Thursday, May 19, 2011

Sweet spot. Thu May 19

US and European indices up, commodities and commodity stocks up, the Aussie dollar flat and the Asx 200 already showing signs of life after a steep fall have combined to put the market into a sweet spot. Up 42 points after 45 minutes with most of my longs performing well and the lone short in AWC up just 3 cents.

I'm out of most of the balance of IPL at 392 as they approach the last swing high. I have a new long in junior gold miner Intrepid at 184. There was a grinding pullback to make a higher low and the medium term context is that this is the third higher low since January. So the grip has loosened and the stock has floated back up to 187. It's quite illiquid so I'm long a half portion.

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There's another new long in PDN at 324. This has broken the high of the last 3 days as the stock seems to be turning following a 5 wave swing down – which could be the last leg of a larger pattern.

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12.42 It's a strong day and the market has barely taken a backwards step. Up 66 at 4760.

The picture has changed in AWC, not surprising really as the commodity lift which had been restricted to copper became broader overnight. I shorted 15 thousand which is about half what I'd normally do, thinking that I could add more if the opening was weak. I'm now trying to buy back at 234 and have an extra 15k on the bid there to go long. Stop would be at about 226.

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1.34 I got the AWC rather too easily at 234 and it's 233 now so I'm in that position where you start to think that you've cut and reversed when you were right all along. Oh well, the rest of the positions are pretty good and it's an occupational hazard, especially when you look to pre-empt breakouts. I sold a few LYC at 225 and OZl at 151 and the last of the IPL at 392.

4.13 A good finish kept the Asx 200 to a close near the days high, up 63 at 4756. IAU, LYC and OZL finished well, while AWC and PDN ended a touch below my entry price.

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