And meanwhile, I'm still thinking..

In some quarters, yesterday's sell off was painted as concern about the S&P ratings downgrade but I think that the market was due a pull back and the overnight lack of concern about the ratings agencies was fairly predictable. I still put on a few shorts, somewhat against my better judgement, but the wash up is not too bad so far. It's 2.23 pm and the market is up 30 points, coming back from an early surge and then a second attempt to rally hard with the high for the day being a jump of 54.

I'm feeling my way with my new approach of trying to initiate trades on the close. First of all, I wanted to stop out on the signal but then thought that maybe I should wait until the close. Yesterday was one of those days when I was confident that the market would sell off all day but I felt that my hands were tied thanks to my plan of waiting till 4.10 pm. It's reasonable to expect that it's a situation which could easily go my way on other occasions but, nevertheless, I feel like I can do better with my stops.

So today, I've stopped out of BLD at 378. My trailing stop was triggered with a sale at 376 after some minor initial buying was overwhelmed with selling. I thought there could be a little retracement and I decided to try 381. It quickly became apparent that the buying was minimal so I hit the bid at 378. The stock is now 371 so this looks like being a win for a more active stop out. It's been a good trade. I bought at 350 and sold half on a target at 376 and didn't want to watch passively as that good work was undone.

The flip side was in PRU where it triggered a trailing stop at 307 and I sold out at 310. The stock has now recovered to be up 5 at 315. I'm not unhappy here since I got in at 284 and sold out half at 303. It has been consolidating for a few days but is supported by its forthcoming inclusion into the Asx 100 index.

I got a bit carried away then and sold out of SEK and KAR too. There was a reasonable logic to both but I'm not sure whether it's the thin end of the wedge in terms of me beginning to override my plan. With SEK, I decided that I certainly could have stopped out yesterday. At the time, it was reasonable to decide that the momentum was enough to stretch the stop but then I thought that if I do this for every trade then I lose the advantage of stopping out on the close. That is, if I stop out when it closes below the trigger but ignore the signal when it closes back above, then I always lose out. Anyway, today there was no great momentum considering the bounce back so I got out at 612. It was a bit of a panicky exit and I should have got 616, at least, but the general vibe was right and it's now down at 605.

The last exit was in KAR where I sold out my last half at 524. This was a bright and breezy trade which went well despite my getting in quite late after a gap up to 494. That was actually part of the reason for selling out on an assumption rather than letting the market take me out. My logic was that the previous swing low had overlapped and this meant this rally was unlikely to push on to new highs. Anything close to 530 would be a good exit and the stock got as far as 527 before sellers started to dominate.

I was tempted to find an excuse to sell out of my last long in AWC but thought that I should try and respect my plan in at least one stock. I expected the short positions to give me a bit of aggravation initially after I put them on and that happened but they're fine now with the exception of the one position that I was confident about...IPL.

I'm still reasonably happy with the short position but it briefly hit my stop at 325 and I decided that since I'm confident of further weakness, I'll use the obvious retracement high of 331 to set a stop at 332-333. There was plenty of buying earlier but it has finally edged down to 321, a rise of 7.

4.16 There was a minor blip up on the match leaving a rise of 30 points to 4292. I added another short in DJS at the match price of 284 with a stop at 298.

Oh, and a quick run down of the earlier exits. BLD closed at 373, I sold at 378. KAR, closed at 515 v 524 exit. PRU 313 v 310 exit. SEK 606 v 612 sale. Better in 3 out of 4.