More of the same, with a fiscally conservative government elected in Spain but an acknowledgement that the mess will take years to clean up, the market has slid away after some buying early. It's fairly tame so far, just 25 points, but the cracks are appearing. The Chinese Premier was talking about a long recession globally and US overnight futures are weak after a terrorist plot was discovered. The intraday low for the Asx 200 is 4140.4 and that's a point under the low reached on November 2. If the recovery is over, and I think it is, then the likelihood is for new lows in the next month or so.
I have one long position in KAR. The chart is fairly stretched and I'm assuming I'll end up stopping out but the 500 support level has held. My short positions are all lower but nothing fantastic. OST is the best, down 3 to 93.5 as the company discusses the possibility of closing down its loss making steel production. I have an order to buy back half of my short at 93 (v 99.5) on a target. It's very close to support and the trend is long in the tooth so I want to take some off because of the possibility of a short covering rally.
ALL has had me cutting a short position and then a long in the last week – an occupational hazard in this sort of market – but a weak close would be bearish. IAU is also on the bearish radar with the chance of a short term peak having been made.
3.45 It's getting towards the end of the day and it's mostly been a bit rubbish for me. OST is ok, I bought back half at 93 and the chairman's address which came out around 2.30 pm, has helped the stock to hold. But FMG keeps finding support and is up 5 to 490. I'm close to stopping out but I think it would be smarter to use a break of today's high as a stop. KAR is just above my stop and the other two shorts are flat.
Otherwise, I'd like to be shorting LYC which is fading after a slow, anaemic retracement but the company is waiting on a Malaysian government decision which is quite binary. It's either very good or very bad. So I've decided to leave it alone. I'm using ALK as a proxy. It's in a similar sector and also charting weakly. It was a short on Friday but I think it's reasonable to chase the entry.
4.11 I shorted some ALK at 108.5 and ALL at 235. I chopped KAR at 500, pre-empting my 499 signal, which was a mistake in the short term because the stock held and closed at 502. I went long SEK at 605. I'm not convinced that it will push to a new high but it's still making higher lows and there's a fairly tight stop at 590.
The market closed down 14 points which was solidly off the lows in a lacklustre day's trading.
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