Pause to reflect. Fri Aug 7

After the exuberance of yesterday there followed the chastening experience of a modest down night in the US so at midday the market here is down just under 1%. My positions have generally chopped back with the market although Iif is up a fraction.

I just sold out of Suncorp at 786 (v 762). They gave a preliminary estimate of what their final result might be like when they report in late August after having been given a "please explain" letter by the stock exchange having run up so sharply. This provoked a bout of selling which just held support at 763 and then a recovery to all square at 800. I had hopes that having squeezed some longs out it might surge again but it's starting to drift down so I've used the move below yesterday's low as a trailing stop. The chart still looks positive and I'll be looking at opportunities to buy.

2.01 I'm watching Macmahon Holdings for the chance to re-enter a bullish stock. It's looking like a textbook resumption of a sharp uptrend but I'm waiting to see where it closes. So far, the move is modest, up 1 to 48.5.

2.53 The one trade I made which was pre-empting the buy signal was in Fortescue. I've paid the price there as it's the worst performer of my group today, down 12 at 443. It's not a position I need to cut but the problem now is that I'm wasting time. Iag is also down, 7 c to 376, but since I'm confident that it's trending I'm not terribly concerned. Otherwise, Bly and Iif have recovered from early weakness to be mildly strong.

I'm also looking at Pacific Brands, an Australian clothing and homewares group. The Aussie consumer is holding up well and unemployment is still surprisingly low. This stock is similar to Mah, where it's a resumption of the uptrend after a pause. Long at 115.5.

4.10 The spi contract has rallied sharply in the last hour, perhaps traders are hedging their bets with the US employment numbers out tonight. Most of my stocks have performed steadily with Fmg the exception. Overall, the Xjo index which was down 50 points in the early afternoon has closed down 27.

Insurers in demand. Thu Aug 6

Suncorp isn't a pure insurer, it's also a fairly large regional bank based in Queensland. Nevertheless, it's supposedly attracting the interest of private equity player JC Flowers and is up 4% at 796 in a market which has rebounded 38 points (at 11.55 am) recovering most of yesterdays losses. I've sold out a couple at 801 (v 762).
As for the overnight position in Axa, I was stopped out there, selling the last of my shares at 433 (v 449).
The other bullish insurer, which was the subject of a lowball bid from Qbe a while back, is Iag. It's starting to clear away from a breakout and looks like it could gain momentum. Long at 380.

1.15 The other new trade I've put on today is to buy Iif, a property fund that was on death row earlier in the year, trading down to 6.4 c having been as high as 287 in late 2007. It's broken out of a tight trading range and pushed above June's high. Long at 33.

3.30 Back into Boart Longyear (at 34), which look ready to go hard. Not sure why actually as broker opinion is not enthusiastic but Bradken who are also involved in services to the mining industry have reported today and are up 15% on a good result.

3.55 At the market runs this afternoon - up 58 points now - more stocks are shaping up as potential buys. I've added one that isn't quite there, because it moves pretty fast when it breaks out, and that's Fortescue. Long at 453 with the recent high at 460.

4.14 That's it for the day with a close up 62 points, 1 point away from the day's high and a reversal back up on the Xjo chart. Most of my positions closed near the highs also.

Scanning. Wed Aug 5

Just after midday we're down 2 points on the top 200 index in the middle of a tight range for the day.

I got out of Awb early as it ticked through yesterday's low. Out at 133 (v 136.5). I also sold out of Sbm at 23 (v 22).

I had no positions but after searching for movers have since filled the vacuum with 2 new longs in Axa Asia Pacific and Centennial Coal.

Axa has reported this morning roughly in line with expectations. The stock rallied 17 to 449 and then ranged for the next 90 minutes between 441 and 449. When it held the gains and started to firm again I paid 449. It was just an opportunity to get on a running stock although the break of 450 was significant as that was the May high. Now trading at 455.

Cey is another one that has been running for a while. The previous 4 days saw the closing price clustered around 300. Yesterday the stock fell after a strong start and the strength has resumed this morning. Again, it's an opportunity to buy a running stock and there's a June high at 322 as a near term target. Long at 313.

1.19 Sold a few Axa on a spike up to 459. Cey going nowhere along with the market.

2.32 The market has taken a turn for the worse. Axa has reversed to be back at 446 although still up more than 3% for the day.

2.40 I've been thinking about the Cey chart. If you compare the rally now to the one in May and June (or the rally now in Axa) you can see that there's much more acceleration to the earlier move. With that in mind I've cut the Cey for a 1 cent loss at 312.

3.56 The market has continued to weaken and is now down 40 points, just under 1%. Axa has slipped further to be at 438. My feeling is that I might reduce position size but I'll stay long with a trailing stop. I've gone long in Suncorp which I've been bullish about for a little while. Although it's back from a spike high at 802 it's starting to accelerate and is the type of position I'm looking for at the moment. Long at 762.

4.10 Just sold a few more Axa at 442 (v 449) on the match. Market closed down 1% on its lows and looks bearish in the short term.

Take your pick. Tue Aug 4

Another day, another strong rise. We're following suit after overnight rises and at 12.35 pm we're up 70 points.
I'm out of Bly at 32.5 (v 27.5) and Gmg at 56 (v 52.5) and pleased with it as they both have slipped back. Also sold a few Pla at 105.5 (v 101.5) and Sbm at 24 (v 22).

Obviously most things are running in this market and I'm trying to get my head round the sort of stocks I should be buying. I want to be on the things running hardest and I guess that's the point, buy the things running hardest. Eg...

I was fiddling about with this at about 90 cents but a great time to buy would have been towards the close about two days ago once it was clear that acceleration was setting in. I did a trade like this yesterday in Gmg and that paid off pretty well. When these turn they retrace sharply and that's why it can be difficult to steel yourself to jump on board along with the normal human reluctance to pay a lot more than you had to a couple of days before.

By the way, my young assistant did buy Mre a couple of days back, along with Kzl.

He's still long some of each.

3.24 It's a reversal day and I sold out the rest of the Pla at 103 (v 101.5) and a few more Sbm at 23.5 (v 22). My assistant sold out of his Kzl and Mre earlier at 126 and 129. They're now 114 and 121 illustrating the need to be quick to exit these blow off situations.

4.10 I'm just long Awb and Sbm now and feeling cautious as a lot of the runners reversed course. For example, Bly trading down to 29 and Gmg at 49. The higher priced stocks have performed better so I wonder if these cheapies are the canary in the coalmine warning of a general reversal. Sold out a few Awb at 135 (v 136.5) and more Sbm at 23.

Nervous chop. Mon Aug 3

After the best July for years in all sorts of markets it seems that everyone is looking for a pullback but the momentum is strong and there's lots of money on the sidelines.

I want to refocus my book so I'm out of a few Bly at 30.5 (v 27.5), the last of the Mah at 46.5 (v 39.5) although I was far too hasty as they surged up to 52, Map at 243 (v 233.5), Mmx at 188.5 (v 190) and Ost at 301 (v 305).

Aio is still grinding up and is now at 163. I'm expecting to see some acceleration, like an arm wrestle when one side suddenly capitulates. I'm still in a few Bly and will try to be patient as it looks fine.

I've added two new positions. Gindalbie, an iron ore junior, which looks ready to push on after a short consolidation. I chased my entry and paid the short term peak of 91.

The other one is Goodman Group, property and funds management, who seem to be running on the back of a tie up with a Chinese investor. I've been watching it for days and almost bought on Friday. However, it was consolidating for much of the day but is firm again today and could spike. Long at 52.5.
11.57 Following the pattern of the last couple of trading days, I've quickly got cold feet with Gindalbie and sold out at 89 (v 91). The momentum has faded and I'm a bit worried that, while it should push on soon, it may be due a second leg down especially with Mgx and Mmx (also in the sector) failing to run.

12.29 Just added a couple more small long positions in AWB limited and Platinum Australia. Awb, formerly known as the Australian Wheat Board, has had a chequered history in recent years but is trading well below valuations with a catalyst for recent upgrades being the exit of Brazilian and Indian operations. Anyway, the chart is looking fine and it's nice to know there's a rationale for fundamentally oriented investors to enter the stock.

I've only bought part of my position at 135.5 as I want to see the stock show that it's ready to race.

I've also tried again in Pla as the stock has made another higher low and shows signs of breaking out. Bought at 100.5 as it broke the previous 100 high but it has edged back a cent and again I want to see this trade higher into the close before I buy a full position.

2.17 The remarkable strength continues and the Xjo index is up 24 points having been up 34 earlier. Aio, unfortunately, hasn't shared the strength and so I've decided to cut for square at 160. The new positions in Awb, Gmg and Pla are going the right way. I added a few more Awb at 137 and Pla at 102 with the idea of buying more towards the close if they maintain the strength. I sold out a small amount of Gmg at 53.5 (v 52.5) to cover costs as this one is already extended.

3.28 Gmg is still firm, sold a couple more at 55.5.

Just bought some St Barbara Mines for 22. These have been weak for ages but have just made a new high on the daily and weekly charts. The stock has been scraping along the bottom for ages and with the management making positive noises about having turned around the stock there doesn't seem to be much downside.

4.10 Pla has finished up near the highs and through the breakout level of 100 so I bought some more at 103 on the match out. Average buy price for the day is 101.5. Awb also finished strongly but is below the 140 resistance. I might get a chance to add more if it trades through that level tomorrow. The market eased into the close, finishing up 20 points.