break of the previous bar's high or low. I'm still comfortable with pre-empting a breakout because I'll do it when it allows me a tight stop, however, it pays to at least get the minor momentum in my favour.

The last leg of the fall has been costly because in a couple of cases, I got long anticipating a rebound without this supporting piece of evidence. Today is finally allowing the opportunity to do some bargain hunting on firmer footing and I've bought a couple of stocks after waiting for a push past yesterday's high. Having had a few poor days, I'm a little jittery so it has taken a leap of faith.

One of those positions is a long in LYC at 215. My stop is below Friday's low of 206 and I'm just looking for another leg up towards 240. The stock is holding an uptrend but has lost much of the momentum of recent months. I wouldn't be surprised to see it make a lower high in the next few weeks and commence a more serious pullback. However, it's reasonable to assume that the trend will persist for now.

IPL is a different kettle of fish. This is well and truly in a downtrend and I've put on a reversal trade. I like the wave count; I make it a (potentially) complete 5 waves down from the early April starting point for this swing. The big 3rd was also split into 5. The recent bullish reversals have been short but solid trades. Long at 368.

11.35 Slightly hawkish RBA minutes have cost the Asx 200 its early gains although the comments are already starting to look out of date as growth in overseas markets seems to be stalling.

1.14 Chinese markets are improving after a soft start and that could be the factor helping the Asx 200 to rally after hovering around breakeven for a couple of hours. Up 19 now at 4669.

3.36 The index has done pretty well and is now up 31. My longs are edging up after drifting off from buy levels earlier. The action itself is inconclusive with the Asx 200 printing an inside day at this point. Individual stocks look better as reversal plays are definitely on.

4.10 The opening calls for the UK market are down about 0.8% but the local market has held most of the gains despite that, finishing higher by 34 points at 4684.