May 4th 2009 – A flurry on strength

The ASX has been a little short of good trades over the last few months but over the last 2-weeks there has been some great opportunities. Currently the short term Power Setups portfolio is following along with some 16 trades at various stages of development. We’re looking to bank some good partial profits in ROC after entering at $0.47 on April 28, representing a 34% gain in just a week. BKN, AGS, OMH andNOD are¬† some also showing some great opportunities for short term swings.

Liquidity is still low in the domestic market yet we expect it to grow over the coming months as some bear market bounce confidence keeps building. We do not view this current strength as a new bull market, although we do note that several brokers have called an end to the bad times. They may well be right through to the end of 2009 but we see continued instability for some time to come.

Our intermediate term model, the Growth Portfolio, is faring extremely well in these ripe conditions. This portfolio is based on computer generated buy and sell signals looking to track trend lasting about 10-months on average. We turned this system back on in mid-February after expecting a near term bounce.

The basic idea is that buy/sell signals are given daily and subscribers can pick and choose which suit their own risk appetite. Once the subscriber has initiated 20 positions their portfolio is full and they await a sell signal. Since February there have been 26 possible portfolio combination’s where a full compliment of 20 stocks are held. You can clearly see that all are performing well, although those to the right of the chart have not been running as long as those on the left.

Click to enlarge

The Growth Portfolio is one of the most favored styles of trading for subscribers as its easy to use and doesn’t require constant attention. Perfect for active investment purposes.

Best posts on The Chartist from Apr 2009

• April 1, 2009 – No fools, back into it…
  Posted on Wednesday, April 1st, 2009 in ASX Commentary – Comments: (0)
  We’ve had some time away from the blag as we build the new website. That will be online shortly. Trading remains slow with minimal progress suffice to say we’re keeping our heads above water and will therefore be able to make ourselves available for when things get a little easier. As hard as it may seem to go 5-months with minimal gains, that just the way it is sometimes. We’re about +2% in this period compared to +154% for the prior 9-months.¬† There are a few factors to consider as well. In the Jan 08 – Nov 08 period we made 156 trades. Since Nov we’ve mad just 26. So trade frequency is right down – not for want of trying though. Liquidity and short availability of stock have been considerations, but things are starting to turn. Our broader market analysis points to a rapid bear market rally as either started or about to start which will be a prime time to get involved.
• April 20 2009 – Extreme Caution Alert
  Posted on Tuesday, April 21st, 2009 in ASX Commentary – Comments: (2)
  On Sunday afternoon we alerted all subscribers of impending weakness, weakness that was well supported by a series of technical signals and patterns. We’ve been under no illusions that the bear market bounce of the last 6-weeks had the ability to reverse and do so with vengeance. A final ‘washout’ could be underway. It was suggested that subscribers bank some profits or tighten stops on long positions in order to protect profits as this weakness takes hold. Our short term Model account has no open positions and we’ll stay sidelined until the intentions of the market show more clarity.
• April 22 2009 – Staying cautious
  Posted on Thursday, April 23rd, 2009 in ASX Commentary – Comments: (2)
  We opened a long trade in COE which immediately decided the upside wasn’t the line of least resistance and closed weak. This is currently the only position in the short term Model Account and we’re cautious about market weakness accelerating in the coming weeks due to divergence on the leading indicators. Until this divergence unwinds we’ll keep a low profile. Our daily trend filters remain bullish and weeklies bearish so there is a lot of conflicting evidence for swing trading at present.The intermediate term Growth Portfolio is trying to hold recent gains – some very nice gains at that. This portfolio has an average hold period of 10-months but has been on hold over the last 18-months whilst the market declined. We turned it back on in late February expecting a reasonable upside swing. Participants have been rewarded but with the divergence discussed above we may see some of those open gains given back.
• April 23 2009 – Plenty of opportunitites
  Posted on Friday, April 24th, 2009 in US Commentary – Comments: (1)
  Without doubt the US markets are offering up many bullish patterns that we like to trade. My contention is that a reliable indicator¬† we use is still suggesting the market is not ready to move higher just yet so I’m wary of making formal recommendations. That said we are running a number of positions from ‘informal’ suggestions such as BWLD which is doing quite well. Here is the curent chart:

  Click to enlarge

  [/caption]When our indicator unwinds itself then we’ll reassert ourselves to the long side.
• April 7, 2009 – Reporting season wobbly
  Posted on Wednesday, April 8th, 2009 in US Commentary – Comments: (1)
  We’ve been playing a cautious game over the last few weeks not really placing too much faith in this renewed strength or bullish market chatter. Whilst we’re taking a few long positions we’re also keeping the risk very low at just 0.5% per trade. It was highlighted to subscribers that perhaps the start of the reporting season would induce some of that expected weakness so its of no surprise that the we’re seeing this weakness coming through. The question is how it will impact on the larger price patterns. If price dips on low volume and in a meandering fashion then we firmly believe that renewed strength will emerge within this bear market bounce. However, if reporting season sends a vortex of fear back into price then we must expect new lows will be the expected outcome. In other words we watch this decline with interest because it will in turn dictate what the next move will be and how we position ourselves.