Or turn down

By the way, I've got no appetite to write about the mental game of trading. I think it's because I blog during the trading day and it's not necessarily a time for reflection. I'm going to change the title again to reflect what I am trying to do but it might take a week or two to get around to it.

Apart from the US services PMI, most of the monthlies were disappointing. The Asx 200 has been grinding down all day and I'm out of the long in PRU – dud trade or dud entry, at least – and into two new shorts and one defensive long.

Resource stocks were sold overnight after an official growth reduction from China and that has been the main driver today.

My last long position is in NAB March 2400 calls. I sold out the extras from yesterday for a small profit and am left with the original trade. I don't think I chose my moment well to get in but there's some short term support and I'll hold the balance for a little longer. I'm happy enough with the weekly, just not the entry point.

The new, defensive long is sleep apnoea treatment company Resmed. I bought RMD at 280 and I'll wait till later to complete. The stock has had a shallow correction and is resuming an uptrend. My stop is at 270 and 300 is a reasonable target. It's the sort of safe haven that might outperform in a weak market.

2.34 Just back from the gym to find the RBA has left rates unchanged although the commentary is reasonably neutral. There's no real reaction from the currency and the market is renewing the sell off after a pause.

The short positions are in AGO and PDN. I've had a couple of stabs at buying AGO recently and have exited for small profits both times after a failure to press on. It's a bit of a clue that the stock has been peaking. I'm short at 311 with a stop at 325 and I'm hoping for a quick break of 300 with a drop towards 280.

I was keen to short PDN yesterday but was out of the office. I didn't miss much and my entry is after support has broken so it's better quality. Short at 177.5 with a stop 10 cents higher and with 160 as the first downside target.

Here's the updated Asx 200 daily chart showing a break of minor support at 4250 and with 4200 hoving into view. If the index fails to hold and push through 4350-4400 then a move to new lows at around 3700-3800 is likely in the medium term.

4.16 I paid 279 for the RMD balance. Otherwise, AGO and PDN closed at 308 and 175 with NAB a relatively good performer on the day, down just 5 at 2348 as the index fell 58 points to close at 4205.

Waiting for something to turn up

The index is 19 points off at 4254 as we approach 2 pm. I sold out the LNC at 137.5 average, a little better than Friday's close but 5 cents below my entry level. I also sold out of an OST position for a small gain. I put it on for a resumption of trend but it failed to push on and is now ex-dividend.

I'm left with PRU which is holding reasonably well at 277 and have added a few more March 2400 calls in NAB at 15.5. My take on NAB is that the low at 2256 in mid February was the end of the correction. However, I probably could have waited with the extra calls because it looks as if it could chop around for a few days even if it is going to run.

Broadly speaking, the market is not compelling. We might have seen a short term high and the European and US indices are losing momentum. Here's the daily for the Asx 200.

The FTSE 100 is holding an uptrend but could be rolling over.

I think I need to look more seriously for short positions. However, I'm off to see a surgeon for a second opinion. I've been advised to have an operation on my leg and want to confirm the diagnosis. More tomorrow.

Rear view mirror

The index is up a paltry 13 points despite a bounce back overnight in Europe and the US. Those markets do look ripe for a pullback but it hasn't happened yet and we keep fretting about it in our trading. PRU has bounced back but LNC is lower and my March 24 call option position in NAB has dropped a bit as the underlying has fallen 23 to 2335. The UBS analyst has downgraded on the back of the struggling UK banking business, the sort of news flash which could get him a job with Moody's. Never mind that the European banking sector is recovering rapidly from intensive care with as much 3 year money at 1% available from the ECB for banks to lend out to their hearts' content.

I'm not unhappy about it and I'm hoping to add to my position at better levels.

The Asx 200 looks quite ropy after this week's failure to kick on but it has also been in a very narrow range for all but 3 days since mid January so there's going to be plenty of support. I'd say that the market has gone to lunch and isn't coming back.

4.14 A late push left the market up 18 points.

Sell on fact

Post the 3 year loans to EU banks and following cautious testimony from Bernanke, markets sold off with gold the hardest hit. The weekly still looks ok, it's a long way down to the start of the run at 1523, but this leg up has hit a brick wall. PRU has moved in lockstep with the gold market, falling through the bottom of the trading range and recovering somewhat while staying above the earlier breakout level around 260. Gold has recovered USD 22 in our time zone.

I sold the balance of AWC on the open at 135, the same price as yesterday for the first half. LNC is down but holding while NAB is flat in a market that's lower by 29 points at 1.32 pm. Chinese PMI numbers for February came in a little better than expectations at 51 although it's not helping the HSI too much with the index down 0.5% after about an hour.

I'm not sure what to make of the index at the moment. Yesterday's high and the subsequent failure might have been enough to complete this last swing up since a low in late December but the whole desire to get out of risk trades seems a bit knee jerk when authorities world wide are pumping out credit.

4.15 There was more weakness in the afternoon and the final result was a drop of 1% to 4256. I'm out of AWC but still long and a little nervous after the sell off last night.

Leap day

I heard the expression this morning to describe February the 29th. It describes the market activity too, mildly bullish overnight leads but a surprise jump of 44 points in the market at 3pm as the index has ground higher.

AWC has continued to rally. I'm not sure why because analysts are lukewarm about the stock and the US listed Alcoa is going nowhere. I've sold out half of my long at the old high of 135. I'm letting the rest run with the last sale at 137.5.

LNC is still consolidating but is up 4 to 149 with the general lift in prices. PRU has rallied 5 to 286 as gold overnight got a rise on the prospect of more money printing from the LTRO. Here's a weekly of the gold price with 1900-2000 on the cards soon.

The weekly for PRU is lagging behind slightly but I'd expect it to track the gold price by and large.

I've been looking at the NAB chart for a while and getting quite bullish but I wasn't sure why. Another injection of liquidity into European banks hadn't occurred to me but NAB has a big exposure in Scotland and the North of England. The daily has pushed out of a mini congestion after a slow correction since early December. I've bought March 2400 calls at 28 and I'm hoping for a rapid move to 2500, 2550. Here's the daily. It's an a-b-c correction for wave 2 with the third wave moving into its acceleration phase.

4.14 There was some concerted selling in the match to knock the index below 4300 for the close. It finished up 36 at 4299. I don't know why they bothered, with the amount of money printing going on round the world, it's hard to see stock prices staying down. Maybe it was a window dressing thing.

Imprudent

The index is little changed approaching the close and so are my positions on a net basis. AWC has kept running to be at 132.

LNC is having an inside day but looks ok to me. I bought another 10k at 146 which is where it's trading now.

PRU is down 9 at 279 after I imprudently leapt back in having sold at the wrong time.

The weekly looks good to me but I might have to deal with a couple more days of pullback to the bottom of the range.

It's not unlike the general shape of the Asx 200 daily and weekly except in the case of Perseus, the weekly surge up broke clearly through previous lows, a bullish sign.

No new trades.

4.04 AGO reported this morning. It initially fell to 310 but steadied to be finishing close to square at around 316, 317.

4.11 The index closed at 4263, down 5. AGO drifted to finish at 315 and PRU blipped up to 281.

Wolf from the door

Rudd, the wolf in sheep's clothing, has been soundly beaten in the ALP's leadership poll providing the backdrop to the days trade. There are a number of stocks ex-dividend today, accounting for 18 index points, so that the loss of 29 points at 1.56 pm is not as bad as it appears at first sight.

My long positions are mostly pretty good. AWC has firmed to 126 and LNC has surged to 151 while PRU is flat and AGO down 4 at 322. I'm out of some of the AGO at 325 as the stock reports tomorrow and it seems like an each way bet to me. I took the trade as a retracement and therefore the risk of failure is too high to have me hold this into the result. I'm hoping to get out of the rest as the afternoon rolls on.

The LNC chart looks particularly good on the weekly scale.

I'm expecting the market to drift sideways to down over the next couple of days so I'm going to need some continued outperformance from my longs.

3.53 The market has kept ticking down, defying generally steady markets in the time zone. The Asx 200 is off 46 at 4261. AGO couldn't get off the canvas so I sold out the last of it at 320 (v 316).

4.15 A minor bounce left the index down 39.