A bob each way. Fri May 1

Yesterday's blog finished abruptly as a friend visited and before I knew it the market was closing. It closed strongly up over 2% and has continued to do well today as we're only down 14 points despite a strong overnight US futures market during yesterday's trading having given us a lead which the actual US indices failed to deliver. In addition mqg has announced a capital raising along with a slightly better than expected result which might have put a dampener on the finance sector.
It was the last day of April and my trading day went better than the open might have suggested as I cut my shorts early and a few trading longs in mqg and wpl went ok. This morning ozl is the big winner, up 4 at 78.5. I sold a few at 77.5. Csl was also firm early although it has faded a bit now. I added a few may 3600 calls at 57 to my existing june 3300 call position as the trend looks strong.

I've been through quite a few charts today, from the top 50 through to smaller stocks in the resources and energy sectors. What stands out is that the overall index and many of the top 50 stocks have no momentum and are still chopping around below their recent highs while the smaller stocks are looking far more promising. A lot of them ran into mid April and had sharp pull backs but now are running again. Apart from some minor takeover activity, it appears that the strength in the sector is being driven by an increased confidence that demand growth or at least consolidation, is real.

You could pretty much throw a dart and find a reasonable buy but I'm trying to cherry pick the stocks which might be right to move now. I've come up with 3 of them. Atlas Iron, ago, is in iron ore; Riversdale Mining, riv, in coal; and Strait Resources, srl, in coal and gold/copper.

Here's the weekly for ago. There was a long consolidation from mid January then another run in April. It looks ready to make new highs after the small consolidation.

Moving to the daily scale, there was a text book correction from the run up to 145 and now things are moving again. I've bought some at 134. It's possible that there'll be a pullback to make a higher low than 127 from Wednesday and then I'd look for acceleration.Riv is a breakout trade and I've only put on a small position as I'm tentative about chasing this early on a Friday. However, the coal sector has been volatile recently and moves have been large. I'm long at 464.

Of the 3, I'm most enthusiastic about srl. I'm not exactly sure why, but it's got a shape which implies acceleration to me. There's plenty of volume going through and I'm just building in to a position having paid an average of 162.5.

There's another one I like, Kagara Zinc or kzl, which is down sharply today but looks promising overall. Weekly and daily follow.

I think the correction was complete earlier this week, that yesterday was the start of a new leg up and that today is just a partial retracement of Thursday's rally. I want to see some sort of sign that this thesis is correct so I'll look for any clues on intraday charts as to whether the pull back is over.

1. 30 The each way bet I've had is to put on some day trades in a few of the larger stocks. I've gone short anz, bhp and wpl. They haven't really moved yet - I don't think they're standout trades but there'll all stocks that are consolidating weakly below recent highs and given that it's a Friday they could get sold down as the afternoon rolls on.

I bought some more riv at 468 as they're pressing on and just got some more srl at 163.5 before they popped up a few cents to 166.5.

2.22 I actually closed out my short in wpl at 3865 (v 3849) as it's pushing the top of the range and serious resistance at 3880. As mentioned in previous posts, I'm confused about wpl and should stay away till I have a clearer idea.

Just bought some kzl at 90 on a 30 minute buy signal. Fairly flimsy but I like the big picture and want to make a start.3.02 A trader's prerogative is to change his/her mind. I promptly went and bought may 3800 puts in wpl at 105 as it failed to make it through 3880 resistance and started to reverse. I also bought some qbe june 2100 puts at 82. I could be throwing good money after bad but the stock is reversing and is still short of key resistance at 2240.

3.58 Decided to stay with my earlier shorts in anz and bhp overnight. I've also added a tiny short in rio. It's speculative as the daily and weekly charts are fine, I'm just looking at a potential lower high on the 30 minute chart and a quick swing down - for a one or two day trade.

4.16 The market held quite well into the 4.10 match although the spi is softening now. Ago and kzl held at my entry levels, riv is thin and chopped up and down finishing at 463, while srl sold off but rallied again to close at 164.5. Of the larger cap stocks, the ones that had been strongest early like csl, qbe and wpl sold off towards the close while anz, bhp and rio rallied slightly.

Overall I'm quite happy with the week. I made a few dollars despite the market chopping towards the top a range where I was looking for a failure and a sell off. I've reinstated my short bias in the larger cap stocks as it seemed like a good opportunity with a market reluctant to fall after yesterdays run. Here's the xjo for the week. Lots of indecision.