What squeeze? Mon Nov 30

Not so much a credit squeeze as a short squeeze this morning. The half day's trading in the US on Friday was a session of relatively modest falls which helped the Europeans to bounce around 1% having fallen by 3% the day before. So, at 11.43 am, we're back up 110 points compared to a loss of 136 on Friday. This is 2.4% and probably a bigger gain than expected. The Dubai backdrop is that the UAE has undertaken to provide support and this has no doubt helped. Meanwhile, Japan and Korea are also ahead over 2% while US futures are up a tick.
My short positions have overall performed ok. Specifically, I've given back half of my Friday's gains while the index has clawed back more than three quarters of that loss. Of course, these positions have been driven by chart signals and not by Dubai's problems. I think most of the nervousness around the globe is based on fears of Chinese overheating so after this bounce back is complete I expect further weakness. I'm trying to assess which of my shorts are still valid so in one sense Dubai has muddied the waters by generating volatility.

11.55 I used the bounce to exit a long position in Arrow Energy at 393 (v 410). I was hasty to buy this in a stock where I was in two minds.

I'm fairly happy with the early days of using reversals to get into positions early but there are plenty of lessons to be learned. One of them is not to push my luck by looking for a second attempt to rally because it's probably not going to go too far and I could miss a good move down. Qantas is an example of this.

I succesfully traded the first bounce on a reversal in early November but then tried again which cost me some pretty obvious opportunities to go short. The reason not to expect too much of a bounce was that the fall into early November had clearly broken below previous lows. On the short side, I can see that caution might have been in order with the first sell signal 8 bars back (just after I went long), but the next one 4 bars back (when I cut my long) was a very decent opportunity.

The Xjo index has just make another minor new high but hasn't followed through. It's consolidating just below near term resistance and I'm hoping for a failure here.

12.36 The Xjo continued on with another little burst so that we're up 126 points, 5 points below the high. The big outperformers are the banks which are experiencing gains above 5% in the case of Cba and Mqg.

1.05 Fortescue is my worst performer today and while I can see the motivation for this trade I have slight regrets. Firstly, the breakout level was around 413 and I risked a big gap to go short at 397. Secondly, I had noticed the potential for a further leg up because it looks like a small 1 and 2 wave were followed by an extended 3rd wave (which was itself a 5 wave pattern) implying that after another correction there could be a new 5th wave high. As I said in reference to Cey last week, I don't really like to get too arcane about the wave patterns but it might have been enough to convince me to wait for a better opportunity.

I'm still short with a stop above the little 5 bar trading range.

2.47 Mirvac Group has been one of the few positive charts around. I think the gap is too big to take this reversal opportunity to buy here but if there's some easing back then I might get on board.

Stockland Group also looks ok but is a much more choppy chart.

There's also a reversal setting up in Aristocrat and this might be worth taking. The stock had its retracement in November followed by a drive down to a 5th wave low.

3.52 An amazing day today, we're within a point of erasing Friday's losses. I'm not near any stop losses though I bought a few Fxj on the open at 156 (v 166) and some Ozl at 120 (v 126) earlier. I'll probably buy a few Awc and Ipl soon, just on the basis that they've underperformed today - not that that's compelling logic, but I'm keen to reduce the short size a little.

4.17 Mgr was the standout trade today which I overlooked but perhaps I'll get another go at it. Otherwise, I just reduced position size some more on the close in a few stocks. Awc at 154 (v 165), Awe at 268 (v 271), Bsl at 271 (v 276) and Ipl at 285 (v 292.5). The gain by the close was 129 points leaving the Xjo in no mans land.

It's a striking reversal but I don't think you can take it as a buy signal until and unless it can get back above last week's highs. At this point, it looks like a rally back to the breakout.

Bai bai. Fri Nov 27

Dubai World is having trouble paying its debts and so, most unusually for a day when the US market was closed, we had a big down night in Europe. US futures were actually open and they followed suit. The AUD, oil and base metals fell although gold held. European banks and miners were heavily down and major European indices were all lower by more than 3%.

An hour into trading and we're having our first intraday rally attempt after we worked our way to down 3%. 25 points off the low at present. All my stocks are down and fortunately, the two longs which are Aoe and Tls are the best performers. As for the short positions, I've been early into quite a few of them and they're starting to look like downtrends have set in.

I had two debatable shorts on the close. One of them was Cey which has settled around 325-327, about where I thought they could hold if there was to be another attempt at a high. I bought back half at 323 (v 335) on a dip down because the chairman's address today is upbeat on coking coal and they're holding well.

The other one is in Ipl which is now confirming my double top and reversal theory so I've held the short and just bought back a couple at 286 (v 292.5).

I've bought dribs and drabs across the board to take a little profit. A few Awc at 152.5 (v 165), Djs at 559 (v 577), Fxj at 158 (v 166), Ost at 289 (v 300), Ozl at 118.5 (v 126) and Tse at 389.5 (v 409). I've also bought a third of my Asciano position back at 163 (v 161.5) since they're holding, understandably, because Dubai World is their Australian competitor and is in trouble. I was within a tick of having to cut this yesterday at 167.5 so I'm willing to take some off.

I've also reinstated the Awe short at 272 this morning. I was looking for further weakness below 275 and the recent trend channel is convincingly broken now. By the way, the weakness in Europe has accentuated the divergence compared with the DJIA and to a lesser extent the S&P500 and NASDAQ which haven't made new highs.

The last week or so has been tricky with a lot of stocks at turning points. It's a lot easier to jump on reversals when they're in the direction of a clear trend. Now, it's looking more and more like a downtrend could be in place.

12.27 Fortescue has gapped down but if the rally is over then it can easily move to the October lows below 360 so I've taken a short position at 397.

2.48 The market has been chopping around with a loss of 2.5% for the last few hours. No real changes for me. It's a pretty strong sell signal on the Xjo index so it's just a question of sitting tight and hoping for some bearish momentum.

4.17 We're closed now with a loss of 2.8%, nearly matching the European losses. The Hang Seng is the worst of the markets in this time zone, down 3.5% and US overnight futures are around 3% lower as well. Quite a good day for me, more on Monday.

As you were. Thu Nov 26

It's more groundhog day than Thanksgiving week with the market unchanged after an hour and a half having sold off from a bright start on the back of steady overnight rises in Northern hemisphere indices and in gold, oil and base metals.

I'm glad I bought back my Arrow Energy short yesterday because it was marginal at best. 17% shareholder, New Hope Coal, who are in turn controlled by Soul Pattinson, have announced that their stake is for sale and it has had the perverse effect of rallying the stock. I imagine that rather than having a large holder drip feeding stock into the market there is now the opportunity for one of the big coal seam gas and LNG players to take a stake. I'm long now at 410 on a bullish reversal.

My other new position is also a long in Telstra. I stopped out a few days ago at 333 because I was worried about a second leg down despite being bullish overall. I felt justified initially as it edged down to 328 yesterday morning. That was as low as it went and having made a double bottom it reversed giving a second buy signal just before the close of trade at 336. I didn't take it thinking that I'd wait for a breach of the recent high at 338. That was obviously going to happen on the open and yesterday's bullish reversal was a good sign, so I bought at 340 on the open. It has now pushed on to 343 as it looks like the parliamentary debate about the carve up of Telstra will not now take place in this period. This also raises the possibility of a relief rally as the government was playing hardball and talking down the valuations that they would be prepared to put on Telstra fixed line assets.

11.56 The sell off is gaining momentum. Down 11 points after a 40 point turnaround. I've put on three new short positions but I'm hesitant about all of them. I'm willing to put them on because I think momentum favours them but I might take them off again later.

Perhaps this will help me clarify my thoughts. Ok, first up is Awe, which gave me a sell signal that I didn't take yesterday. I'm short a partial position at 280 which is better than yesterday's level. I'm still working on the potential for this to have made a lower high with a small sell signal generated yesterday. The trouble is, it looks a bit like a pennant formation and is still, just, holding a trend channel. I suppose a second dip below 275 would be much more convincing but with today's sell off gaining momentum I thought it might be worth dipping my toes in the water and maybe getting a better price.

Cey is the next one and again, it's just a tentative position so far. It also gave a little sell signal yesterday but it's another one where I could see this having a last run up to a new high. The recent run up fell just short of the August high. It seems to me that this rally has formed a small 1 and 2 wave followed by an extended 3rd wave which itself has a 5 wave pattern. If that scenario is correct then this is a choppy correction which should hold above the 1st wave peak of 325. Despite this analysis, I'm not a big fan of expecting wave patterns to unfold in a textbook manner but it's nagging at me with this trade. I've included a larger range of days to show the big picture followed by the usual closer look.

12.27 The market is bouncing in it's tight range, now back up 3 points and my speculative shorts are edging up. The last one is Ipl. On Tuesday this reversed from 301, the same level that had held it in early October. Today it made a tentative double top with early sales at 301 before a sell off. I've gone short at 292.5 but I can see that I've jumped the gun. Ie, I haven't waited for a reversal short signal, which itself is a very early entry, and would be triggered tomorrow by a break of today's lows. 2.56 We're back around the lows now with the Xjo index down 16 points.

3.48 Still in two minds on Awe so bought back at 278 (v 280).

4.11 With the US closed tonight for Thanksgiving, I've left the debatable shorts on in Cey and Ipl. A flat day for me although I got sucked in by the early strength in Aoe which retraced to close at 398. I'm sticking with it for a little longer, it strikes me as a stock which is turning around as it makes higher lows and more attempts to rally.
Market closed down 14 points, Hong Kong and Shanghai are both weak and down by a little over 1%.

Cold money? Wed Nov 25

This morning's overnight report in FNArena made a good case that the relative outperformance in the US, at least with regard to Australia, is probably due to hedge funds packing up for Christmas having banked 60% in Australia plus another 30% on the currency.
So far it's more of the same with the market drifting off 10 points already - it's 10.37 am - after an early rise probably predicated on the thought that we'd underperformed yesterday but US markets had held steady.

10.50 A small recovery now as the Spi contract bounces off Friday's lows. The sell signals in Bsl and Ost have come through.

Short Bsl at 276, unfortunately I missed the best price of 279.

Just short a small parcel in Ost at 301 as although it has broken below recent support it is still quite resilient.

11.34 Stopped out of Qan at 263 (v 278) as it ground below my stop of 265. The market overall has reversed again so that we're now up 17 points. It also made an exact double bottom at 4673.2 so I'm not feeling trementously comfortable about having 9 shorts and only 1 long especially as that long position is very close to my stop level. Still, none of the shorts are rallying so far.

11.45 Stopped out of Csr now at 180.5 (v 185.5). I was very patient with this one and was expecting a push towards 200 eventually but it now looks more and more like a failed rally.

12.22 This is Thanksgiving week in the USA so with their market closed on Thursday and partially on Friday and few other catalysts for action then we can expect an increasingly quiet week.

3.21 Earlier I sold some more Ost short at 299 to take the average to a fraction above 300. As I'm quite heavily short now I decided to buy back Aoe as it's the most marginal of my positions. So far, I've paid 401 (v 403) for just over half.

3.29 There's another sell signal in Awe with trades at 275.I haven't taken it yet because I feel like I've got this same trade on in various stocks. I think I'd prefer to take it tomorrow if there's some continuation and I haven't missed too much. Meanwhile, the market is on its highs for the day, up 33 points.

3.50 Tls and Qan, two long positions that I've chopped out of in the last two days, are both recovering. It was a judgement call to sell out with both and given that I have a lot of short positions perhaps it would have been wiser to stay in these.

Qantas is the most irritating because it continues to look like a choppy retracement from the small early November run up. However, a rally tomorrow would give me the opportunity to buy again.

4.13 Closed out the short in Aoe, buying the balance at 399 (v 403). The market finished on its highs with a rise of 37 points.

Got my thinking cap on. Tue Nov 24

A strong yet strangely unconvincing overnight rally has squelched my idea of yesterday's action being a gap filling rally, at least on the micro picture I was looking at. However, at the daily level, it has been lacklustre so far, with the market building to an early peak with a rise of 47 points but rapidly retreating from it so that at 11.15 am the market is up 25 points.
This leaves us with a situation where the Dow Jones Industrial Average has made another new high while all the other major world indices are still sitting below recent peaks.
It's a puzzling situation and my trading signals are equally unclear. So much so, that I've sold out of Telstra for square at 333 because I thought it wasn't a strong enough signal while I've not yet acted on a buy signal in Onesteel - fortunately - because of a lack of clarity.
My overall position, which is net short, is moderately against me but I had feared that I would need to stop out of Asciano and Alumina. Awc is actually down on the day and although I'm not out of the woods in Aio, it's only up a tick.

12.28 The sell off gathered steam, we're now down 6 points on the day and I'm feeling more comfortable although my positions are still slightly against me. A few more potential sells are taking shape now.

Bluescope Steel has been making minor new lows and I've been tending to trade this on the upside while at the same time feeling that the weekly chart (below) is quite bearish.

The weekly chart shows that we're on major support so a break of 280 could be quite bearish. Here's the daily.

Onesteel has a similar weekly pattern to its competitor Bluescope and I've been equally puzzled because when a stock is holding support with only marginal range breaks it is often quite likely to squeeze out the shorts with sharp little rallies. I was leaning towards a buy in Ost earlier because it looked like it might have completed a retracement from the early November surge. However, it's now looking more likely to give me a sell signal with a tight 1-2-3 breakdown starting to set up which would be triggered by sales at 300.This would still be quite risky because there's key support at 293 but given the weekly charts for both steel stocks and recent reports of a Chinese steel glut, I'm tending to the bearish side.

OZ Minerals is another metals stock that is looking as if it might have made a lower high. There's a small sell signal in the offing if it goes below 126.

1.27 Short Ozl now - half at 126 and the rest at 125.5.

3 pm Having fallen for most of the day, the Xjo index is making the first attempt to rally but is still down 17 points. The rest of the markets in this time zone are similarly unimpressed with the Northern Hemisphere rises last night. Most of them are down further than the Xjo.

Qantas is looking shaky having opened strongly today. I went long this last week at 278 when I really had no good reason to do so. However, there was a nice reversal buy signal yesterday and the strength continued in to this morning. Now it's testing recent support at 266 and I'm not sure whether to put my stop level at 265 or leave it at 259. I think I'll use 265 because while I was initially expecting a second leg up, time is now running out and today's action is discouraging. The other thing is that there's now a sell signal setting up at 265.

3.58 The sell signals are coming along thick and fast. Short Aoe now (at 403), as it breaks below the pivot at 402, while a few others are close.

4.16 The final scorecard shows a loss of 32 points. Awc was my best performer as it fell 7 to 162.5 and confirmed my tentative sell signal by breaking last Friday's low.
A solid day for me and my book is skewed to the short side now so I'd like to see some follow through.

Gap filling. Mon Nov 23

US and European indices had only modest falls on Friday night so our fall in Australia was a little overdone. My working model is that the Xjo has peaked and although I'm not completely convinced, it seems like, say, a 65-70% chance. I'm more confident in the short term where I think we're filling the gap to about 4730. We're up 30 at 4716 at the moment, 11.25 am.
Of course, the nice thing about short term charts is that I'll know pretty soon if I'm wrong.

So far this morning I've bought Telstra and gone short in Fairfax.Telstra, above, is not the most exciting stock for my time frame but it's pulling away from the low in September and I've bought on the pivot created by Friday's pullback. The last two slow grinding upswings have created a base and the fact that the last swing didn't show any acceleration implies that it could be a larger pattern with a 3rd wave move to come. My main concern here is that the last swing had a deeper pullback and I don't want a repeat of that. Long at 333. Looking at the macro picture, if the market top is in place then this quintessential defensive stock could certainly go for a run.

Fairfax is one that I've decided to chase because of the change in tone of the market, typified by the rapid reversal in Aristrocrat. It ground up to a lower high on the daily chart, but with no obvious wave pattern within that upswing I was reluctant to take a reversal trade. However, the signal was at 171 and I was able to get short at 166. While this is a significant miss, I also think it's a high probability trade with a very good chance that a fall might extend below this month's low of 152. So far it's going my way, having bucked the trend to be down 3 now at 163.

Other than this, my existing positions are mixed with no significant changes so far. Qantas is showing promise. This is a stock where I went long after the first pivot only to see it push down further. I was confident that there should be another attempt to rally and I prefer to use the swing low as my stop but I was beginning to worry that this wouldn't hold.

11.58 I've taken my short position in Transfield back to a full position with a sale at 409 having previously bought back some stock at 420. I'm much more confident now that this has had enough time to rally and hasn't found any significant buying support. I'd love to see it break below 403 because it has now been in a trading range for 18 days and a break of a range often signifies a decent move.
1.58 The index is hovering around below resistance. It's up 33 at 4718, down from a high of 4725. Gold is the story of the day, up 16 at 1164 and finally starting to kick on in local terms as the AUD slips against the USD to 0.92 having peaked last week above 0.94. Because I'm usually looking for early stages of moves, it does mean that I'll be out of trends that keep driving on. Sadly then, I'm on the sidelines as Lihir Gold is up 11 to 369 today. No trading method is going to get you on every trade although it's some consolation that if I was adopting the same approach using weekly charts then this is a trade I would be long.

4.21 We've closed with a gain of 31 points and I'm still going with my working proposition that this is a gap filling rally. My two new trades finished at my entry price while the balance was slightly against me as a couple of the shorts that I was late into are having a leisurely bounce.

Ring them bells. Fri Nov 20

US stock indices fell hard at the open last night on further signs of slowing in the recovery they've had since the depths of the GFC. The indices recovered from the open but still closed well down. Although rates are going to stay low for a long period, fiscal stimulus programs are tapering off now and I find it hard to see further upside in the medium term as momentum in the US stock markets fades. Here's a monthly chart for the S&P 500. It's been a strong rally but probably a retracement rally and it might be difficult for it to test the swing low at 1200, the break of which triggered the big acceleration down in the middle of 2008.On a daily and weekly basis the trend is intact with higher highs and lows but a look at some of the other major markets shows that divergence is developing. For example, the FTSE and the Hang Seng are following the S&P 500 but the DAX, the CAC, the Kospi and the Nikkei have all broken their uptrends, like the Xjo, even if they haven't all developed downtrends.

Just over an hour into the trading day and we've fallen in line with US markets continuing that recent theme of underperformance given that we seemed to be expecting this weakness for the last few days. We're down 1.3% which is only just above the day's lows. My positions are slightly outperforming with the exception of Aoe, which disappointed expectations by failing to announce anything to excite the market. It has dropped 9 to 413. I sold a few at 415 (v 396) and retain just under half of my position. Bsl has gone through my stop level but has found support so I'm hanging in temporarily to see if I can exit at a better level.

Aristocrat is the one that got away - I was tempted to short it yesterday afternoon but decided to wait for a retracement to get in at better levels. It's the biggest loser in my watch list down 5.5% at 431.

11.36 I've put on a partial short in Awc at 165.5 as it looks very much like All. The index is still trying to rally so I'll wait before completing the selling. The Awc chart shows a lower low compared to September and (if it's complete) the bare minimum that you might expect from a retracement rally.

Ipl is an odd chart and I've decided to sell out my balance on a trailing stop as I'm not quite sure what to make of the daily while the 60 minute shows a 5 wave pattern potentially completed. Out at 284 (v 262 plus a divident of 2.3 c).Also out of Bsl at 283 (v 290.5), so slightly better than the stop level of 280.

12.40 Bsl is interesting actually, a fractional new low but generally holding support, it's now back to 285 so I could have been more patient. I'd actually been wondering whether this might happen and it could set up for another reversal trade on Monday.

On second thoughts, I'm probably too bullish. It did make a lower high in October and it's not surprising that there should be some support here.

In the meantime, I've completed selling Awc at 165 to average 165.25 and I've shorted Asciano at 161.5. Aio is more difficult but it looks like the retracement rally petered out rapidly after tracing out a choppy pattern. I think it's a reasonable reversal in what could be the early days of a downtrend with lower highs and lows forming.

2.06 The drop in Aoe gathered momentum so I sold the balance out at 404 (v 396). I'd normally like to give it the opportunity to rally after a pullback but the sell off has been pretty steep and there doesn't seem to be much support.
3.24 Interestingly Bsl is now up 2 on the day to be 288 so I could definitely have stopped out at better levels. I'm still in two minds about this one.
The market has held the line from this morning. I shorted All at 432 and bought it back at 425 as I tried to get something out of this missed opportunity.

4.10 Regional markets have strengthened during our afternoon session and we've lifted slightly. I'm now only long Csr and Qan and short Aio, Awc, Djs and Tse. It hasn't been a particularly good day but neither has there been any real harm done and the week has been solid. The increased possibility that we've made a high here suggests that there could be some nice trades on the short side in the weeks to come.
Overall, the Xjo closed down 63 points.

Nice day for a harbour cruise. Thu Nov 19

I've just been for a harbourside walk with a few visitors from interstate and overseas. I left them as they hopped on the ferry and being a beautiful day with a gentle breeze I'm beginning to wish that I'd joined them for the ride. It's 11.52 am and the market is up 10 points after a flat to slightly down night overseas. We've substantially underperformed European and N. American markets over the last few weeks and the local market is still in the doldrums.

I sold out the last of my Awc at 169 and 169.5 (v 163.5 and a few at 167). I realised I had another conundrum here, in that it was the first new high after a swing and therefore I should have sold out my first tranche on the close last night. As for the extras I bought, I figured that although I could make a case that they were a separate trade on a breakout and therefore I could run them for longer, it was simpler to just sell them out too. The chart overall is not particularly bullish, if it was then I might act differently. Anyway, I got lucky with slightly better prices than last night's close of 168.5.

Otherwise, my positions are pretty neutral but slightly in my favour.

12.58 It really is a ho hum day with the biggest riser in the top 50 up only 3% and the biggest faller down 2.3%. Apart from these 2 there are only 2 more stocks which have moved more than 2%. The Xjo index is up 4 points, the Nikkei is still suffering and is down 1.5%, but that disconnected from other world markets in September, while the Kospi, Shanghai Composite and Hang Seng are all up.

Tuesday was the key for the Xjo index. It reversed hard following a bullish lead, having just made a marginal new high. It indicated to me that we would need some backing and filling before confidence could be restored and so far we've had a rally to a lower high on Wednesday followed by further choppy correction. It's shaping up like a mini pennant style correction so, absent any big falls overnight, I would anticipate either tomorrow or Monday we'll get the next kick up.

Looking away from this micro picture, the rally on the daily chart is probably incomplete, it looks more like a pause for breath. However, the little new high just raises a slight possibility that this is all we're going to get.

3.33 The market is still doing very little, it was 10 points down at its worst but is back up 6 now. I realise that I've missed a bearish reversal opportunity in Aristocrat but I'm hoping that if there's a broad rally at some point over the next day or so then I might get another shorting opportunity. Here's the chart. The value of my approach to sell the first swing high after a pullback is highlighted here because I sold out two days back. I was wondering then if I should give it more room but with the benefit of a couple of days more action, it's interesting that with the lower low early this month, the stock has had a fairly standard retracement rally. I missed my chance on the close yesterday but it's a good lead indicator for a couple of my other stocks which are looking similar.

4.20 The index closed up 10 points on another quiet day. Aristocrat is on the horizon for a short, while Bsl and Qan are still edging down but not flirting with levels where I'd stop out. My two short positions, Djs and Tse, went down and Tse, in particular, is really setting up in a head and shoulders formation.

Just waitin' on a trend. Wed Nov 18

An early start to my blogging day because, frankly, I've nothing to do. It's 10.30 am and the index is up 27 points. Overnight the US market managed a late rally for a small gain while the Europeans eased back. Base metals, oil and gold held steady so there's not a big lead, just an unwind of yesterday's bearishness.
I do have a number of positions, 6 longs and 1 short, but there's no action required and nothing much on the horizon. I half expected the local market to peel off after early strength and it is still pretty early, but the signs are good so far for the rally to extend through the day.

11.24 The market has kicked on to be up 47 points. Aoe has had a good run to 416 and Awc to 174, both up more than 3%.

1.48 Arrow Energy is the story of the day, up 7% now at 426. I sold a few along the way at 420 but I still have 2/3 of the original position.

Mirvac group is a trade possibility as it has been forming a tight corrective range over the last week. It's not the sort of tight 1-2-3 breakout I prefer but the fact that it hasn't pulled back much, so far, from the surge off the lows is pretty bullish.

1.57 I've been thinking a lot about what I want from my trading business over the course of this year and many of the ideas are coming together. For example, consistency, so that I take a trade in one of my stocks (almost) every time and there has to be a good reason not to take it. This makes it easy to get into and out of positions without second guessing myself or the market. It also will make it much easier to increase position size once I'm comfortable that this particular approach works for me.

3.11 The caution from yesterday has returned and the gain is only 14 points now.

There's a reversal trade in Djs on the short side. It made a new high yesterday at 596, marginally ahead of the early October high of 594. It looks to have completed a 5 wave rally too. I saw this possibility yesterday but I was reluctant to take it earlier thinking I'd wait for a lower high. However, it occurs to me that if this was a buying opportunity I'd probably be keener, so looking at it again and accepting that I'll miss the entry point of 585, I'm looking to get short here.

3.22 Sold the first part of my position in Djs at 576. Also, sold a quarter of my Ipl balance at 284 (v 262).

4.10 The market closed up 10 points, reacting to bearish markets in Japan and Hong Kong perhaps. I finished shorting Djs at 579 to average 577.5. Earlier in the day I sold a handful of Awc at 172.5, they finished unchanged at 168.5. Arrow Energy was the star of the day, holding most of the gains to finish at 426 while Ipl gets an honourable mention for finishing up 9 at 285.

What does it take? Tue Nov 17

Overnight European and US indices were firm. Here's a daily chart of the S&P 500 index.

The S&P 500 is broader and more indicative of the market than the DJIA so it's the best comparison to the XJO index below.
We're lagging by quite a distance and the market at 11 am has faded to be up only 20 points despite the strong lead being assisted by gold, oil and base metal price surges.

Fortunately, I followed through with my plan to finish selling out the stocks that had made a new high after a swing against me. The sales were the last of the Cey at 355 (v 328), Fmg at 432 (v 402), Ozl at 130 (v 120.5) and Sgp at 414 (v 385.5). These were all better than last night's closing prices. In addition, I sold out the rest of the extra Ipl from yesterday at 280.4 (v 268) as it reversed after a strong open and a couple of Bsl at 297 (v 290.5). I also started to close out my short in Gff - I missed this yesterday afternoon - buying back about a third at 153 (v 157.2).

Awe has had a choppy rally but it pushed on this morning to a new high so I'm looking to close this out by the close. Usually, I'd want to wait until the close but with the market pulling back I decided to sell some at 282 (v 267).

I bought a small amount of Asciano this morning as it pushed up through resistance. This is more of a 5th wave type trade and I'll probably just look for it to move to the top of the trend channel.
Yesterday, Ost fell as low at 303 after I stopped out for 308 but then reversed to 314. It's up again to 317, has been as high as the breakout level (briefly) at 319 and I'm wondering whether to re-enter on the long side.
11.32 Just gone long Qan at 278, looking for the next leg up.
The market is only up 3 points now.

11.52 Also added to Awc at 167, as it follows the Qan lead. I had sold about half of the position on the run up so I've reinstated a full position.

1.37 The market is on its lows, down 7 points, with the rest of the region slightly soft. Most of my positions are a bit worse although Awc is doing well, up at 171. I've got buyer's regret in Asciano - I'm trying not to take 5th wave type trades whereas, Qan, which is back down at 276, is not an issue for me.

2.50 Down 23 points now and given that we made a marginal new high this morning, it opens up the possibility of this being a lower high on the index. I suspect not, but it did inspire me to get out of my silly trade in Aio at 161.5 (v 166.5). Fortunately, this was for less than half of my usual dollar amount.

3.50 I've bought back the balance of Gff at 154, averaging 153.5 against a selling price of 157.25. The market hasn't managed to bounce much yet but I'm happy enough with the positions I'm keeping overnight. I'll be selling the last of the All and Awe on the match as they've pushed on again. Aristocrat may have more in it but I haven't got much left, otherwise I'd keep half to try for a better price in the morning.

I've been trading this as a reversal but if I'd only just got long with a more traditional 1-2-3 breakout, I'd probably be willing to stay long and wait for a stronger move. I was thinking about getting back to full size on this yesterday and this morning but was put off by the general pullback.

4.14 Out of All at 477 (v 430) and Awe at 281 (v 267) as the market closed near the lows. I also took off a quarter of my short position in Tse at 420 (v 412.5) as it's looking more and more like a trading range.
The Xjo index finished on the lows at 4729.4.