Wednesday, August 24, 2011

Almost there

There was a strong rally on Wall Street, although it was on light volume, but it has helped the Asx 200 to kick again this morning. I'm about even though as SBM has fallen with the gold price to counteract a rise in LYC. SBM has reported and while the result is perhaps a shade disappointing, it confirms that the P/E for this year is about 11 with estimates of about 5 for next year. Next year's profit is obviously not easy to predict with some saying that gold has had a blow off top and others that the price is headed for USD 2500. That's not my concern for now, I'm simply trying to decide whether to hold for one more night as tomorrow is my last trading day before a break. The spot gold chart shows that the pullback wiped out a couple of days of gains but hasn't overlapped the previous swing high which means that it remains in a fast, clean trend.

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I was actually unconcerned about the gold price because local stocks hadn't been responding to it in any significant way but there's certainly been some selling across the sector this morning. As for the SBM chart, the price is above the swing low at 189 from last Monday so probably a hold.

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11.42 I had another go at MSB this morning after it moved convincingly away from the 715 level. Bought at 740 on a 10 minute push and just sold at 766.

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11.51 Asian markets are down and the move up is just 17 points.

12.26 Japanese debt was downgraded and while not unexpected, it seems to have affected morale across the region. The market is square now which shows how little conviction there is in the moves.

2.29 Regional markets are recovering which has helped to push up back into positive territory. LYC has done very little, I missed the best price at the open but was expecting more, especially with US listed rare earth stock, Molycorp, up by nearly 6% overnight.

3.31 A rally attempt which saw us up 27 points has been chopped off again with the Japanese market slipping back down. I'm very keen to get out of my last couple of positions since I don't want to be trading up until the hour of departure which means I might just cut the SBM, trading at 192, 193.

3.56 Out of LYC for about 170 and SBM at 193 to finish up. I realise that this week has been a waste of time for me, I'm too distracted for intraday stuff, the market is too skittish for much overnight position taking and time is running short for that anyway. No financial harm done, but could have done myself a favour and had a rest.

4.10 It was another rollercoaster day with the Asx 200 finishing down 6 points. BHP has just reported and recovered a little to close unchanged.

More in October!

Tuesday, August 23, 2011

Waiting for the other shoe

I've packed up before my trip with the exception of a long in St Barbara. It's up at 198.5 which is only a tick above yesterday's buy price so the underperformance vis a vis the gold price is continuing. The chart looks plausible and might burst through 200, hopefully today.

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The US market traded erratically and closed up a touch. It's all a waiting game until news from Bernanke on possible QE3 measures. The Asx 200 has climbed from a flat start to a rise of 46 points, at 10.54 am, but it's on light volume and yesterday we saw the same thing, only for a reversal to come through. I'd say that the move will be largely sustained today but in the medium term it looks like a correction. Here's the daily.

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There may be some sort of second attempt at 4300 but after that I'd expect to see another drive down towards the recent low. It might not hit the extreme below 3800 but somewhere in the ballpark. I feel like I'm going to be missing a decent buying opportunity in a couple of weeks but then I realise that there were some fabulous shorting opportunities that I missed in the last few weeks so it's more to do with being fresh and alert. Having said that, if I notice a nice set up, I might buy a couple of things while I'm away!

1.01 The market is up 72 now. I've bought LYC and MSB on an intraday basis, looking for a higher low and an afternoon leg up. They've both sold off from early strength but with the failure of the market to sell off broadly, they might have another pop. If not, I'm out.

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MSB

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1.56 My long positions are a stretch because with the market already up 70 odd points, it's asking a lot for it to go again. I thought I might have to dump them, but they're finding support now. Just about everything in my watchlist is moving helped by figures showing that the Chinese economy is stabilising.

3.46 No luck with the longs, out of MSB for a 3 cent loss at 718 and thinking of holding the small long in LYC because I quite like the market set up for tomorrow. SBM is going nowhere, needs to get through some selling around 198-200.

I was close to buying FMG at 563 earlier and that one has run so my stock selection is off.

Here's the Asx 200 30 minute chart. Forming a base intraday and making a break as we move into the close.

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4.11 There was a lift at the match which took the index to a rise of 91 points and set fair for some continuation tomorrow. I sold a handful of LYC at 171.5 and SBM at 199.

Monday, August 22, 2011

Looking for a lift

The US and European indices duly fell but the Australian overnight futures contract actually rose a few points and that has been an accurate proxy for sentiment here. There was an early lift of a few points, a 30 point dip and now a more solid attempt to rally with the market almost square. I got out of my 2 minor short positions slightly too early, buying NAB at 2236 and TOL at 425. I have a couple of intraday longs but nothing to write home about. I'm still trading carefully with a long holiday coming up very soon now.

The Asx 200 chart is below. I don't think it's a higher low but there's every reason to expect some bargain hunting with reporting season in full swing and the results broadly positive.

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11.28 The rally has been quite sharp with the index now up 24 points. I've bought gold stock, SBM, at 198, on a minor break and I might hold this one for a day or two. The local gold stocks have really underperformed the physical lately so there's a buffer.

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12.25 A pause here after a strong rally. The market sits 52 points higher at 4154. I've had a reasonably good time with my intraday longs and I'm left with SBM to hold overnight. I'm off soon to do some last minute chores.

3.04 SBM is at 197.5 as the market reversed direction, down 4 now. Gold is up USD 25 in Asian trading.

4.11 A very scatty day with the index closing down 20 points.

Friday, August 19, 2011

Reluctant followers

The local market has followed overseas leads to be down 111 points after 41 minutes but there's not much going on really. There are buyers around at these lower levels and although the index chart indicates further to go over the next few days, there's probably not too much more to go this morning.

Here's the Asx 200 chart.

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My short positions have gone alright but a couple of the positions (FMG, OSH) that I closed out yesterday or shorted intraday would have been better. I've bought back the QAN at 152.5, some DJS at 276 and TOL at 433. I also had a few puts in NAB, Aug 2400 strike, that I sold out at 150. I've bought some AWC, IPL and OSH as intraday longs because they've been pretty hard hit and shorted a few WSA because it hasn't.

11.38 The index is a little worse, down 2.9%, but sitting above the opening low. The usual pattern is for a low to be set at around 12.30 pm. I've been jumping in and out of positions but I'm broadly looking at trading an intraday bounce. It's neither here nor there at the moment.

11.53 Lost patience with DJS and closed it out at 275.5 average. The index is firming now as the HSI is only down about 2.5%. The search for yield is increasing as for the first time in decades, stock yields are higher than cash rates in more than just the odd dying or boring stock. It's making for a confused market because there are compelling valuation arguments in the resource sector.

12.46 Unusually, the index hasn't made a minor new low. The 10 minute chart, below, shows quite a narrow trading range. I'm easing out of both longs and shorts and will probably leave myself pretty flat going into the weekend. (Just noticed it's not there, inserted this at 1.44 pm).

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1.36 It's fairly dull stuff and I'm out of most positions now. The overnight obviously favours the downside and I might reinstate some shorts if anything interesting pops up. It's such a strange market though. For example, Boart Longyear announced their half yearly result making USD 74 million compared to expectations of 64 mill, I believe, and upgraded second half estimates by 9%. The stock is trading on a 2011 P/E of about 11 with earnings expected to grow in FY12, taking that P/E to about 9. If those figures are reasonable, and today's result would tend to confirm that, one would expect the world to be pulling out of recession and results to be improving further in the following year or two. But the chart looks poor as the overriding theme of decrepit public finances in Europe and North America taints sentiment.

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3.37 Moving into the close, the index has finally capitulated and is down 145 points now. I had no positions but have reinstated a short in NAB at 2252. It's well past the short term break at 2300 but momentum is to the downside.

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On a shorter time scale, it sat in a narrow range for most of the day and is now fading.

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3.47 I also re-shorted TOL at 430. I'd bought back the last of them at that level, thinking we could have an intraday bounce. It didn't amount to much but despite that, the stock has been a relative outperformer today and the risk/reward still favours the downside in a weak market with a stop around 455 and a recent low of 370. Here's the 30 minute chart.

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4.07 The market is just about to close for the day. While there's a bit of a 5 wave look about the 10 minute chart, I'm doubtful that there'll be much of a rally on Monday. If there is, it's probably one where I'll be looking to put on a couple more short positions. On the flipside, if there's another crunch on Monday, it's likely that the open will be the worst. There are plenty of buyers locally, only held back by international conditions. The irony is that it's the institutions who have been selling against the prospect of redemptions which are yet to materialise. The last two days must have them breathing a sigh of relief because they would have had to rush in and buy if we'd seen a V bottom.

The index closed down 149, NAB finished at 2240 and TOL at 427.

Thursday, August 18, 2011

Effective target

I've been thinking some more about the targets I've recently set for myself and while I'm happy with them and I think they're going to give me something to shoot for, they're the outcome and the process is more interesting. To backtrack, about 18 months ago I realised that an effective approach would be to buy (or sell) at levels where my stop was close by and the risk/reward was good. This is in contrast to chasing buy or sell signals, instead I might wait for a pullback after a buy or look for something which could be a higher low and would form up into a breakout. I've drifted away from that slightly, to my cost, maybe because I felt I was using this as a crutch to cover up my difficulties with stopping out. I think I was getting a bit hard core there because although it doesn't necessarily resolve issues around loss, it doesn't hurt either and it does work.
There's another element that I've been puzzling over and that's how to build in "feel" or flow. I'm getting a sense that I don't need to build it in, I just need to get out of the way. I'm too busy fretting about what I want to happen and how to make it happen, that I don't leave well enough alone. Anyway, I'll see how that goes.
The market has had a strange opening period. There was some kind of large buy portfolio which provided an early lift but once that was soaked up, the market fell. It's having a minor recovery and is down 31 at 11.22 am.
FMG is back to 618 and I've bought a few back at 614. DJS was bid up on the portfolio and hasn't come back. I jobbed some stock to make a few dollars but the overnight position (fairly small) has gone against me. I was reluctant to take it off on what seemed like thin volume so I'm still in. Next stop is around 294.
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2.15 The index is 1% lower and it looks increasingly like the retracement has topped out. Here's the Asx 200 daily.
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Down 51, a minute or two later, I've been shorting stocks intraday and looking to buy back and that's going ok. Even DJS is easing but still up 7 on the day.

3.29 For some reason, Windows live writer is playing up with downloading charts so maybe the old Blogger software will work. I've put on an overnight short in TOL at 446. The stock has been way up to resistance and I'm looking for a pullback to about 410-420.
3.58 Out of the FMG short at 606.

4.09 I was a bit dopey today. The activity in the morning was probably due to the August option expiry for the Asx 200 contract and DJS has a new substantial shareholder, a US fund, which helped turn sentiment around there. The stock wound back though and finished at 283 after touching 291 earlier. I still have the small short there around 276 but picked up some money today jobbing stock. TOL closed at 442 and I shorted QAN on the close at 156. It looks like a pennant correction with the announcement of an Asian offshoot unable to provide much support. It touched 159.5 early but couldn't go on, my stop is at 162.

The index closed near the bottom of the range at 4251, down 53. It also broke yesterday's low.

Wednesday, August 17, 2011

Bobbing around

An hour into trade and the Asx 200 is 30 points higher as some buying in the banks provides a lift. Reporting season has been ok and there's a certain amount of yield driven activity.

I've shorted a couple of things into the early strength. I've sold a few FMG at 617 as the stock touched yesterday's high of 619.

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The other short is in DJS at 274. I'm hoping that this is making a pennant correction and I'm looking for this morning's minor upswing to fade as has happened over the last few days.

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11.56 It's a mixed picture with the HSI up, Japan down, greater China flat to down and Australia up. I expect more chop this afternoon with yesterday probably marking the short term peak of the bounce and today simply a correction of the pullback from yesterday with a battle between buyers and sellers.

12.41 Wage pressure is lessening and that has helped the market to kick up towards 4300 again. The AUD has held its own and the market is at 4291. I was looking for a rally to a lower high but that's looking less likely now. Here's the Asx 200 60 minute chart.

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1.21 4300 was not a stumbling block and the intraday high, about now, is at 4311. It's a rise of 1.5%.

2.45 It was premature to start looking to short the strength. The market has just been to 4322, up 75, and I've been scrambling with my shorts. I'm mostly holding for the moment because the wave count looks quite full but I'm getting fed up with this business of fighting the market. I've been doing it for a while now and it's getting on my nerves.

I'm going away next week for more than a month and not really in the mood to be doing this. What I want is to just leave things alone and get on with a few chores and generally get into holiday mode but because there has been so much volatility there are opportunities around...but you've got to be in the right frame of mind.

3.40 The market has eased a few points but I've been making heavy weather of it lately. I jobbed some DJS and improved my average to 276. The stock is at 277 now so almost square there. FMG is at 621. There's not much damage done but it's really about developing patience. An hour ago was when the short term wave count implied a top and if I was going to short something, that was the time. I'm actually going to stay short the DJS and FMG overnight. DJS because it failed at 282 resistance and FMG because there's a stop at 631 and the rally seems tired. Excepting the fast move down, there are buyers around for FMG in the high 5 dollar, low 6 dollar range but at 622, that support fades.

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4.10 The banks had rallied quite hard from a softer opening but retraced a fair bit of that gain so it's slightly surprising that the index held on so well. It finished at 4304, up 57.

Tuesday, August 16, 2011

4300 or near enough

This morning's high was at 4299, just after the open and the market has sold off to be down 15 at 4268 at 11.03 am. I go overseas for a long holiday in just over a week so I'm limiting myself to some intraday trading.

AWC was ex dividend just under 3 cents this morning. It opened unchanged but looked well offered and I was able to re-short at 196.5. I've bought two thirds of it back at 190.5.

11.18 Short some WSA at 575. It looks like a 5 wave swing could be complete, starting from the congestion at 526. There's a minor crossover of the breakdown level around 580 but doesn't look too significant.

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12.26 The market recovered to be back in the black but has fallen short of the early high for now. I sold a couple more WSA to take the average to 578.

3.03 I'm getting tempted to hold a couple of short positions overnight now that the market is stalling. Got short some FMG at 617 earlier and bought a few back at 611. The stock might have completed an a-b-c rally.

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3.56 Out of the last AWC at 187, WSA at 569 and half of the FMG at 611.

4.14 The market closed down 36. I bought back FMG at 612 but I'm pretty confident that I can sell into strength now, across a range of stocks.

Monday, August 15, 2011

Spring in my step

I have renewed energy now that I have a clear goal, which I've broken down into short term, medium term and long term components. The market has renewed energy too as the fear of the last few weeks has eased and recovery continues. I had a bad feeling about that AWC short on the close and did buy back half but I've stuffed up this morning's trade as I watched it sail past the stop level. It's just easing off now but is still up over 7%. It goes ex-dividend tomorrow which may explain the outperformance relative to the sector and to Alcoa in the US which failed to follow the market up. Locally, analysts are unenthusiastic about the stock and I'm contemplating holding the short now I've let it go so far.

I probably won't though, it looks like an a-b-c recovery that's shortable but if it gets through 200 then there's another 10 cents before the next resistance. I can always have another go on weakness.

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OST is a stock that I've periodically tried to buy, looking for reversal rallies, and it hasn't been a good strategy. I've done it again today but it's a day trade only. It reports tomorrow and since it is actually quite cheap, there's a chance of a squeeze up today. It looks to have already started. I'm long at a tick over 142.5. Here's a 30 minute chart.

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12.54 The market topped out at 4258 with a fractionally lower high. It's up 75 now at 4247. AWC has eased to 192 and OST is hanging in there at 143. My other position is NAB August 2350 puts which have been crunched due to a combination of time decay and another push towards 2350 where it seems to stall. I think the upside is limited but the stock is probably going to take a little while to turn around so I'm going to sell these out later today.

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With the index getting towards 4300, I suspect further gains are going to be limited but there's also value around and with fear easing, the index might just grind and slow. I'm taking an extended holiday soon and with stuff to do, I'm going to stick to day trading until then.

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2.31 Out of OST at 142 for a fractional loss, I was looking for a squeeze and it hasn't happened. Also out of the NAB puts for 51. The market is in a very tight range and having another tilt at the high for the day.

2.42 The index is up 89 at 4262 and along with nearly 12 more points from CBA going ex dividend today it gives us a rise of 100.

3.14 I bought some AWC back at 191 but they've pushed up to marginal new highs. I'm prepared to wear the rest overnight.

3.46 And that's the ton up, no need for help from CBA's ex dividend points. Market is at 4273, nearing 4300 and there's no short term resistance until 4421.

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3.57 Out of AWC at 197...there's no point fighting it and I can always have another go. I've been too quick to look to short the rally rather than wait for it to be obvious.

4.19 Up 111 at 4283 by the close.

Friday, August 12, 2011

Rekindling

I was given a Kindle, an ebook reader, a few months back and I've taken to it. It's a convenient way to read, quite pleasant on the eye, and you can download new titles in seconds. Older books are often free or very cheap and I downloaded a book called "Think and Grow Rich" by Napoleon Hill. It's a well known book, loved by millions and although there's a lot of padding, I really enjoyed it. It was a well spent dollar!

Among other things, the author stresses the need to define very specifically what you want and I realised that I hadn't had an ambitious trading target for a long while. I'd been focussing on what I need to make to keep the business ticking over and that has tended to be what I've made. I don't mean that I haven't had ambitions to make more but not clearly defined, very specific goals with a plan and a burning desire for those goals. I think back over the years and my best trading years have coincided with just such a passion. When I was aiming to strike out on my own, I was determined to build a pool of money and had my best year by far.

I've actually been thinking about what I want for a year or more and although the main themes are in place, the financial side was unclear. Essentially, I just wanted to pay my ongoing expenses and anything extra was a bonus. I have property and couldn't really think of too much more in the way of material wealth that I really wanted apart from money for travel and some house renovations. Anyway, after some thought I realised that I do really want an investment portfolio. I'd love to have a large pool of money to invest in a patient way. So there it is and now I'm really fired up to go out and get it.

As for today, another rollercoaster ride had European markets heavily down on banking worries before reversing to finish strongly up. The US indices, helped by an improving employment picture, had a strong day too and closed up 4% or more. Having run ahead for a few days, the Asx 200 has done well to be holding a gain of 60 points at 11.44 am. NAB has firmed up and taken the edge off my put position but it's a subdued move and has not even gone above yesterday's intraday high.

My trading plan is to trade only high conviction ideas on an overnight basis, trades that I can put on in bigger size and to limit the number of these to three. During the day, I plan to look for intraday opportunities early and try to wrap them up by lunch. Sometimes it may make sense to hold them for longer but I don't plan to be putting on new trades in the afternoon.

I didn't have high hopes for this today with the likelihood of a gap open and then a stalling market but I've put on a couple for negligible benefit. One of these would have been good but I got unlucky/impatient and the other was a reasonable opportunity which I cut well when it didn't go my way.

The steel stocks have been doing it tough and BSL announced write downs last night. The stock is heavily shorted and after a minor blip up at the open, it was sold down to 92. That couldn't hold and the price pushed back to 96. I thought there was a good chance of a short squeeze and a sharp reversal the other way. It looked on the cards for an hour or so and the stock got to 97 but eventually I cut at 95.5. It's getting crunched now so I definitely could have cut and reversed.

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DJS is in another struggling sector, retail, and sold off yesterday on a downgrade. I was looking to sell into a rally. There was some minor volume up to 278 which surprised me but then selling appeared. I got short at 270 but was trading a 10 minute chart. I cut for breakeven after the stock recovered only for it to slump again. I bit the bullet and re-shorted at 264 so I've missed out on 6 cents there. The stock is at 262 now. It was a marginal call to cut at 270 but the market was strong, there was that early buying in the high 270s and I just want to get in the discipline of cutting these trades. I was anticipating a retracement to 272-274 and hoping to resell there, if the momentum stalled.

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Here's DJS on a 60 minute chart. It looks pretty weak so this is one of those trades I should hold for longer.

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1.50 The market is easing off but remains higher by 44 points. I've bought back 10k of DJS at 260 and have 20k left, with the stock having found some buying but no bounce at 260. NAB is back down to 2300, up just 10 now.

I can't really see any real high conviction trades to put on. I wouldn't mind shorting one or two stocks but I think I may be premature. I'll have another look in the last hour.

2.46 Out of the balance of DJS at 262 as the stock found some buyers with large lines being crossed.

I've put on an overnight trade with a short position in AWC at 182.5. Reaction to the company's profit result was negative and it looks like a pennant type correction over the last few days.

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4.13 The index closed up 32 after flirting with the possibility of selling off to a flat finish. AWC eased to 180.5 but found some late support to close at 182. If the stock rallies through today's high of 187 then it's probably not going to be a pennant correction and could push up towards 200 so my stop is at 188. Here's the 60 minute chart.

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It was a nothing day but I'm pleased to have made a start with my plan of limiting any intraday trading to early in the day. I could have done better with BSL and DJS but made money overall (along with a small positive trade in TOL).

Thursday, August 11, 2011

Enthusiastic shoppers

Unlike the customers of poor old DJS, who have just downgraded their FY12 forecast again, Australian investors were keen to pick up the early bargains after more European and US slumps overnight. We've already had a bear market – not that it's over yet – so there's an element in Germany and the US of playing catch up. The market is down 1.1% after an hour and I joined in with the buyers and picked up stock in some of the harder hit resource plays. I'm out now and have started to put on a couple of small intraday shorts as there's the possibility that we may have topped out for the morning. Chinese markets will open soon and they may be less sanguine than the markets which are open – Australia, NZ, Japan, Kospi – and down 1% or so.

I cut my OST position at 139 but more than compensated with the completed trades so it's been a good start to the day. I'm aware of the usual pattern of the morning offering the best intraday opportunities and I'm wary of doing much more from here unless something really good turns up.

What I'd like is to be able to put on an overnight long and the gold stocks are the one sector that are doing well but the two I was considering in RSG and SBM have got away from me. Anyway, here's the Asx 200 daily. It's too early to be going hard at anything overnight since it seems equally probable that the market could be at 4300 or 3900 in a day or two.

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11.42 Weaker than expected jobs numbers plus a 2.6% lower open for the HSI caused the futures contract to drop 20 points only for the move to reverse in about 5 minutes. The AUD fell a cent and has recovered half and the HSI is also picking up from the open. It's all getting too choppy and tricky and I'm out of most trades for now.

12.19 A real surge has pushed the market into the black and futures have rallied 90 points since the post 11.30 am sell off.

2.10 We saw a new high for this retracement by about 6 points at 4167. Asian markets and US futures are, like us, better than they might have been but I'm wondering whether that might be it for this leg up. It's still too hard to call and apart from some intraday trading here and there, I don't plan to do anything either way.

3.40 I've been going through my charts again and I feel like the risk reward equation favours the downside but there's too much risk in being short stock. The banks have had some of the strongest rallies and I've gone short NAB via puts to limit my risk. I've bought the August 2350 puts at 104 with the stock at about 2300. It has rallied from a spike low below 2000 and is unlikely to see that level again in the short term but it still looks overbought and could drop 150 pretty quickly. My stop is at 2400, the level from which NAB broke down.

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4.13 A volatile day but a flat close, half a point higher at 4141. NAB finished at 2290. The best part of the day was the first half hour to an hour when I traded out of some early bargains although in retrospect, if I'd held through to midday, it would have been even better. I got caught out trying to day trade in the afternoon again but realised I was falling back into an old pattern and got out. It was a waste of time, as it usually is. Having pulled myself up, I was then able to step back and look at the overnight potentials. I can't say that I find the NAB trade compelling but it's ok and it's a way to get into a more useful habit of scanning the market in the last hour for overnight opportunities. I'm supposed to do it every day but when I'm caught up with intraday trading, it often takes a back seat.

Wednesday, August 10, 2011

Whoosh!

The US market left it late but finally had a very strong reversal so that the market here has kicked on another 2.7% at 12.26 pm. My phones and computers have been down for most of the morning so I haven't been able to do anything. The market gapped up though so I don't think there was much for me to do as I had a clean slate again.

The market is back to 4143 and there could be a day or two more of rally. Obviously, it could be a V bottom with plenty more to come but I'm going with a 5 wave down expectation which would make this the 4th wave recovery. However, when the sell off has been so abrupt, it's possible that the 5th will fail so there could be a higher low in the event of another sell down.

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I just sold out half of the DJW position at 350 and I've put on an intraday long in LNC at 227. I traded LNC intraday and it was one of 2 or 3 stocks that I considered holding overnight. I wish I had, it's had a 15% bounce. I'm long it on a 30 minute signal with a trailing stop. The daily chart shows that there's more room to move for a retracement. First the 30 minute.

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And the daily, I'm hoping for 240 today if it keeps going but it's already run very hard.

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12.51 The market is firming again but it's much more tentative than yesterday. I've also gone long department store operator DJS at 279. This stock has been slaughtered recently after a downgrade but HVN has just surprised the market with flat sales for the year and the stock has rallied 8%. That may or may not be helping but the 30 minute chart looks pretty good with a sell off from an early high and then a breakout following a minor congestion. Stop is at 275.

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The daily chart shows that DJS almost halved between late April and yesterday morning.

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1.42 The market is solid but not kicking on and we're outperforming Asian markets over the last couple of days so I'm out of LNC for an average of 232.

2.05 The index is flatlining. I'm out of the rest of the DJW at 348.

2.32 Out of DJS at 280 as the market is topping out. LNC have just sunk to 220 so that was in the nick of time. I think there's more in the rally but it's too hard now and I'll wait till something good turns up.

3.51 I've found myself getting sucked into doing intraday trades and have chopped in and out of a few stocks to no great effect. Yesterday it was worth going hard all day but those days are few and far between. I normally find that there are a few opportunities in the morning but it's hard going in the afternoon.

I've decided to go long OST as an overnight position at 145. I don't necessarily think that this has made a bottom but there's a lot of room for a retracement rally, it's heavily shorted, it reports on the 16th and it's cheap, even in this market. Chinese steel mills are going full bore to cope with construction demand. Here's the daily. It's a reversal trade with a worst case stop below yesterday's low at around 127. The entry was a break of yesterday's high, I missed the best because my system was down but it moved in a tight range all day so the buy price is ok.

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4.14 The Asx 200 closed at 4141, a rise of 106 points. I have one position in OST and that's it. The rally has almost gone far enough if it's going to be a simple retracement but the chances are good that the US indices will have another day of recovery so we could get some follow through in the morning.

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Tuesday, August 9, 2011

Waiting for the cavalry

A quick one since I'm pretty busy. Very happy to have no overnight positions and the market is down 4.3% as pessimism sweeps the world. Resource stocks particularly hard hit here and the AUD continuing to sell down to on risk aversion. Chinese monthly data comes out in half an hour, should drive the market one way or another.

The low, right now, is 3806, so already close to the bottom of the next range around 3700-3750.chart

12.20 Falling again, off 200 at 3786. Chinese inflation is still high and we're waiting for production numbers.

12.34 I'm buying a couple of things today, on an intraday basis. It's just seat of the pants stuff, I'm chopping in and out and staying long. There's every chance of a big bounce as the day goes on, now that the margin sellers and hedge funds have hit stocks hard.

1.08 The recovery is gaining some traction, the loss has been trimmed to 134.

1.39 We've rebounded almost 3% from the –5% low. Since there's no rational overnight trading possible, I'm just trading intraday and having some joy in AGO and FMG.

2.33 It's a super fast market and is now almost square. Down 1. I've been buying and selling like mad, still long but cut about half. Mostly 10 minute signals.

2.52 Reached a high of plus 22,23.

Here's a 10 minute chart of FMG. Punted a potential higher low around 520. Still have 5k left. Looking for one more kick up and although I'm really tempted to stay long overnight, there have been so many intraday opportunities today that I don't think I need to bother.

chart

3.22 Out of everything for now with the last of the FMG sold at 563. The market made a slightly lower high and is easing off as the very negative opening calls for European bourses hove into view.

3.27 Oops, going again. Back in AGO at 360.

chart

3.48 Such a dramatic day, no cavalry appeared as far as I can tell, it was just an overdue reversal. The market has had a low of 3766 and a high so far of 4044. Up 33 at 4019 now. Here's a 10 minute chart for the Asx 200 over the last 2 days.

chart

I've almost sold out of AGO again at 365, was looking for something around 375 but it's getting to the end of the day and maybe that's enough.

I have put on one trade to hold overnight. It's an odd one for me, one of those Licensed Investment Companies, Djerriwarrh (DJW), which simply holds a portfolio of stocks. It's a proxy for the market and has underperformed equivalents ARG and AFI, and the Asx 200 today, even after allowing for a recent ex-dividend. Long at 328.

chart

It isn't particularly liquid so it's just a small position.

4.10 I'd like to be long overnight but we've just had a 278 point rally from low to high so, with the exception of DJW, I'm out of everything. Here's hoping there'll be some more intraday opportunities tomorrow because it's probably an interim low rather than a really good moment to invest. Up 49 at 4035 for the Asx 200.

chart

It wouldn't be strange to see the market bounce to 4200-4300 in the very short term, I just hope there's a higher low to get set.