Doing ok

Yesterday I filled in a compulsory workers compensation insurance form and there was a question along the lines of "does your business manufacture products or provide services?". With a business like mine, the answer is a resounding no. It's almost completely pointless except in a secondary way of helping to provide liquidity to capital markets. I'm ok with that, though.

What I'm less ok with is allowing myself to do well and to enjoy my success. Unfortunately, my family was dysfunctional along fairly common lines where one sibling was pitted against the others and any success was bittersweet as my older brother or sister would be chided for their relative failure. Along with that, when parental approval is dependent on you doing well, you do well but you resent that the affection is so contingent.

I worked most of this out as a teenager, 30 years ago, and yet the implications still unfold and my solution has always been to push the boundaries of what I allow myself to achieve or enjoy without actually managing to change the pattern. For the last 7 or 8 years, my body has become so tense that I've been unable to run properly which is tough for someone who loves sport. I used to think it was to do with the 3 knee operations I've had but I've finally realised that the tension was always there and that tension was probably what made me vulnerable to knee injuries while playing soccer.

In the last 12 months I've been meditating regularly and have found that the tension is really easing so that my movement is getting better all the time. I'm learning that I can give myself permission to focus on what I enjoy and not worry that I'm hurting someone else. In trading terms, I'm moving towards doing what I've wanted to do for years, extending my trading time frame so that I'll have more time to stay fit, to travel, to read, to relax. Another step is to take out the points of tension in my trading; one of those might be to stop trying to pick turning points and to limit my trades to those I'm very confident about and not feel obliged to do "busy work" trades.

Market wise, the performance so far is positive, a loss of 33 points after the US could not hold early gains and European markets were lower, especially Germany and France. The rate decision is due today though and it could surprise with a hard line RBA raising rates. I'm now expecting that lower low, which could be another 50 points down but I'm hoping for a higher low and another leg up.

Charts of the major European and US indices show clear failure now so I don't expect help from a rising tide. However, we have underperformed for some time and it may be that a topping out in those markets and the upcoming reporting season will see a renewed focus on value in Australia. Weak PMI data everywhere doesn't help though!

Here's the weekly chart for the German index.

And for the US...no sell signal yet but a probable lower high and weaker days ahead.

The weekly chart for the Asx 200 looks much better. Yes, there's a downtrend but with fading momentum and it's sitting in the lower half of a long term trading range.

12.38 The resilience was short lived and the market is down 59 at 4439 with Friday's low of 4421 close at hand. I have more option positions than usual because I want to limit my downside in this market which is driven by global macro rather than stock specific issues. Increasingly I'm accepting that it's a storm to be weathered before calmer trading conditions arise. I'm in front for the first 4 or 5 weeks of this financial year which is pretty good in context.

2.12 No change, down 60, with the market on hold until 2.30 when the RBA announces its rate decision.

2.31 Some verbal sabre rattling but no rate rise.

2.38 The initial reaction is extremely cautious with a 3 or 4 point rally. I would like to see another low in this downswing in order to get a better base for a rally. If the 4421 level holds today then I'd expect it to fail on Wednesday or Thursday. Here's the 60 minute chart of the Asx 200.

4.07 I got the big question wrong yesterday – stick or cut – and I stuck. I'm actually mildly bearish now but willing to hold overnight because reporting season starts in earnest with the RIO result on Thursday and in a market driven by fear, some facts are likely to be a positive. I'm not necessarily anticipating a spectacular reporting season, just one that highlights value and is not as bad as feared.

The market has just closed with a drop of 64 to 4434. PBG did well today, it slipped a cent to 68 but was well bid all day in a falling market, holding most of yesterday's gains. Kathmandu, a retailer of outdoor gear, had a good day which might have helped.