Postscript. Tue Jul 5

Thanks to everyone who checked out the blog occasionally, it was always good to see that there were a few readers.

I'm writing a new blog called "Trading as therapy" and it reflects my opinion that the main determinant of trading success is the mental approach and that trading seems to strip you of your pretensions and leave you face to face with yourself. I'm not trying to offer tips for anybody else, there are plenty of resources available from qualified professionals. I have a link to "Trader Feed" which is one such resource. The new blog is to help me pay attention to the recurring issues that trading throws up and figure out how to move on. (There's also a link to "Trading as therapy").

Despite that caveat, I do expect that my experiences will resonate with other people and might be worth browsing from time to time.

Demob happy. Thu Jun 30

It's been a tough June for me, my first significant losing month in what's been a pretty good year considering the state of the market. But I've finally come to terms with the pig's ear I've made of things lately and I'm looking forward to a fresh start tomorrow. The US indices rallied above the first recovery wave but haven't overlapped the last significant swing low so the situation is murky as to whether it's a wave 4 (a-b-c) rally or a more meaningful move.

The market has just opened with a 35 point rise.

10.44 It's arguably a better picture in Australia where there's plenty of overlap on the chart. However, it's more like a trend channel where this swing is pushing the upper limits of the channel. If there's to be a breakout, it's likely that there'll be a pullback to the middle of the channel and then another surge. For now, I expect up to drift off although the June 30 factor muddies the waters.

11.06 I got out of the RSG at 114 for a couple of cents my way. It was a momentum trade so I needed to get out quickly once the selling appeared.

11.43 Japanese and Korean markets are flat while the HSI is up 0.55% and easing having been open for a short while. The Asx 200 is therefore outperforming with a 30 point rise.

12.29 The HSI turned decisively northwards and has carried us up with it. The Asx 200 is now up 57 at 4587.

1.12 That's interesting, the rally in the Asx 200 has just broken the last swing high on the way down. It makes it very likely that the downtrend is over. Of course, there's short covering today and institutions are not going to sell much on the last day of a disappointing financial year, but despite that, it means that dips should be bought.

I've been a rabbit in the headlights over the last few days, seeing the potential but not able to act properly. FMG has kicked on today and I haven't managed to buy any stock there. I'm left with July 625 puts that are down to about 14 so I'm hoping for a second chance to buy in the next few days.

3.03 The index has just made another minor high above 4600 although this time its rejecting the level. It could be enough for the day. I'm stopping out of CGF though, it has been as high as 495 today and I'm buying a few at 490 versus an entry level of 482. I've made the odd jobbing profit around this position so it's pretty marginal.

4.10 Never a backward step as the long downtrend meant that there was nobody left to sell into the rally and the Asx 200 managed a 79 point gain to 4608.  I'm disappointed that today just made a bad month worse – and it was the only bad month – but happy enough to be starting afresh tomorrow. I think I'll take things easy though.

This is the last post for Trading diary of a late riser. It's been a useful tool for me but my heart hasn't been in it lately. I hope that readers have got something out of it. I'm going to continue to write about trading but with a focus on the psychological element. The new blog is called Trading as therapy.

On a promise. Wed Jun 29

Nearly there. It's the penultimate day of the financial year and it brings a strong overnight lead as Wall Street assumed the Greek vote would be yes although it's not due till about 7 pm our time. I think it could be buy the rumour sell the fact especially as the US moves were on light volume. Attention will soon be turning more squarely to the end of QE2 and the US budget position.

The sense I get is that the local players are not so easily satisfied as US investors and will probably sell off the early strength. Nevertheless, it's another day when the Asx 200 should hold above last week's low and there could be a tradeable c wave, at least.

10.45 Well, that's a bummer. RSG started to reverse late yesterday and in early trading. It just came out of suspense and jumped to 111 on good corporate news. Might be time to quit trading a stock that's a haven for insider trading scum. I stopped out at 111.

To be honest, charting is quite a good way to filter for odd moves and the late rally yesterday did raise some flags. I was thinking that someone must be trying to push the stock up for the financial year end and really, having smelled a rat, I could have got out quicker.

Otherwise, the market is up 41 but selling off slowly.

12.09 Once again, the HSI is underperforming the US lead while Shanghai is still having its pullback. The Aussie market just punched up to a healthy day's high of 4531, up 57.

I'm in a quandary because I'm anticipating a choppy rally before further falls, but who's to say that the market can't just keep going. I've got most of my short positions via options but they're not much protection for the first part of a move.

CBA is an example, it's just popped above last week's high of 5137. I was looking for a failure there. I'm long the July 5050 to 4900 put spread at a good level but I only managed to hedge two thirds of the puts. Here's the chart.

12.43 If you can't beat 'em, join 'em. I actually went long RSG at 112 after seeing the scale of the buying. It's always been a good potential story and if they can deliver the Syama promise of 410,000 oz at $730 an ounce then a quick guesstimate of $500 per ounce profit comes out at around $200 million. Not bad when the market cap is $530 million and they've got other mines too.

Fortescue is also looking quite bullish now. The stock has reversed after yesterday's breakdown. It now looks like longer term support from May 4th at 593 has held. If this is a pennant correction then there's good upside for the stock. It's still early days, but I'll look for an opportunity to reverse my position there.

3.08 Today is a different sort of session to what we've been having for the last couple of weeks. The market has sat stolidly in the range for most of the day and the recent day trading opportunities have been scarce.

4.12 A funny old day for me. With the end of year coming up, I'm loath to do too much but at the same time the downtrend and the impending completion of QE2 has me bearish. I stuck to holding on to a few shorts via puts and trying to job around intraday There wasn't much to gain from the jobbing because the market was range bound.

FMG finished at 620, the break of 620 was where I was looking to buy stock against my puts so I haven't done anything there yet.

Le Brady Bunch. Tue Jun 28

It was French banks to the rescue with a proposal for a Brady bond type workout which would enable a rollover of Greek debt held by private banks. Although the Greek austerity vote is not done with – it's tonight – it was enough for US markets to rally 1%. The estimate is for a 1 vote majority to gain passage for the austerity bill so it's a very tight call.

The Asx 200 is almost certain to hold support today after coming within a whisker of it yesterday and the question is whether to square right up as a Greek yes vote might lead to a serious short squeeze or to hold tight. Most of my shorts are held via puts so, pre-market, my inclination is to watch and wait. The Dow needs to rally 200 points to make a minor trend change and even then it would still look like an a-b-c retracement.

11.00 Up 34 or 0.8% at the end of the first hour. About right, I suppose. With so much uncertainty around and the year end coming up, we were unlikely to see strong buying. The banks are doing pretty well, mind you, as the US financials had a good rally and Basel reserve requirements are less onerous than feared. CBA is up above 5100 and my July 5050 puts are back down to the mid 60s. I'm hoping for a lower high on the daily. If I don't get it, I'll need to look to buy stock on dips and try to ride the rally.

11.25 On the smaller scale, the XJO needs to push above Friday's intraday high of 4521.5. The 60 minute chart shows that today's action is neither here nor there.

12.03 Gains are fading as Chinese markets are mixed. The HSI is up 0.4% and the Shanghai composite down about the same amount, albeit after a good rally over 5 or 6 sessions.

LYC is in the red now, down 2 at 193.5 after jumping up early with the broad market. The announcement regarding the environmental impact of the Malaysian processing plant is due at month's end and I don't want to be long or short going into that. I've just bought back a few at 194 and will buy the rest through the day. It looks well offered, there are plenty of 2011 tax year profits to take in this one.

12.50 The other day, I shorted RSG at 106.5. It has broken support today and it's a chance to slump.

1.31 The pullback is surprisingly persistent with the gain just 9 points. Here's the 10 minute XJO chart.

FMG has just broken 600 which has been a good support over the last 7 or 8 sessions. The stock is just hanging in there. I've got July 625 puts there so happy to see it crack lower.

I bought back more LYC at 192, just a few to go. I shorted more RSG at 102.5 and bought some of that stock back at 101, where it is now.

2.58 The market might have found the intraday low. The selling seemed overdone especially with the potential for further rallies overnight on a yes vote. Out of the last of the LYC at 192 and bought back some intraday shorts in CGF and CPU for a few cents my way which helped to compensate for overnight moves against my core positions. I also bought back another third of the extra RSG at 99.5, just in time as the stock has recovered to 103.

4.13 It was a topsy turvy afternoon but the eventual finish was at 4474, a rise of 12. A minor down day for me as financial strength in CBA and CGF did enough to outweigh minor weakness in FMG, LYC and RSG. Out of LYC now anyway.

Trying to hold the line. Mon Jun 27

More Euro concerns – Italy was in the picture also – were enough to limit the recovery rallies for the Europeans and to reverse the rally from the previous session lows in the US. The S&P 500 index held above the 200 day moving average but that looks like a temporary situation to me. The Greek parliament will vote on the austerity package on Tuesday night (our time) so that could be a circuit breaker but it's no sure thing to pass.

In the meantime, the Asx 200 is trying to hold the line above last week's 4452 low but it's a close run thing with the intraday low at 4456.5.

I'm working with the premise that the trend channel will stay intact which means I was short and I'm staying that way for a while longer. It's not one way traffic though. I got out of my TLS short soon after the open because the second round of analyst opinion on the NBN deal was less pessimistic. The sale price for the July 300 puts was 13.5.

CPU is continuing to fall and since it's not one of my normal stocks, I thought I'd have another go at developing a longer term strategy. I've sold July 875 puts at 23 which means I'm long the 900 to 875 put spread at 7. My plan is to sell more July 875, or maybe 850, puts once I feel as if the selling is easing. I'd be looking at a net credit for the ratio spread so the ultimate outcome is either getting put the stock at 875 less a discount of 25 for the 900 to 875 put spread and any extra credit from the second sale or the stock rallying above 900 which means that I pick up the credit on the ratio only or expiring somewhere in between with 875 the best outcome.

I've bought July 5050 puts in CBA also. The stock has slipped below Friday's low and I suspect that the retracement might be over. Ideally, I'd like to turn this into a ratio spread after a resumption of the downtrend. If the stock doesn't weaken then I'll have to scrabble out of the trade; maybe hedge with stock etc.

Otherwise, FMG and LYC are heading lower along with RSG.

1.11 The market is on its lows but just above the 4452 level. My positions are performing reasonably well but there is one that got away. I identified LNC as a short and got permission to trade but somehow missed the cue. It actually opened a touch higher before tipping over so it would have been a good day trade. Here's the chart.

2.10 I'm short CGF at 480 as they're slipping away after a 2 week retracement rally.

2.25 Asian markets are outperforming the overnight lead and that might have been enough to help the Asx 200 rally for an hour or two. The rot has set in again though and the market is testing the intraday lows, down 48 at 4460.

3.14 It looks like support will hold for the day; the action is contained within the tight intraday range established earlier and the opening calls in Europe are for a mildly lower open.

4.16 That's pretty much what happened, the index shed 46 to 4462. CPU kept falling and I'm in no hurry to sell the extra puts. I did hedge some of the CBA Jul 5050 puts by selling half the number of July 4900 puts at 49. That's 27 for the 150 spread. LYC drifted off and closed at 195.5, not before it traded below 195 which is a minor support. I'm hopeful that there'll be more weakness tomorrow as I have a core short position there.