Monday March 8th 2010

The upper boundary of the reversal zone we discussed on Friday night was almost tagged today. This is the area from which any reversal should technically take place, but as we said, confirmation back through 4717 is required to get anxious. Todays close was quite weak and there is a small gap just below the market which will more than likely get filled in the coming days. Added to this we have four RED warning bars. Normally when we get five in succession a reversal of some degree will more often than not occur. Most strength today occurred in the smaller end of the energy and mining sectors with some substantial jumps. We’ll be discussing the Material Sector in more depth tonight with a full review. A little caution required here.

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ASX into possible reversal zone…

Finally some strong upside movement that is directly related to the Type-A Bullish divergence. We’ve been on about this for a week now so its good that its offering up the strength. The larger question is whether or not we’re going to skip to new highs again and look back at this weakness as just a correction, or whether or not we’re having a brief bounce before heading lower again. I favour the latter scenario but will be willing to go with the bullish flow if proven incorrect. There have not been that many bullish divergence setups with individual stocks (unlike the US) but should the trend change to up again we’ll be seeking out breakout trades.

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Feb 17 2010

Some would say the market did well today, but taking a closer look it was a poor performance. Firstly early trade saw the index +52pts before closing at +22, so well off the intra day highs. This weakness was due to comments surrounding the Greece deficit issues and more Eurozone concerns. We’ll see how they play out in the coming days but that concern is still playing with traders nerves. Secondly, and perhaps more importantly, Westpac results were well received driving it up +6% as well as dragging up NAB and ANZ. These three combined accounted for a rise of +31 index points, so remove them and we actually would have had a negative day. All in all we’re looking for the market to offer up a little more bounce over the coming week, but its struggling. Larger picture we retain the view that weakness will prevail into mid-year and expect the index to drop toward 4000.

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Feb 16 2010

The market was heavy today after China announced late on Friday that again it was curtailing commercial bank lending again in an attempt to slow the economy. That said activity was very quiet for a number of reasons; Chinese New Year and many Asian markets closed, a US holiday tonight and a plethora of ASX earnings due in the coming week. It seems most are willing to sit in their hands and take direction once all the news is digested. The market still has a heaviness to it yet we’re inclined to stay with the ‘sell the bounce’ theory at this stage. Bigger picture we remain in the broader range that has been in place since last September.

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Feb 15 2010

Yesterdays action was a little concerning as we wanted to see immediate follow through from Fridays reversal. We got the follow through today but it needs to stay the course for a week or two. I sort stocks into bearish and bullish folders based on a predefined scan I use. Interestingly enough many in the bearish folder closed very weak last night even with the background strength. The trends are all down so any counter trend trade is considered aggressive so don’t get too carried away with upside follow through. We continue to look at this coming bounce as a selling opportunity.

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Feb 9 2010

There remains a few setups still in the making. A few more days should see them enter our pages. Until then Type-A bullish divergence remains intact even though price dribbled lower. The US action last night was certainly not promising so we stay with the view that we expect a near term bounce followed by another leg lower. The safe trade remains shorting on that bounce.

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Feb 9 2010

We had no Discretionary positions going into todays weakness. I will say one thing – the market performed admirably today. So much so I will be taking a close look at the ASX-200 (XJO) again tonight in the Chart Research area and making some comments accordingly. The daily and weekly trends are down meaning we have no reason to be looking at long positions, but my comments tonight may change that outlook. I will be watching how the trend develops in the coming week and we’ll start looking for new trades. If you are looking for some long side positions, check out AMP, MSL and IOF which all exhibit some good looking bullish triangles.

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Jan 25 2010

Another garbage performance by the local market. It really struggled to hold its head above water and it certainly appears that seasonal strength is wilting. I now have 1 position left in the ASX Power Setups and two positions left in the US Power Setups that I will be closing tonight. Once the ASX position is closed I will be hanging the boots up for 2009 and readying the account for 2010 when we’ll go with real time performance again. We’ll be starting the year with a fresh $100,000 and follow the Systematic Power Setups without discretion. Account statements will be posted at the end of each week. I will mainatin my Growth Portfolio positions over the Christmas break.

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10 December 2009 – Winding down

The key level we’re watching at present is 4587. A break down through that suggests a deeper correction toward 4400 is underway. However, if price can hold above 4587 we have a significant bullish triangle to contend with that may provide the springboard into the New Year. We’ll take a closer look at this in more depth tonight in the XJO review. But for now we’re seeing red across the board so its a game of trade management until the trend can resolve itself in a more favourable way.

** Note ** As of January 1st 2010 the current track record for the ASX Systematic Power Setups will be replaced by a real time trading account. This will ensure a much more accurate representation of results and slippage.

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9 December 2009 – Santa rally needs to start right now

The market dropped 100-pts right on the opening bell and then stayed in a sideways band. It certainly appears that the sideways ranging is going to continue, albeit we still retain a positive interest in the broader indices strength. The Transports have broken up and out of the resistance and whilst they were weak last night they certainly were only slightly down. Its coming into quiet Christmas trade and with this sideways movement dragging on I think its time to hang up the boots for the year and await some new direction in 2010. Personally I’ll be managing my current open trades but not adding any new positions.

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8 December 2009 – Weak, but quiet