Remission

The patient is in remission with a late rally helping the DJIA to avoid 9 straight losing days which would have been the first time since 1978. The Aussie market fell a dozen points from a slightly firmer open but is having another go at a rally and this attempt looks better. Up 10 at 10.47 am.

I've been thinking about my struggles over the last couple of months and while the market has been tricky there have been plenty of opportunities. I was mulling things over and it seems to me that I have real trouble accepting loss. My father died when I was 2 years old after a long illness and I don't think I was ever able to move through the stages of grief; I was too young, the home environment was pretty bad and my mother still hasn't accepted the loss so there was no serious working through of issues going on. Human nature is such that financial losses will provoke the same sort of reaction as physical losses and when I look at the cycle of shock and denial, pain and guilt, anger and bargaining and then depression before recovery and acceptance, I see that I'm often stuck in one of the early stages for far too long.

My trading solution has been to find entry points with really close cuts so that the loss is emotionally manageable but even with this quite effective work around, I still have real trouble with stops. So much so that I realise that recently I've moved away from this approach, probably because there were just too many stops to deal with. Now, I know that everyone hates to take a loss but I've been trading for 20 years and I genuinely understand how important it is to respect stops and have plenty of experience of making good money because of that practice. Yet, I still freeze up.

So my life solution is to learn acceptance and for me, the best approach is simply to go within, to breathe and to be aware. I want to melt that frozen body and mind so that I become fluid. It's happening for me but it's been such a slow process.

Anyway, it's 11.21 now and the Asx 200 is higher again. I bought some AGO at 408 when the market looked ready to turn and I'm happy enough with the trade; it's a strong stock, it has gained a few cents to 411 and it's through yesterday's high but it's another example of having moved away from my disciplines. I was expecting the stock to hold support in the mid 390s but yesterday morning when I had a plan and a chance to buy at 396 or 397, I couldn't pull the trigger and now I'm chasing it. That sort of thing, multiplied across all the trades you do, makes a big difference.

1.09 The index couldn't hold the gains as the big four banks are sliding. Down 12 now at 4321.

2.17 Out of the last ALL at 239. Sold a few in the high 240s so about breakeven on the trade.

2.57 The Asx 200 is down 34 now despite mild strength in US overnight futures and a flat Chinese market. It's a nice, clean downtrend so it's a shame I'm not on board.

RIO reports at about 4.30 pm, after the Australian market close and before the UK open. Investors are clearly concerned about costs – the company has been talking down the result – and the March lows are 11 cents away. But it's still cheap as chips and it's not the end of the cycle.

3.52 Out of AGO for square. The market is down 52 so AGO did alright to hold up. I might get another go in the 390s. It seems like all support for the market is gone now. The weekly chart is below and obviously there's support around 4200 vs 4280 now but psychologically, the market seems broken.

In Australia, it's a very different situation to 2008 when a lot of companies and individuals were extremely stretched and had to dump everything so we are clearly building in serious deterioration in overseas markets.

4.11 We closed on the lows, down 56. I'm now planning to short rallies since it's a clear trend rather than the choppy reversing action we had a week or two back. However, it would have to be a decent rally...the market can rally above 4400 without breaking the downtrend.