False start. Thu July 2

It looks like today is the real start of the trading year after yesterday's action seemed to be about unwinding an artificial final day of the financial year. The lead into today's trade was solid but after two confusing days the market has been very cautious this morning. It's almost noon and there's now some tentative signs of strength with the Xjo up 29 points. It's still below early highs but I keep seeing bullish set ups so I can imagine us gaining momentum as the day goes on.

I've nibbled at new long positions in Qbe and Wdc. Qbe is pushing the top of a trading range as it recovers from May's drop. I'm long at 1992 with the stock having now made a new high of 1998 although it has slipped a couple of cents since then.

Westfield hasn't quite made a buy signal but I noticed some steady buying so I bought early at 1114 and 1117. As I write this, it has just traded at 1120 so I've got my first indicator with confirmation of a break out quite a distance away at 1169. The reason I like this chart is that the retracement through most of June looked like a 4th wave down after a typical 3rd wave surge and it held above the 1st wave peak in mid May. The rally over the last week or so implies quite a bit of strength which could see the stock push easily past the June peak of 1235.

2.18 So far it has been a disappointing day for me as the market is almost back to square on the day and most of my positions have drifted down. I'm out of Ipl at 228 (v 242) as it kept making marginal new lows and I've no justification for staying long. Brambles has also failed to hold near term support. I had put on a small long position at 592. Fortunately I sold out half at 596 but I've just sold out the rest at 578. I still have a hedged stock plus July 625 put position.

The Brambles chart sums up the state of the market over the last week or so with jumpy reversals and false signals. Bhp is another one.

I went long on the 3rd bar back, held most of the position overnight and once more I'm undecided. I can get out for square and maybe I will, but the 60 minute chart looks quite encouraging so perhaps I'll just reduce the position yet again and maintain a small interest. The Rio chart is similar but stronger, although the open was the high.

3.49 The market has firmed up in the last hour and is now 17 points higher.

4.00 Sold some Ncm at 3123 (v 3065).

4.12 The market has closed with a gain of 3 points, falling 11 points in the match as the uncertainty that has characterised today's trading continued to the end. I sold out about a third of the Wdc position at 1124.5 ( v 1115.5) and a portion of Qbe at 2004 (v 1992).

Happy New Year. Wed July 1

The start of the new financial year in Australia has brought renewed caution as the UK economy contracted at the worst pace since 1958 and US consumer confidence slipped back again after recently showing signs of life. The result was a fairly measured fall of around 1% in both of those markets. We've outdone that, the top 200 index falling as much as 95 points earlier on. At 12.20 we're down 78 points or 2% and I'm regretting taking buy signals on June 30 which is a bit of an unreliable day.
I could have cut all of my new longs on a trailing stop but I've decided to wait a bit longer till the dust settles. A lot of market participants have probably spent the morning doing some of the things I've been doing such as updating spreadsheets for the new year, reconciling accounts and looking at budgets; anything but trading.

1.44 I'm still just watching the day's trading. The daily chart for the Xjo gives a clue.

The rally over the last week took the index above the pivot point on the way down. It means that we're unlikely to accelerate down. Given that the fall had stopped dead any momentum it also seems unlikely that we'll make any overall gains, so my assumption is that at some point the market will resume the retracement rally but probably not make a new high. If it does go above the the old high by more than a percent or so then I'd guess it would be a quick surge that I'd have to jump on and off quickly.

3.57 The market has been clawing its way off the days lows but hasn't got far. It's still down 70 points. Other markets in the region are flat to up and I'm loath to dump everything on a thin day. However, I plan to sell a part of my positions, at least, since most of them, at the day's lows, could have stopped me out if I'd chosen to take the tightest stop.

4.15 Took something off the table with small sales in Bhp at 3390 (v 3435), Ipl at 234 (v 242), Ncm at 3028 (v 3065), Rio at 5160 (v 5225) and the sale of the last half of the Tel position at 217 (v 218). The market closed down 81 points.

With a bang. Tue June 30

Financial year 2008/2009 is going out with a bang and not a whimper. Following a solid overnight lead the Asx 200 has ralled 1.5% at 11.15 am.

There are quite a few buy signals today and overall it looks like the bounce back could get close to recent highs.

I've gone long Bhp, Ipl and Rio. All of them have much the same sort of chart where there was a big drop over most of June followed now by the first signs of higher lows. The fall in Bhp was more than 10% while in Ipl and Rio it was greater than 20%. Given that the trend of higher highs and higher lows is still intact on the weekly charts I think that even a retracement rally could have a fair bit of oomph to it.

Here's the daily chart for Bhp. I bought on the open at 3435 although the break of yesterday's high of 3460 came a bit later. The next hurdle is not far away at 3475 which would break Friday's high and confirm the signal. I'm quite pleased to get a chance to trade Bhp as it often gaps over a signal giving me a difficult choice as to whether to chase a position or not.

The Ipl chart shows a double bottom yesterday with a trade at 231. I bought on the break of yesterday's high of 239 and paid 242. Confirmation of the break is a bit further away at 253.

Rio is the best chart of the three because it has already confirmed the signal when it traded above Friday's high of 5210. I paid 5225 which is close to the high for the day but so far the stock hasn't retraced much. What I like about Bhp and Ipl is that this is the third attempt to rally in the last 9 days showing that the selling pressure has eased dramatically. In the case of Rio the fall was extreme for a top 20 stock, probably accentuated by the pressure from the rights issue, so that although this is only the second attempt at a rally there's a bit of room to move. A 50% retracement of the fall would give a target just under 5500.

12.04 Brambles is setting up bullishly. It's got a long slow 3 wave correction where the 3rd wave failed to go lower than the first, generally a bullish sign. I slightly overhedged my July 625 puts at 571 and now I'm a little long as the quantity needed to hedge has reduced. I've added a few more shares at 591, confirmation of the break is at 593.

With all this buying I've got too much exposure and more positions than I want to deal with. Cfx has done well this morning, it's up 5 at 168.5, but because it's a relatively small position and not likely to be terribly explosive I'm getting out of it. Sold some at 167.5 (v 167) with a few to go. Of my other longs, Ozl is up 2 at 92 and is charting bullishly so I'm happy to continue running my August 90 calls. Tel, however, has drifted lower as it looks like one or more principal traders at the big brokers have been obliged to take on stock from a keen seller. I'm making that assumption on the basis of 4 crossings of 150 to 250 thousand stock at what looks like gradually declining levels. I had planned to sell my stock at 220 but wasn't aggressive enough to dump it early on.

2.22 The market has drifted sideways in a very tight range since soon after the open. I suppose everyone is waiting for the last half hour or so as things hot up on the last day of the financial year. It's like the middle overs of a one day cricket match with nobody taking any risks until the final slog.

2.43 Out of Cfx at 169 (v 167) while Tel is starting to firm up. Decent lines of stock are still changing hands but at 220 recently so the pressure is easing. I'm still trying to sell some at 220.

3.21 Things are starting to hot up with the Spi moving towards the top of the range. The same basic bullish set up is being repeated in a lot of the top 50 stocks eg Cwn, Map, Nws, Sgp, Sun, Wow. I've chosen the positions a little randomly, perhaps with the idea that the resource sector will move more explosively. I've also added another long position, which is stretching things, in Newcrest. I went early on this the other day and was chopped out but the signal is better now and confirmed the break trading above 3070 soon after I paid 3065. It is sitting around 3068 now.

4.12 Interestingly, the wild action of previous quarter and year ends hasn't happened. It's possible that the warnings about ramping etc from the Stock Exchange have been heeded. I sold out a few Bhp at 3472 (v 3435), Bxb at 596 (v 592 av.) and half of my Tel for square at 218 in a modestly bullish match out.

Sitting on our hands. Mon June 29

This is the penultimate day of the financial year in Australia and the market is barely changed, like US markets overnight, although there seems to be some underlying strength as we shrugged off early weakness. It's possible that there'll be a lot of choppy action today and tomorrow as tax driven activity and fund manager window dressing competes with the normal flow of business.

I was stopped out of Ncm early at 2987 (v 3050) as it went through yesterday's low and also the previous swing low on the 60 minute chart. I've also put on a few long positions which I'm having second thoughts about so I'll probably chop them for small gains or losses fairly soon.

I'm getting bullish about Fortescue again.

It needs to trade at 387 which is above Friday's high for me to get a buy signal. This morning there was a lower low so I'd have a pivot at 386. I like the context of the signal; there was the big spike and a chart correction which I'm hoping bottomed out on the 4th bar back. If that scenario is right I can expect a new high. I got a bit excited and bought some early at 381. Fortunately, the stock is now 383 and if it keeps rising I'd try to finish my buying at 387.

2.50 I bought Telecom New Zealand earlier at 218 as it broke out of a range but had misgivings that I was chasing a breakout in a choppy market which is a dangerous game as they often fail. It slipped right back to 214 but has resumed the run and I'm hopeful of holding it overnight now.

3.35 Paid for my haste in Fmg as I sold out at 373 as it failed to break out and started selling off. I'm trying to do nothing and just wait for the new financial year.

4.10 The market has matched out towards the bottom of the day's range with a loss of 17 points. Most Asian market are weaker and US overnight futures are down about 0.6%. I'm still long some Cfx and Ozl which are little changed on the day along with Tel which has closed on its high at 220. I'm not reading too much into a choppy day with light volume and presumably many market participants are waiting for Wednesday and the new financial year.

Swings and roundabouts. Fri June 26

I'm pretty confident that the market has made a top but we're having a decent retracement rally mimicking strength in US indices overnight. Here's a daily chart for S&P 500 index.......and one for the Xjo.Gold has put together a few consecutive up days after bouncing off support. I've bought both Lihir Gold and Newcrest using 60 minute charts for guidance.

I hesitated with Lgl and paid 296. The buying opportunity was at 293 but the stock opened at 294. I waited to see if there was any real strength and then bought. Ncm was a cleaner signal so I bought soon after the open at 3051.

These two gold stocks have similar daily charts to Awc where it's a simple reversal after steep falls. I normally prefer to have a pivot as in the 60 minute Ncm chart above but I'm willing to take these trades as the reversal is not the worst signal when allied with a good one in a 60 minute time frame.

Awc is up at 148 and I sold a third out on the open at that price (v 137.5). Cfx has fared less well toying with a trailing stop at 162.5 but just holding on; it's finding support now. Ozl is also weak but I think it might be forming a higher low so I could get the opportunity in a day or so to buy stock and leverage my existing position.Today's action looks poor but there isn't much volume, the sector is looking good, I don't think there's any stock specific news out and base metals have been recovering nicely over the last couple of days. The downside is that there's some medium term scepticism about the copper price and the company is now the operator of just one mine that's still in ramp up mode so increased risk associated with the stock has lowered appetite for it. In my world I'm just looking for the stock to find support and maybe pop up to 100 so these concerns are not completely relevant.

12.27 Out of Lgl for square at 296 as it's stalling and it's a short term momentum trade.

2.06 It's another day when I can't see a lot to do. I've sold another third of the Awc position at 150 with the rest sitting on the offer at 152. This is a judgement call but I'm not comfortable with being very long overnight after a couple of good retracement days, and this is more a momentum trade than anything.

3.39 The comment above shamed me into having a good look at the top 50 because in fact it has been a day of dramatic moves with some great bounces in Cba, Mqg, Nab and Qbe for example. All stocks I was short earlier in the week. Nevertheless, these moves haven't necessarily got a structure I like to work with. I did put on one trade in this style in Awc and that has been a big mover, up 9.4% but I was also tempted to go long Bhp and Rio and I'm glad I didn't as they're down today. Awc, at least, had a good set up on the 60 minute.

4.07 Approaching the match out I'm selling out the last of the Awc for 150 (? v 137.5). Cfx has been a disappointment, it's still above support but I'm reducing the position size with a sale at 164 (v 167). Ncm has eased off all day and I'm doing the same there at something like 3002 (v 3051). I don't want many positions right now - waiting/hoping for the resumption of the downtrend.