All Ordinaries Three Inside Up Pattern

Wednesday, March 7, 2007



A Three Inside Up Pattern occurs after a 2-day bullish harami pattern. To form the Three Inside Up pattern, the third day is a white day with a higher close than the second day. The three inside up pattern turns a low-reliability bullish harami into a high probability reversal pattern.

The All Ordinaries have formed this pattern on the last two pull backs in the recent uptrend. The current pullback has again formed this pattern? Is this candlestick pattern and indication of a strengthening XAO?

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SA Referendum on Nuclear Power

Tuesday, March 6, 2007

The backflip occurred quicker than anticipated. Mr Mike Rann, The South Australian Premier, has declared he wants a referendum on the issue of nuclear power for South Australia. This comes after a week earlier saying it would be an "all-round disaster" if a plant was built in his state.

Mr Rann told Australian Nuclear Energy Pty Ltd, the private company behind building the proposed nuclear power plant in Australia, that "My message to this company is 'you've got zero chance of building a nuclear power plant in South Australia; you'll have to look elsewhere'.". Now Mr Rann wants a state referendum on nuclear power if the Federal Government moves to override state bans on nuclear power plants.

Given the fact that the nuclear power industry has a history of accidents and the people who suffer most if an accident does happen are those living closest to the nuclear power plant, it is logical that decisions concerning the construction and operation of reactors should be taken by public referendums. Dangers have been reduced, we are told, with advanced technology, but the fear remains.

I think both Mr Rann and Mr Bracks (Victorian Premier) have made the correct decision in allowing the public to speak. An earlier decision by Mr Rann would have improved is credibility, but I'm pleased he was strong enough to reverse his decision. Speculation on 5AA, a South Australian local talk back station, that this announcement of a referendum is to divert attention of the job losses of hundreds of Holden workers in Adelaide northern suburbs could have been avoided and demonstrated a stronger government to the South Australian voters.

South Australians are after a strong leader, and both the current government and opposition party are not providing it.

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Conquest Mining Limited

Monday, March 5, 2007

Didn't realize CQT was in a trading halt, so this one is a hold in the ASX Opportunities until it comes out and we see what direction it takes...

Current stop loss is at $0.795, last close at $0.81.

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Market Direction

Sunday, March 4, 2007

The psychology of the market has shifted, highlighted by The Stock Bandit in a post titled When Bulls become Sellers. Its an interesting post about the current market conditions and how traders change direction in uncertain times.

"Those same bulls are now much more likely to become sellers into bounces. Will they sell at the first sign of higher prices? Yes, some will. Will some of them try to endure this pullback but eventually capitulate and flee for the safety of cash? Of course."

Motivations and confidence in the market have altered. The bulls can't afford to be bullish all the time and a safer direction has to be taken when conditions around you change. Looking at the chart I posted yesterday, corrections occur and until the bull becomes a bear these conditions need to be traded as such.

Beginning of a correction, the rumblings of a bear market or a mere blip in a bull market are all possibilities. Most views that I have read point towards the bull returning and fear of the bear seems to be at a minimum.

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Chart Watch 2007-03-04

Along with the All Ordinaries, the handful of stocks I have been following have taken a hit this past week. I agree with MATT O'SULLIVAN - SMH article. I'm anticipating further declines but still old a bullish view overall. The market needs to have a shake out to keep investors and share prices inline. With that view CFX, CQT and IDL are being stopped out. We will continue to follow CHC, as it has been the standout performer of the list, and well above it's stop loss.

Below are two charts that support the view that the fall last week looks healthy, and that if it is a correction it has further to fall.





So how are other traders handling the current conditions? Right now I'm cashed up, looking for good buying conditions. I've found this correction profitable so far, having made 2 three day trades with IDL and EVE. I bought both for the same reason that they had both been sold off too much. Other traders took the same view with both stocks rebounding strongly the past couple of days.

Finding strong up trending stocks will be tough, but we'll run the scans early this week and see what is returned.

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