Rotation. Thu Sep 10

The local market is up 25 points but it's one of those days where I don't really have any winners, and looking around the market there is a bit of switching going on. For example, Gold's charge at US$1000 has faltered and all the gold stocks are easing back while property stocks are firmer.

I've sold out half of my Sbm at 31 (v 24), half of the Bly at 28 (v 28.5) as they announced that the underwriters are left with a lot of stock from the retail issue and the balance of Mah at 64 (v 61.5) as they make a 60 minute sell signal and have also breached a trailing stop on the daily chart.

I've added to Tpi at 158.5 as it inches up and looks poised to run but is still short of the recent high; breaching that could lead to some rapid acceleration. I've bought back into Asciano at 168.5 as they broke last month's high of 168. I was wondering why I've paid 5% more for this - I was in and out for breakeven last week at 160. The answer I gave myself is that at that point it looked like it could be making a lower high with a couple of days closing lower than the open and no great momentum. The last couple of days have changed that picture and there's a good chance this can kick on, although it has drifted back to 166 along with a general drift back in the overall market.

11.57 Sbm has breached a simple trailing stop on the daily which I generally prefer to use. Yesterday's low was 31 and it's trading at 30 offer. I'll try to sell my balance out at 30.

12.40 I was almost to the front of the queue in St Barbara to sell my balance when the stock was knocked down. It's 29, 29.5 now but I'm staying at 30 for the time being. A similar gamble in Bly went my way as I sold the balance out at 27.5 (v 28.5). There's too much stock around and yesterday's bounce was a false dawn.

2.36 The market has firmed slightly to be up 32. A friend just sent me a chart of Gbg, he's a bit more long term than me, and he's pointing out the significance of this level - 95. Here's a weekly. I'm already in this but I might buy more if it can get through 95. It just got state government environmental approval for its Karara iron ore project. It also needs approval from the federal government and given that the project has support from AnSteel of China it would probably be attractive to the federal government to approve the project speedily as compensation for the Rio knockback.

3.08 Gbg is 96.5 now and I bought another tranche at just under 96.

3.59 Just sold out the balance of Sbm at 30 (v 24).

4.13 A pretty strong day with the Xjo index rising 1.1%. I'm happier with my book now. Long Aio, Ehl, Gbg, Ifn and Tpi. Gbg finished well, closing at 99 and trading as high as 101.

All the 9s. Wed Sep 9

I was watching CNBC for a few minutes last night and one of the regulars from the trading floor, Art something, was indulging in some numerology about the 9th of the 9th, 2009. It was something along the lines of trying to pick the top of the rally. Anyway, the rally continues and after some caution early, a slight hangover maybe, the Australian market is up 30 points as we approach the end of the first hour of trading.

I've also indulged in a bit of top picking in Molopo - based on a complete looking 60 minute chart - and sold out at 132 and 133 (v 118.5). The chart looks fine on the daily, perhaps a bit stretched, but I felt the need to sell something and at least in the short term it's been a good move as the stock is back down to 130.5.

I've bought some Bly which was sucked down to 27, the level of the rights issue, but is pushing away now as the retail issue period is over. Similar stocks have been rallying hard over the same period so there could be some catch up. Long at 28.5.

11.41 Retail sales figures and housing finance fell mildly when small rises were expected indicating that rate rises may come later rather than sooner. The stimulus packages are winding back and they may not have primed the pump so much as provided a one off jump.

I'm having another go at Tpi as it has pushed past yesterday's high and it's possible that the pullback is complete. It's such a high momentum chart that it's worth another try.

I'm long some at 155.5 but that average will go up if I buy more as I'll look for sustained strength before completing the buying. It's 157.5 now.

12.44 The market has given back most of the early gains and is now up 6. I've lightened the load with a small sale in Sbm at 32 (v 24) and Mah at 67.5 (v 61.5).

3.04 The market is now down 6 although off the recent low of down 20. There were a few 60 minute sell signals earlier and I was tossing up whether to take them or not. I hedged my bets in Mah by selling just under half and ignored the short term sell in Lnc which is now down to 148. I'm really trading daily charts with help from the 60 minute and I'm trying to avoid overtrading, but it can be a hard decision to make. Here's Lnc on a 60 minute chart.

The sell signal was the break of 152 but I was looking for support at 148 to hold. It broke briefly and doesn't look brilliant but it's such a text book pattern that I'm prepared to give it some room.

4.12 Stopped out of Lnc on the match at 146 (v 148). I had sold out a third of the position for 155/156 earlier in the week. The market fell 2 points, again outperforming the region, as the US futures indicate a lower open tonight. In terms of my trading today, it was a mistake to sell Mpo and there was no rush to buy Bly. Tpi finished at 156 which was my average entry price. Not selling Lnc earlier was a misjudgement, but it's interesting that I didn't sell Lnc when I had a signal but sold Mpo when I had none. Another couple of entries for my slow learner file.
Took the example of Mpo and bought back the Sbm I'd sold at the same price of 32. Gold has held above US$1000 all day and the gold stocks are still charting well.

Late out of the gates. Tue Sep 8

The US was closed for a public holiday but European markets bounced close to 2% as Kraft made a bid for Cadbury's. At 10.15 am, we're up 27 points and it's looking like the Australian market might have overdone the caution with the UK just missing out on a new intraday high but easily making a new closing high. The chart for the German Dax is more like that for our Xjo index but the gist is that the sell off that has been anticipated seems a lot less of a sure thing.

10.25 Lyc is still running - I should have gritted my teeth and bought more on the close! Still, Lnc is also performing well, up 9 at 159 and Mah is up 3 at 64.5. I've bought some Emeco holdings, another mining services company like MacMahon.

Long at 82.5 as it has traded through that price which was the last swing high and has been up to 84. It has a similar chart to Mah but is not so far along. I'm half wondering whether I should be diversifying like this or just buying more Mah. I guess the key thing is that I have no obvious point to buy more Mah - I got in at the breakout yesterday - whereas in Emeco I can use the same signal as I took for Mah and have the confidence that another stock in the sector is confirming the price action. 12 It's midday and the market is doing well, up nearly 1%, with most of my positions performing well. I'm now long - deep breath - ehl, ifn, lnc, mah, mpo, sbm, tpi and a few gns rights. There are more positions than I'm usually comfortable with but I don't have an immediate problem with any of them. Tpi could be cut but I want to wait until the end of the day because the stock could still accelerate away.

The key issue is not whether I think the stocks are going up because it's still a bull market and most things are rising. What I need to focus on is what stocks I think are going to outperform the market - ideally, today or in the next couple of days. On that criterion, the best for me are Ifn, Mah, Mpo and Sbm.

1.20 Stopped out of Tpi at 151.5 (v 157).

3.01 Having been fretting about too many positions, I've added a new one in Gindalbie at 86. The correction in August held support at 80 and the stock has just made a buy signal with a trade at 86.5. I'm generally trying to focus on stocks which are already running rather than ones which look likely to run so I may have been hasty here. The overall market is still firm, up 64 points now and not far away from recent highs.

3.55 We've outperformed the other markets in the region today although it's probably only catch up. US overnight indices are up over 1/2 a percent which is a solid lead and may help us to hold most of the gains into the close. I'm selling out small amounts here and there where the stocks are showing signs of having a pullback eg Ehl and Lnc.

4.10 It looks like we've done the same as the FTSE last night on the Xjo index. The market has closed near its highs at 4524 which is a new closing high (for this year), while not quite making a new high on an intraday basis. I was a bit timid and sold out some Mah at an average of 68 (v 60.5) and Mpo at 130 (v 118.5) along with a very small amount of Gbg at the positive closing level of 87.5 (v 86). Because we haven't quite made a new closing high and the book is up 6% today I couldn't resist the temptation to take something off the table.

Gloomy Monday. Mon Sep 7

Despite a positive end to the week in the US and Europe the Australian market is resolutely in the doldrums. We're up 12 points at 11.32 am which is 20 points away from the early high. It's hard to get too critical about the action because the market has been losing momentum for a month now and the set up looks mildly bearish. On a shorter term level, I think the selling is overdone as we've got the rest of the day to go and the intraday charts for US markets look ok. So, I'm playing it cautiously and selling some stock but I'm not willing to sell out everything yet.

So far, I've sold out of Lynas at 73 (v 62) as it has had the quick bounce back to the old high but there is some hesitancy here. I've also sold out the Aio for square at 160 because I jumped on the momentum and it's stalling now. The other sale is in St Barbara where I sold the second tranche of stock - a third of my position - at 27.5 (v 25).

I've added a new position in Trans Pacific industries at 157. This is a fast moving chart and I'm trying to buy a resumption of the rally. My risk is that the pullback is more complex and I'm buying a retracement high. I paid 158 and 156 before the stock fell back to 152 but it seems to have stabilised in a soft market so I'm hopeful that there's some real buying interest here.

1.18 The Xjo index is up but still scraping along the lows of the day despite other regional markets having opened and consolidated positively.

2.28 I've been watching MacMahon holdings today and I was tempted to buy some about an hour ago before I went to the gym. However, the combination of lukewarm broker opinion and a stock that hadn't broken last week's high led me to hesitate. Now, it's trading above 60.5 and it's starting to look promising.

Long at 61.5.

3.46 Suncorp is up today. NAB has just declared that it is a substantial holder - 7% so far. It must have been a badly kept secret because the stock raced out of the blocks this morning only to fade throughout the day until the announcement a few minutes ago. The market is shaking off its malaise gradually and is now up 23 points as the rest of the region rises solidly. It's still a very cautious market though.

3.59 I've just bought some Linc energy at 148. They're finishing strongly and breaking out of a range having been depressed by an equity issue.

4.07 Today I've been struck by the compulsion to be busy, to feel like I'm doing a job.....and so far it has cost me money. There was no need to get out of Lynas which sat in a range for a few hours then kicked on again, while Sbm is also firmer. Meanwhile, Tpi was a top of the range buy and only Lnc is looking smart. I had spare cash to add a new position or two so really didn't need to sell anything.

4.14 I forgot about Mah, which is actually quite a good chart, although not as good as Lyc because it's still below recent highs. I had quite a good day with Mpo and Sbm strong but it could have been much better with some more patience.

Austar. Fri Sep 4

It's a very subdued recovery today after a better than expected night in the US with gold running again and base metals bouncing strongly. The Xjo index is up 33 points at 11 am. It's not altogether surprising because I'm expecting a lower high as a precursor to further falls next week. When I run through the charts there are quite a few which look like they may have peaked in the short term.

This morning I jumped back into Lyc at 62 and it's now 65. This was one of those situations where I should have cut very early or very late. In the end, I was squeezed out of my initial position without waiting for it to test support. Regardless, this is a reasonably good retracement trade.

One of the few stocks still charting well is Austar, a regional pay TV provider. Even so, it has a fairly mature chart and I'm targetting about 118-120. Long at 108.11.39 I noticed yesterday that I was getting a bit impatient in my trading again. Cgf, which I cut yesterday at 320, has hit my target of the mid 330s. It's 335 right now.

12.40 Stopped out of Ipl at 305 (v 304) as it can't get moving. These retracement trades are generally high momentum ones, the bungy jump effect. If it's not moving fast then I don't want to be in it because the technicals aren't terrific otherwise. Challenger was different as it is in a clear uptrend. It wasn't such a bad decision to get out yesterday when it made a new high and reversed but I noticed it going again this morning and sadly, didn't get on - 344 now!

2.10 The gold sector is only moderately higher having run hard yesterday and overall the market is also grudgingly higher, up 15 points. I'm planning to buy some Aio which has just made a minor breakout on good volume as it traded at 160.5. It's a tad lower now but the outlook for the company is improving and the board has just had a shake up which seems to have met the market's approval.

I'm concerned that it may not have had enough of a pullback but I think the momentum we've seen today could be enough to drive it through to a new high at least. Ok, just paid 160 as I couldn't get set at 159.5.

2.29 Just changed my mind on Aun and sold out for 108.5 (v 108). It occurred to me that I should have been buying this on the open yesterday - as I did with Lyc today - and that my entry point is too 'wishy washy'. It's still a good chart but I'm a day too late.

3.04 Molopo, a gas company, has resumed a rally and I'm long at 118.5. Not too bad an entry as I've been waiting for a break on the 60 minute chart which is at the level where the stock stalled on the last 3 daily bars.

4.10 In an all too familiar style for a Friday, the market has sold off all day and the gain was a mere 6 points. Sbm closed unchanged, despite further gains in gold intraday (so did Lgl and Ncm) but Lyc finished at 68 and Aio at 160. More on Monday.