Dave’s Trading Diary Update – May 2010 – Slowly The Stops Get Triggered

What a brilliant week on the markets! 

After the short term sell signal on the ASX Top 200, stocks really began to sell off.  Of course – a week after the chart signal we hear about higher taxes on resource companies and then higher overall interest rates too.  The chart always seems to be “in the know”.

Speaking of which, the Dow Jones (DJI) has just made an early exit signal, similar to that of the ASX Top 200. 

And gradually, just gradually, stocks in my portfolio begin to get stopped out.  For that, I say “thank goodness!” – it was getting hard to find a new entry signal on a weekly chart – so hard that I was resorting to the smaller cap companies which are not my forte.  Hopefully the market will move away from the sideways action and make a solid retracement – and then we can get some weekly entry signals happening again. 

Of my recent additions, FMG was stopped out ($4.73) after closing below the previous trough on a daily chart. 

BEN at $9.60, also below previous trough on a weekly chart.  

NWS I raised the stop to break even at $18.55 for a theoretical free trade. 

CPU made a Dow Exit and a tidy profit was made - this one was entered on a weekly chart signal at $9.80 before the diary started.  The lessons are clear – the longer the timeframe, the stronger the signal.  Heck, I can write about it, but I still have to be reminded every now and again.  I guess that’s what you call being a human being.

Hope your trading is going well!

Dave

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May 5, 2010  Tags: , , , ,   Posted in: Dave's Trading Diary

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