The all important 4600 was attampted yet again today but held strong. The market reversed hard off 4598 and closed in the red so it seems to me that a number of people have their eye on that level. We’ll take a more in-depth look at the XAO weekly picture tonight in the Technical Research area. Resource stocks gave back some ground today but it’s to be expected after the recent rise. Tonight will be an important session in the US because it will offer up a lead for us next week and whether or not we drive up and through that resistance or fall back again into the range. Trading is frustrating, but it can only be expected with this range being the conerstone pattern of the moment. The XAO has rotated in a 447-point range since late May – difficult to get excited on extracting profits until that changes.

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Friday 10th September, 2010

On the surface a quiet day, but on closer inspection the market got a little wobbly late in the day after the Labor announcement was made. What we’ve not really had a good handle on to date is how much a Labor victory had been priced into the market. Obviously the importance is the implementation of the Resource Super Tax and its impact on those sectors. It certainly looks like our favoured mid-cap miners took some pain late in the day. However, will it follow through tomorrow? or will we continue to see strength and look back at this as a knee-jerk reaction? Time, as always, will tell us.

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September 7th 2010

A very strong day out in the mid cap resource and energy sectors which is the area of my main focus and one that has been mentioned in these pages before. If I can say anything bad about this recent strength it’s that it may have gone a little too far too fast, albeit that is no reason to be taking profits. Economic data out of China is strong and the Indian stock market is almost back to new highs, that is above the 2007 highs and therefore indicative of a very strong economy. Both of these portend to stronger demand for resources. Also to note is the increasing merger/acquisition activity which will also keep a speculative bid in many stocks. Apart from pure breakouts we still require charts to reset to form some bullish setups. One or two are forming but not enough to keep me happy.

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September 6th 2010

An up day to be sure, but an overly convincing one, although we did most of our upside yesterday. Many stocks gapped open on the US lead but dropped back intra day, which is quite usual. The bulls are chomping at the bit. Those stocks that did close weak were mainly on low volume and low volume strength is not something to be overly joyed about. That said today strength enables us to get our stops to breakeven on current long positions.  The broader market remains in its holding pattern below 4600. We’ll be looking closer at that and the major sectors in tonights chart reviews, but until 4600 breaks we need to be vigilante of a bull trap. Interestingly enough the Growth Portfolio is starting to offer up buy signals on some of the large cap leaders which is something a little more broad based than many of the lower cap. energy and miners.

Note: We’re about to start adding in futures and FX setups within the Global Power Setups area (formally US Power Setups).

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September 2nd 2010

80 days. That’s how long this market has been stuck in a 300-point range, about 6.75% maximum rotation from top to bottom and back again. We need to go back to mid 2006 to get a comparative example and prior to that late 2002. We can therefore assume that, albeit rare, we’ve traveled this route before and will no doubt travel it again. For trend following, and even swing trading, it can make life very frustrating and difficult. However, on the basis that it has happened before we need to be able to push through and get to the better trends on the other side. Tomorrows direction is anyone’s guess.

Note: We’re about to start adding in futures and FX setups within the Global Power Setups area (formally US Power Setups).

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August 31st 2010

One day doesn’t make a new trend but we suspected that some bullish follow through was going to be seen after Fridays activity. We posted several new long trades for aggressive traders late yesterday and all of these were filled. AAX and KZL were the standout movers, but we need to see follow through. If upside momentum continues we’ll be moving from a bearish stance to neutral at around the 4523 level basis the XAO. We’ll do a full update on the broader market indices in the coming days:

Note: We’re about to start adding in futures and FX setups within the Global Power Setups area (formally US Power Setups).

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August 30th 2010

I eyeballed some 500 charts this evening and one stand out pattern is bullish A-B-C’s. The daily and weekly trend is down so these don’t fit our criteria, however if the US markets have a significant bullish night I will post some setups over the weekend for Monday. As usual, going against the broader market trend is considered an aggressive stance and is not suitable for everyone. Stock of interest are: ABY, AGY, AGO, AAX, BOW, KZL, LNC, PDN and WHC. Check back on Sunday night if the US takes off. Otherwise we’re really in no-mans land. The trends are down but not convincingly so. Some of our short trades have tagged their respective breakeven stops and whilst this may seem frustrating it is good trade management.

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August 27th 2010

4494 is an important level in the ASX-200. Below that we technically retain our bearish view, but any move above takes us back to a neutral stance. If we probe a little higher after todays move, yet fail to move above 4494 the bearish pattern becomes slightly more aggressive, that is we start seeing a ‘nesting impulse’ or a 5-wave pattern sitting within another 5-wave. If we are in a wave-3 lower, then one needs to think that it will extend and contain a smaller degree pattern as well. Back above 4494 really starts to confirm that all weakness to date 2010 is certainly corrective and not the end of the world as so many are currently calling. Even our expected move down to the 3800 – 4000 is a healthy decline within the realms of strength off the March 2009 lows.

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Thursday 26th August

We’ve been flirting with the index trend being up or down over the past week. Todays very small down day was just enough to tip the scales from Fridays neutral to bearish. From a discretionary perspective the trend is neither here nor there, and by the way the election outcome had transpired it may well be that we stay in limbo without a significant lead from the US. As the trend has turned down the Systematic PowerSetups have taken defensive action on all positions and will not signal any new buys until we get some strength back.

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August 23rd 2010

Another stiff down day for the broader market but much of the mid-cap resource and energy sector held up reasonably okay. Technically though we retain a view that ongoing weakness is unfolding and will continue to do so until late October. Daily and weekly trends are both in a neutral state right here, but will turn down with another negative session. Momentum remains firmly down. Positions in the Discretionary setups are difficult to decipher right here without any substantial direction, although my bias is to the downside.

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August 20th 2010