Two for the price of one. Thu Dec 31

The last day of the year and of the decade too. The local market has continued to catch up with another rise of 34 points after about an hour.

I thought I'd write about two stock trades today because I didn't feature one yesterday.

Arrow Energy made a simple 1-2-3 buy signal at 405 and I got long at 406.5 - on Tuesday in fact. It also made a double bottom with a low at 382 on December 10th. It looks like a long choppy correction has finished and the stock should get up to the 440-450 mark.

The second trade is one I've done this morning in Fortescue. Like most of the market, I tried to short this recently but the stock has been making higher lows and a flat top. It's starting to look like a coiled spring and I jumped in a little early with a buy of 11,000 at 440. It has traded at 441 now which is a technical buy signal based on the high at 440 which was set 3 bars back but obviously trading above 445 and preferably a close above it too could set a fire under the stock. Being the last day of the year and given its status as a favourite short it's possible that it will get sold down on the (early, 2.10 pm) match out but I'd rather just get long than jump at shadows. 

2.12 There was a mild sell off at the close but the market basically held with a gain of 37 points. Fortescue traded as high as 448 and closed at 444 so I'm pretty optimistic about it.

There are four featured trades still open, all long positions, in Aoe, Fmg, Lgl and Mgr. At present, they're all in profit as you'd expect in a running market.

Best wishes for the New Year!

Sleepy hollow. Wed Dec 30

A flat night and early strength which is now (10.51 am) dwindling have given me the sniff of a reversal and I'm sticking to some intraday Spi trading since it's quiet and whippy on the stock front.

The 60 minute chart has the look of a completed 5 wave pattern about it.

I'm using the 10 minute chart for trading signals. I got short 3 at 4855 and bought 1 back at 4847 at a minimum target, 1 at 4841 as it bounced off yesterday's 4839 support and the last at 4845 as a trailing stop was triggered. It's $25 a point so profit was 8 points plus 14 plus 10 or 32 points for $800 less 9 dollars cost.
I've decided to use fairly tight stops most of the time in Spi trading as I don't want to be glued to the screen all day. My scenario for the day is that the Spi should go and test the recent low around 4815. Ideally this will hold around 4840 and rally for a while so that I'll have a chance to get short again.

4.32 No further joy with the Spi as it had a very flat 3 wave rally. I missed the chance to short at 4834 around 3pm but in the end it made a minor new low and tried to rally only to sell off in the last seconds. Here's the rest of the day.

High season. Tue Dec 29

The rally continues as we're in the middle of holiday season and despite a modest lead the market is up another 1.2% at 1.30 pm. The long period of potential topping out through November and December is finally over as the US has pushed through to new highs recently and most markets look set to follow. We're following harder than most as we compensate for some underperformance.

There are a couple of buying opportunities around and I've bought a half position so far in Mirvac Group at 153 which is 15,000 shares. I'll wait till later to buy the rest. This is bullish continuation after a pullback. I expect to see this break 160 and the conservative target is about 165.

3.03 pm I've decided to sell out of Csr completely as I'm not greatly committed to the position now. Sold the last 14,000 at 178.5 (v 172). Profit of $910 on the last 14k which gives a total of 1680 less costs of 31.

4.14 pm An odd day has finished with a good gain of 54 points. I completed the Mgr buying on the match at 156 for a total of 30,000 long at 154.5.

Stationery village. Thu Dec 24

I'm continuing to indulge my inner nerd - although my kids tend to think of it as my completely out, screaming nerd - and this morning my crowning achievement is to have organised my stationery draw. I haven't achieved nerd stardom though, like Howard from the Mighty Boosh who built a stationery village. See this clip.... http://www.youtube.com/watch?v=-gvZEB4s3-Y .

It's an early close today, a 2.10 pm finish giving most men in the financial industry time to do their Christmas shopping or alternatively drink for 5 or 10 hours and grab something at the convenience store on the way home.

I have no trades to report on today. I've done 2 scalping trades in the Spi and picked up a few hundred dollars but I haven't had a set up I've liked and although I've got a possibility in mind, I doubt whether there'll be enough time for it.

Gold bounced about 8 dollars overnight and is up the same in our time zone so Lihir is starting to pick up, it's up 7 at 324.

My other featured position is Csr. I bought 28,000 at 172 on Tuesday. It's a reversal type pattern, a spikey retracement after a slow sell off and since it has pushed on through the recent high, that's my minimum sort of target so I plan to sell half out by the close. I think it could continue a bit further so I'll run the rest through a small correction if necessary. Sold out 7,000 at 179 so far.

2.11 Sold the second set of 7,000 Csr at 176 (v 172) on the close. Up $490 on the first set, 280 on the second with costs for buying and selling (once complete) to be a touch over 30 dollars.

Almost there. Wed Dec 23

Another solid day has us up 28 points.

I've just about finished storing away about 7 years of old paperwork, I've been cleaning up and reorganising all the files on my computer and I've even been getting rid of old clothes and books. It's happened by accident more than by design but it's nice to clear the decks and I'm excited about trading in 2010 after 2009 has been quite an experimental year.

No new daily trades for me as I'm happy to largely sit on the sidelines but I have started to trade the Spi intraday again and there's been a good little trade this morning.

I'm using the 10 minute chart. I went long 3 contracts at 4713 at about 11.30 am. This was on the break of a small congestion after a new high. I had been looking to short, thinking that the marginal new high could reverse, but there was a flat correction and a breakout indicating a third wave. I sold 2 contracts out at 4732 and 4735 as the rally stalled and left 1 long as I'm expecting a correction followed by a new high. It looks like we're have an a-b-c retracement at the moment.

4.25 The Spi continued sideways, still in a tight range from the low 4720s to the 30s so with a few minutes to go I've sold the last contract out at 4726. Average sale price was 4731 for a gain of 18 points on 3 contracts. At AUD$25 a point, that's 1350 less costs of about $9.

As for my two stock positions from Monday and Tuesday, I'm still long them. Csr was up 3 today and Lgl defied the drop in the gold price to rally 2 to 317, just below my 318 entry.

A quick postscript. In the last few moments the Spi shot up to reach the new high. I thought it would get there but I wasn't sure if it would do it today and given that there was the possibility of a slip back to the breakout thought it best to just get out. Shame though.

Shorters away. Tue Dec 22

The market is up 1% following overnight leads and it doesn't look like we'll get the intraday reversal we had yesterday. Principal traders with the broking houses and hedge funds tend to provide a lot of intraday selling and perhaps they've finally packed up for Christmas.

I've also wound down but I have done a trade today so it may as well be the feature trade.

I've gone long Csr at 172. It had a strong reversal which overlapped recent lows after a 5 wave leg down which started in mid October. I'm long because it then pulled back sharply and has resumed the run. I'm looking for it to head up to the high 180s.

Yesterday's trade in Lihir Gold is down in line with the gold price fall but holding support.

Easing down. Mon Dec 21

It's a very thin pre-Christmas market today and after being chopped around in the whippy markets recently I've decided to focus on admin and study until the new year.

I've been thinking for a while that this blog might be more interesting and easier to follow (and write) if I don't show all my trades but instead focus on my favourite one for the day. A summary of profit and loss might go nicely with this too so in 2010, if not before, the blog will be looking different.

Partly inspired by Electronic Local, one of my links, I'm contemplating doing a little day trading in the Spi. I'll see how it goes. My aim is that this will give me quite a bit of fun and an extra income stream. I also want some modest day trading activity to satisfy the part of me that likes to be busy, allowing me to be relaxed and clear about the stock trading based on daily charts.

My trade of the day is to buy Lihir Gold at 318. I bought the first reversal attempt last week and was forced to stop out on Friday. However, I like the marginal new low after a congestion especially when the overall pattern of higher highs and higher lows is still holding.

In early October and early November there were good rallies after a congestion. On both of those occasions you didn't need to buy on the reversal because a 1-2-3 buy signal was formed. These last two rallies took the stock to new highs but I don't necessarily expect that this time. I do think there can be a quick move to 340 or a little higher if it's a straight reversal. If it forms a slower buy signal then I'll probably hold a little longer ie wait it out through a correction.

If the stock goes to 310 then it's on red alert to stop out. In practise, I'd probably allow it another two or three cents leeway.

Just hanging in. Fri Dec 18

The Xjo index is down 1.1% at 10.53 am which is a slight outperformance I think, given the weakness in European and US markets overnight. If yesterday's performance on the Xjo implied that the rally over the course of this week was over, then today's action suggests that we could be ready to drop towards the bottom of the trading range, just above 4500.The weakness overnight was driven by the US fed confirming a reduction in quantitative easing which encouraged dollar buying and an unwind of the carry trade.

Collateral damage for me this morning is stopping out of Lgl at 312 (v 329) as the dollar strength led to commodity weakness and a $40 drop in the gold price. Conversely, I've cut my All short at 395 (v 390) as their USD earnings have increased in value with the AUD back to .884.

I've also sold the last of my Mgr at 154.5 (v 149), a bit prematurely and sold the balance of Ost at 314 (v 303). This last one was a straight reversal - at least my trade entry was on a reversal - and I almost sold out last night as I'd been long a few days and often that's enough with these. It still looks reasonably bullish though.

11.24 I'm quite excited about the prospect of a trend developing. Speaking to a few traders recently, they've found it hard going in the choppy market and while I had a good November, December has been mildly difficult. I've just had to cut another position, stopped out of my long in Djs at 526 (v 540). So, the tricky trading continues this morning.

12.45 I shorted two stocks on reversals this morning, Awc and Ipl. They're both countertrend trades which I'll probably just hold for a couple of days.

Short Awc at 172...

...and Ipl at 327.5.

1.11 Just sold out Bsl at 281 (v 286). It's another chart that looks ok to me but there's a minor new low today, albeit in a narrow trading range, and the stock could easily grind down towards, say, 270. I got long expecting a second leg up with some decent momentum and that hasn't happened so it's reasonable to get out.
The market is only down 40 points and markets in this time zone are performing quite well generally. However, looking at the Xjo chart (at top of posting), the recent action looks poor. The rally this week was modest and unless a higher low is made here the possibility of continuation down is quite high. With that in mind, I've been quicker to cut my longs than my shorts today.

2.15 Despite the market continuing to rally - down 35 now - I'm still cautious and have cut my half position in Tse at 399 (v 397). I feel like it's forming a pennant and there's a lot of resistance up top if it's to get a move on. I might have got out just in time because it has just slipped to 395.
2.28 It's developing into one of those grin and bear it days. I've just stopped out of the last half of my Aio position at 175 (v 172.5) as it reversed from early weakness this morning thanks to a positive announcement. I waited a while to see if there was anything sustainable about the strength and after a couple of hours it has started to move up again.

3.33 Pretty much on our highs, just off 16. I'm a bit punch drunk at the moment after lots of cutting this week so I don't think I'll put on anything else today.

4.13 The Spi is selling off after the match. I sold out my last long in Gff at 156 (v 155.25). I could have stopped out earlier but it bounced after a minor low. However, as I mentioned earlier, I'm sceptical about the upside so I'm just clearing the decks.

Market down 20 points.

Spi expiry. Thu Dec 17

There was a flat lead overnight but it has been a volatile morning session following the Spi December contract expiry leading to an opening rise of 20 points, a quick 30 point reversal and then a 40 point recovery to leave us up 22 points at 11.45 am.

I'm out of the balance of Cey at 370 (v 336) using the 60 minute chart as a guide because the daily was quite extended.

Gold bounced overnight and Lgl, after a slow start, is up 8 at 331 and looking set for a run.

Aristocrat is a concern, it could be a bearish reversal set up so that I've been long a retracement. I'm ready to cut if necessary although there's not the same bearish momentum as there was and there's been a decent overlap of the late November low.

I've gone long Djs on a bullish reversal after a 5 wave correction following the early November rally. I've bought most of my position at a tad under 540.Otherwise, I've reduced position size here and there, selling some Mgr at 153 (v 149), Ost at 323 (v 303) and buying Aio at 169.5 (v 172.5).

12.05 Decided to err on the side of caution and exit All at 386 (v 385.5). I'm not necessarily expecting a new low and on the upside I could easily get another entry at a better price.

2.23 The intraday volatility has continued and we're up 24 points, having been up 41. I completed the Djs buying at 540 average and have sold a few Aoe at 400 (v 395.5), Gff at 158 (v 155.25) and a couple more Ost at 320.

A second new long position today is Transurban but I've only bought half at 397. It's a double bottom and a move out of a tight 5 or 6 bar range but I'm wary of a move to 405-410 and then failure so I'll keep a close watch on this.

3.17 I've shorted All at 390. As mentioned earlier, there's a bearish resumption after a little 3 wave rally and although the momentum has eased and I'm not necessarily looking for a new low, I think there's enough room for a small trade.

3.45 I've sold the rest of the Arrow Energy at 398 (v 395.5). This one never really took off. I've got a general rule with countertrend or trading range type reversals that if it's looking mediocre after a couple of days then I'll just get out. Here's the chart. A modest little rally and a slightly weak day today.

I've also sold more Mgr at 154.5 (v 149). I've only got a third of the position left and I'll look to sell that tomorrow. Yesterday was a small reversal day and we've got new highs today but it has done well enough to leave a few for the morning.

The market has reversed again and is down 7 points.

4.17 It was a mad day and another swing took us to an 8 point gain. Here's an intraday Xjo chart.

I'm cautious overall now as the daily Xjo reversal looks shaky now. I've been reducing position size mainly and sold a few more Gff at 154.5 and bought a few Aio at 168. I missed the chance to complete Tse, I'll wait till tomorrow to decide.

A degree of consistency. Wed Dec 16

I was late in this morning but pretty confident that we would rally after early weakness following a negative overnight lead because the reversal in the Xjo chart was mirrored in a lot of individual stock charts and the recent underperformance would give some momentum to any buying.
It's approaching 11.30 am and we are indeed up 14 points and 30 points above a briefly weaker open. Most of my positions are performing quite well with Cey up 9 at 362 and Aoe up 9 at 402 being the standouts.
I closed out the last of the Ozl short position at 115 (v 118).

11.40 I'm long a number of stocks on bullish reversal set ups but there are a couple of trades I missed which have performed well and it might be instructive to check them out.

The first obvious one is Alumina. I covered this a couple of days ago but it's interesting to see how well it has gone.

I was so busy trying to eke a few more cents out of the remnants of a short position that I didn't see the potential set up on the fourth bar back. It still would have been a marginal one to take but a good example of not wanting a perfect elliott wave count before taking a position. For example, you could interpret the turning point 4 to 6 bars back as a failed 5th wave low and a reversal.

The next one is Csr where I was debating taking a position but was cautious that momentum seemed too strong on the downside still. Not the worst logic but the opportunity to get long at about 165 with a stop at 160 versus a target in the high 170's meant that the risk/reward was roughly 2 to 1 in my favour and a reasonable trade.

12.14 Took a little profit, sold a couple of Cey at 365 (v 336), Mgr at 153 (v 149) and Ost at 318 (v 303).

2.04 The early enthusiasm has worn off and we're now down 8 points in quiet trading. I'm finally having some joy in Asciano which I've been short for a while. It's down at 171, although I stretched my stop a little as it made a couple of marginal new highs after my initial short.

3.39 Just sold out a couple of Aoe at 400 (v 395.5) and All at 402 (v 385.5). To my chagrin, two shorts which I cut yesterday, Cgf and Sgp, have weakened again today so I was clearly too knee jerk in my response and perhaps influenced by my bullishness.

4.15 The closing figure was a drop of 12 points. No new trades today, I just closed out odds and ends. So, sold out a couple more Cey at 361 (v 336) and bought a few Aio at 171 (v 172.5). I'm still expecting a squeeze up for Christmas.

Mood swing. Tue Dec 15

A reasonable overnight lead yet again and finally the local market is moving out of the doldrums. The market is still in a trading range but it's another higher low towards the bottom of the range and after a sequence of weak performances it seems like the only way to go is up - in the short term. I was stopped out of my Sgp short at 399 (v 388) and I'm disappointed I took the trade as it was marginal. Also in the property sector, I re-entered my long position in Mgr at 149 as it finally starts to take off. A lack of patience has cost me a few cents here but now that it's showing signs of life I'm hopeful of a move towards 160.

As anticipated last night, I got confirmation of buy signals in Aoe, Bsl and Lgl and have taken them all on simple reversals.

Here's Aoe, long at 396.Bsl, long at 286........and Lgl, long at 329. Actually, this is more of a tight 1-2-3 buy signal after a double bottom while in Bsl, I'm pre-empting a breakout after an a-b-c pullback following a wave 1.

11.26 The market is holding the gains, up 26 points. I'm about to head off for a few hours and there's one more stock that's setting up for a buy, Goodman Fielder. It just has, in fact, with sales at 156.5. I've bought a half position and I'll see if I can buy the rest when I get back.

3.49 Before I left I closed out my short in Cgf at 408 (v 399). The breakdown seemed to fail quickly so I thought it best to use a tight stop. I completed buying Gff at 154 on a pullback to average 155.25. On the plus side, my longs are all performing well with Cey up 13, Ost up 10 and Mgr at 151.5 while the shorts are flat to down.

4.14 The final figure is up 19. I sold out a few Cey at 353 (v 336) on the close and bought back half of the Ozl at 116 (v 118) as it was a new low after a retracement against me.

Spluttering to the line. Mon Dec 14

Another mildly positive night on European and US markets had left the road clear for us to undo some of our recent underperformance but the Xjo is lacking the firepower to rally at the moment. We're down 6 points at 11.21 am with the mixed signals continuing.
I closed out the last of my short position in Awc at 165.5 (v 165.25) as it spiked on the open. I've been hanging on for a minor new low and had actually been wondering whether I should close out since the risk/reward (I was only looking for a few more cents on the downside) was no longer in my favour and momentum had stalled. Although I could have done better here, I can learn from this one. I was looking for a 5th wave low but after a certain amount of time it's probably reasonable to assume that I'm either not going to see one or that the risk/reward equation is no longer in my favour.

11.33 Out of the last few of my Gff short at 154.5 (v 159.5). The rally a couple of weeks ago looks to me like the start of a bigger move, even if it's just a second similar rally. The short position was fairly opportunist, looking for a pullback to the starting point which is why I didn't put on a full position because I would have had to chase it down to get set. I'm happy to wait and see now and I'm hoping for a bullish set up.

12.10 Closed out the last of the short in Fxj at 164 (v 160). A little unlucky here, just missed buying it on the back foot at 160 and 161 this morning. Fairfax is an optional sort of buy here having made a higher low and pushed through Friday's high after grinding down for 6 days. I'm not enthusiastic though because my stop would be at 155 initially and it's in a trading range so I'm not convinced there's a lot of upside in the short term.

12.26 I closed out a long position in Mirvac Group at 146 (v 144.5) because I've been in it for 5 days, expecting an acceleration but instead it has chopped upwards a few cents. I felt uneasy about it because it looks more like a retracement so I figured that I'd given it enough time and would get out. Here's the chart.

12.51 The steels stocks are favoured by most analysts and are trading well below - about 30% - the average of analyst targets according to FNArena. I'm long a part position at 303 in Onesteel and I'm on the bid for the rest.

2.00 I closed out the last of the Tse short at 387 (v 399) as it continues to hold above 380. Ost is complete at 303. I've gone short Stockland Group at 388 on a bearish continuation, with the stock breaking Friday's low of 388 after a short retracement.

3.54 The market has had an afternoon recovery, rallying from a loss of 26 points to be up 8 now. The other steel stock, Bsl, is almost a buy now. My problem position is Fortescue. I realised that I'd chased this down too far when I shorted it so having acted in haste, I'm now repenting at leisure with the rational place for the stop at 444.

4.11 We finished on the highs with an index gain of 19 points. Another wishy washy day for me with a few going my way and a few against me. I might get buy signals in Aoe, Bsl and Lgl tomorrow.

Flotsam and jetsam. Fri Dec 11

US and European markets were firm last night on minimal pre Christmas volume. At 11.45 am, stocks are bobbing around as the market flows back up 27 points after ebbing lower yesterday. The Xjo chart has been characterised by reversals lately and there's the possibility of a swing up over the next few days as the selling has lost momentum. A break of yesterday's high would be interesting. Despite the rally back in US markets over the last couple of days, I think that they'll probably make a lower high and sell off again so I'm not completely sold on the idea that we're due a broad rally. I've bought Aristocrat Leisure at 386 this morning on a reversal pattern. It's been a slow grind down on the back of US earnings disappointment and subsequent downgrades along with continuing strength in the AUD. Despite the downgrades, it's now well below most analyst valuations and with more optimism lately about the US economy and a USD rebound some of the headwinds could be about to ease.

There's a fairly clear 5 wave pattern on the daily chart so it's a question of whether the 5th wave is complete and the stock is ready for a retracement. There was one false dawn about 2 weeks back. I've bought most of my position at an average price of 386.

Other than that, I've bought a few Gff at 156 (v 159.5) and a couple more Tse at 387 (v 399).

1.57 I've bought back two thirds of my short in Fxj at 159 (v 160) as it's in a trading range still and I don't think there's a lot of momentum for further falls. Given the trading range, the better trade would have been the reversal 6 bars back with an entry around 167.

3.18 Short Cgf now at 401. It made a double top recently and is forming a sell signal with the clear break point at 400.

4.05 Leading into the match the market looks like closing on its highs. My new short position in Cgf traded down to 399 confirming the break but has blipped back up with the market firming. I bought a few more Gff at 154.5 (v 159.5) and Tse at 384 (v 399). Aio is close to a cut but I want to wait till Monday with this.

Push me - pull you. Thu Dec 10

The European indices were pulled down again on more credit concerns, this time about Spain's sovereign debt. Meanwhile the US markets pushed up after the European close on renewed optimism about an upswing in their domestic economy. It's only half an hour into trading and we haven't made up our mind which way we're going with the market having been up and down in a tight range and down 4 points at present.

On a technical level the Spi and the Xjo made a minor new high compared to yesterday, further closing the gap to the break below Monday and Tuesday's low. It suggests to me that after our relatively good performance yesterday we might drift off today.

11.40 Unemployment at a better than expected 5.7% has given the market a little lift and we're up 10. The AUD has also spiked three quarters of a cent. I've bought back my Djs short at 541 (v 561.5) and the second short in Awc at 155 (v 157.5). Asciano is close to a cut and Lgl is not far from a reversal buy.

2.58 I've spent a fair while out of the office today but I'm pleased to see that the market has eased back and is now down 24 points. A couple of hours ago I went long Centennial Coal on a reversal at 336. It's not the clearest chart around having just fallen from a lower high, but equally, it's a higher low and a reasonable rebound can take it to 345-450 quite quickly.

My other trade was a small short in Goodman Fielder at 159.5, as the rally petered out. I'm trying to complete the position with a further sale at 158.5 but so far I haven't got set.
4.15 A small rally in the last half hour left the Xjo index down 31 points. I've left most positions unchanged, 2 longs and 7 shorts. I bought back a third of my short Tse position at 389 (v 399). In the last 10 minutes, I've read 3 different technical opinions, all of them urging caution. Daniel Goulding and "Charlie Chartchecker" are quoted on FNArena and David Rogers, the Dow Jones news wires technical analyst is the third.

Greek tragedy. Wed Dec 9

The downgrade of Greece's sovereign debt was enough encouragement for European markets to topple over last night by around 1.5%. The US markets dropped by 1% and after an hour and twenty minutes the Australian market has settled somewhere in the middle with a fall of 1.4%.
It has been a non trending period for most markets as bullish momentum has ceased and been replaced with range trading. My opinion has been that we were very close to a top and in Australia had probably seen it. For the sake of my trading I'd like to see a downtrend set in, a retracement of the rally since March. I think that will probably develop but until then what we're getting instead is a lot of reversals with little follow through. This has led me into the room of mirrors to think about strategy and my conclusion is to take the reversals as early as possible and get out quick. If a stock is in a genuine trend then I'll try to run a position for longer, as I've been doing in Awc, but otherwise it's guerilla stuff.

The first of my 3 short trades this morning is Asciano, fitting the bill of reversal trades. I'm short at 172.5 as we've ticked below yesterday's low. My read on this is that the last surge up was a 5th wave which made a small new high at 176.5. In the short term it ran dropped and surged again yesterday with no follow through. It's a risky trade as it's a counter trend reversal but on the plus side these usually move fairly quickly. My stop is at 177 and I think a reasonable short term reversal would see it back into the 160-164 range.

Fortescue had the surge to a new high and made a one day reversal on Monday. It just about held up yesterday but is slipping below yesterday's range. I've shorted at 413.5 average with the Monday low having been 417. Like Aio, it's not exactly dumping and seems quite well bid, so I'm a bit nervous but then again, the whole market gapped down and was always going to consolidate for an hour or two. The late afternoon will probably be the acid test for these reversals.

The last short is in OZ minerals. This one has been throwing dummies for a little while and had me grasping at thin air. I'm hoping I've nailed it today on a minor 1-2-3 sell signal which is tight enough to take even though the stock is in a trading range. I've sold half at 118.5 and expected it to rally a little but unlike the other stocks, it's not looking good intraday and has fallen through last week's low, giving a second sell signal and the suggestion that this fall could extend further than the simple reversals. Just sold the second half of my order at 117.5 to average 118.

1.41 The rally from early lows has been quite strong and we're now down only 35 points or 0.7%. Fortescue has rallied against my short to 420 and I'm having misgivings about having put this on quite so far from the recent high at 444.

3.48 Nearing the close, there's a strong possibility of the Xjo finishing on its highs and closing more of the gap formed by the opening drop. It's been one of those days that calls for patience if you're short.

I've mentioned that I've been looking at ways to improve my performance. One of those is to take off positions in part or in full at obvious points. For example, I'm short Tse after it broke support, rallied back to the break down and then started to fall again. There's no real downtrend apparent yet and I've worked out that until you get one, especially with reversals, two or three days is often the optimum holding period. In this case, it hit support early at 381 and bounced rapidly so that now it's up 3 at 394. I missed the chance to buy half back in the low 380s. Next time I'll mentally prepare as you sometimes get a small window of opportunity and need to be ready.

4.17 The market didn't quite fill the gap but closed near the top of the range. I've shorted Fairfax at 160 on the match out. It's been in a trading range for a little while since peaking in early October and, like many stocks such as Tse above, it has the look of a head and shoulders topping formation without having broken down convincingly. I've used a small 1-2-3 sell signal as my entry point and because it's still in a range I'm going to use a fairly tight stop with this one.

I bought back a couple of Djs today at 544 (v 561.5). Again, it's in a trading range so it's more a judgement call as to when to buy rather than in a clear trend when the ideal is to run the position for as long as possible. Otherwise most of my positions finished respectably with Fmg peeling back to 414 by the end.