Interesting reaction in the gold stocks

1.25 pm The ASX 200 is up 8 having shrugged off weak leads and helped by the rebound in the banks. Resources were hit hard on Friday night in response to the strengthening US dollar and gold had its biggest move in a while which was a drop of over 2%. Interestingly, the mid cap golds are flat to up with major NCM only down 14 cents. It just goes to show that a pattern will often play out despite the lead in to the day. For example, St Barbara came up for me as a buy signal on Thursday and although I didn't take it, I was pondering on Friday whether it would have been better to close out all of the position or sell half. I decided closing out all was the best bet as the stock eased on Friday afternoon and I assumed, on the weekend, that the golds would be under real pressure today. As it was, the stock pushed higher and looks to have reached the top of a trend channel you might draw to contain the last few months' action. This is roughly where it might have been expected to get to in the event of a flat lead.

I was pretty confident about Santos on Friday but it's down 15 to 583 on weakness in the oil price and fears of increased production to be announced at the upcoming OPEC summit. I realise that there were a couple of less demanding charts that gave buy signals and these were in Altium or Lend Lease but was drawn to the chance of a real surge in Santos. With the wisdom of hindsight I can see that the stock is trading below the 50 day moving average and the recent fall was too steep to be confident that the uptrend was intact.

LNG was also a base on base signal but the context was very different as it was coming from a strong foundation and was clearing above levels going back to mid February. This has done well today despite the small resource sector being soft.

My other large long was IAG and this is up 1.8% following Friday's signs of life after a slow and shallow wave 4 type correction.

3.27 pm Santos has recovered most of the earlier loss so I'm stoked about that and will keep a chunk of them for another night assuming no major change.
I'm taken by Qantas as a new long. It's obviously a beneficiary of an easing oil price and also will be paying generous franked dividends so also has the tailwind of bonds easing which seems to be driving the bond proxies today. More specifically chartwise, it broke recent resistance drifted back and held and is going again.

I'm planning to buy Domain Holdings for the small cap book. It's a bit of a fudge because it's really a mid cap but volume is light so it suits. It's not shooting the lights out but seems to be rolling up and has a neat buy signal.

4.35 pm I sold out half of the IAG and a chunk of the STO with QAN filling the gap. I was looking to short COH on Friday and missed it but got a second chance today. In the small caps I bought DHG and sold half the LNG at 53.5.
The index closed up 10 points in a strong performance given weak leads, weak Asian markets and soft US futures.