Running its course
10.58 am The market is in that mode where overnight leads make little difference because there is a clear correction taking place. There were, in fact, precious few leads anyway as the US was closed and European indices had minor falls while LME commodity prices were firmer. The SPI was only down a point but the index has fallen steadily from a weaker open to be 19 points lower. Banks and yield plays continue to underperform and the resources are chopping around after the strong recent rallies.
The XJO chart is testing last week's low and a break might imply a test of 6000 in the next few days.
My large caps are a bit weaker - DOW, MND, PTM and RSG - but I added A2M early on a Bellamy's upgrade and that has been a good play. Long at 719 average and sold a little at 752 on a fast move. After getting whipped on this last week, I'm more confident of a move to 800 after a more complete correction and a hold of support around 700.
Bellamy's is one that got away. I almost pushed the buy button twice yesterday but was short of room in the small cap book. I could easily have bought in the large cap book and didn't think clearly enough. Still, the A2M trade is some consolation and I bought BUB and WHA early in the small cap book too. WHA is the more bullish chart with 270 not out of the question. Long at 192.5 with last sale 199.5 though I'd like to buy more as I sell other things to make room.
12.49 pm Interestingly, the index dropped quickly through the recent low to be down 35 points but has since recovered more than half of that as the low was rejected, at least tentatively.
1.53 pm I bought BUB early on spec but the weekly is shaping up quite well now with a break of last week's high forming a higher low.
3.48 pm Downer is not doing what I'd hoped and looks to be rolling over again from a lower high. It's down 10 to 685 and one to cut today before it gets much worse.
The market is easing back after the first recovery but every other regional market is up along with US futures so I'm expecting a snap back. I thought it could happen this afternoon but I guess I'm going to have to wait and see.
4.22 pm The divergence continued and the index closed towards the earlier lows, down 28 to 6049. I sold most of the DOW and a quarter of the A2M. The small caps were slightly up net although nothing really significant happened. New positions in BUB and WHA simply held near earlier highs.
The XJO chart is testing last week's low and a break might imply a test of 6000 in the next few days.
12.49 pm Interestingly, the index dropped quickly through the recent low to be down 35 points but has since recovered more than half of that as the low was rejected, at least tentatively.
1.53 pm I bought BUB early on spec but the weekly is shaping up quite well now with a break of last week's high forming a higher low.
3.48 pm Downer is not doing what I'd hoped and looks to be rolling over again from a lower high. It's down 10 to 685 and one to cut today before it gets much worse.
4.22 pm The divergence continued and the index closed towards the earlier lows, down 28 to 6049. I sold most of the DOW and a quarter of the A2M. The small caps were slightly up net although nothing really significant happened. New positions in BUB and WHA simply held near earlier highs.
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