The Home Trading Blog

First I like to wish everyone a Happy New Year and all the best for your trading activities this year. This is always a good time to take a breather and take stock of what you have achieved in your trading (and other areas of your life) during last year. It is also the time where you need to set the goal posts for the new year. You may want to rethink your trading strategy and set clear and precise targets what you want to achieve.

Have a good look at your portfolio and set yourself a minimum dollar value of what your portfolio will be worth at the end of the year. Make sure the figure you come up with is ambitious but also realistic. Write down this figure on a piece of paper and make it your daily ritual to look at as if you have achieved this already. I write a few sentences around this and read them daily. You need to define a date and the value. And for best results write down what you feel when you have achieved this.

Here is an example: It is the 23^rd of December 2011 and I am looking at my share portfolio for the margin lending account.  The portfolio is worth more than 500,000 dollars. I feel fantastic and look forward spending Christmas with my family.

I like to say more than x dollars, this means I am specific on the amount but I leave room to exceed my goal. This has worked for me many times in the past. If you are not clear around goal setting, I recommend seeing a Life Coach, who can help you with this.

Enough about goal setting now back to the blog portfolio. I took a break updating the portfolio over Christmas and we haven’t missed much. Traditionally the markets are very quite during this time of year and I don’t expect much movement this week either. The Australian share market is still lagging behind some of the other major markets which all reached new highs.

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Just as you think you have it all figured out, the market proves that anything is possible. I am referring to last week’s post, where I mentioned the bearish bar and expected the market to continue to fall. Well the XJO had a good week and equalled the high of the week before finishing the week stronger compared to the previous close. I still think we will see another decline as part of the final decline of the 19 week cycle. Time will tell.

In line with the XJO, the blog portfolio posted another strong week with the profit of our open positions up to 4.86%. There were no further additions to the portfolio because we have reached our maximum number of 20 positions in the portfolio. For the week ahead I have identified several buys. All of them have been buys in the last couple of weeks. They are CWN, ERA, LEI, TOL, WAN, WOR and WPL. Read more…

The XJO (Aussie 200) has broken through the trading range I mentioned last week and finished the week at 4640. With the international markets finishing higher as well, it looks more and more likely that we are in for a nice rally towards Christmas. Having said this one of things I have learned reading “Trading in the Zone” by Mark Douglas, is that everything is possible in the markets. It all comes down to probabilities and at the moment the probability of a rally is higher than the chances of another steep drop.

Our portfolio profit for the open positions rose from 3.08% to 4.87% with only 6 positions in the red.  Other than that there was no movement in the portfolio as we have reached our maximum of 20 open positions. Technically there is one new buy for the week. I have CPA (Commonwealth PPTY Office FD) fulfilling the rules according to the HSC. However I consider the stock to be in a sideways movement and therefore having limited profit potential. Read more…

I feel like I sound like a broken record, but once again, there was very little movement in the markets last week. There was very little change in the Australian market, with the close on Friday just being a few points higher than the week before. Most interestingly though the XAO stayed in the trading range that I mentioned last week. The high in the XAO was 4598, which is the same than in the week ending 17^th August. The other high in this range was on 25^th June with 4622. If this level gets broken, we can expect a rally up. On the other hand if the resistance level stays intact, we can expect a 300 point drop over the next three to four weeks.

The blog portfolio finished the week marginally lower than the week before. There were no buying or selling transactions as we have reached 20 stocks in the portfolio. Having said this, I have found 12 stocks meeting the buy criteria according to the HSC. I have BLD (Boral Limited), BOQ (Bank of Queensland), GFF (Goodman Fielder Limited), LLC (Lend Lease), MAP (Map Group) and WOR (Worleyparsons Ltd) joining the list of buys for the week. Additional I still have AWC, BEN, BXB, LEI, SUN and TOL meeting all the rules.

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We had a very successful last week with the major markets posting some good gains. This reflected in our portfolio and our open positions are up almost 3% compared to the week before. After another strong showing of the overseas markets on Friday, we can expect a strong start on Monday. In Australia the XAO closed at 4541 and I expect some resistance at the 4620 level as this is the high of the current trading range. If this gets passed easily we might be in for a good rally in the coming months.

Last week I mentioned LEI (Leighton Holdings Ltd) and TOL (Toll Holdings Ltd) as a buy and I have added TOL to the portfolio to complete our 20 open positions. TOL’s risk war marginally lower then LEI hence my decision. Due to the strong markets there are still more stocks fulfilling the buy criteria according to the Home Study Course (HSC). For the week ahead I have SUN (Suncorp Metway Ltd), LEI, TOL, BXB (Brambles Limited), BEN (Bendigo and Adelaide Bank Ltd) and AWC (Alumina LTD) as buys. Upon further analysis I have noticed that BEN was actually already a buy on the 23rd August and AWC on the 16th August. My apologies that I missed them during my holiday.

The transaction for last week was:

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Back home again after what was a very relaxing holiday in Chile. It is nice taking some time out and when you come back you look at things with fresh eyes. Whilst the markets have fallen in the three weeks that I was away, looking back it is very clear that we are in a sideways patterns since May this year. The range of the swings up and down seem to get smaller and we can expect bigger moves once either support or resistance levels are broken.

If the market breaks to the upside, then we are well positioned with now 19 open positions in the portfolio. Last week was another uneventful one for the portfolio with the value of our open positions edging half a percent lower. With ASX (ASX Limited) we added another position and what I like about this one is that the risk for ASX is only 8%.

The transaction was:

23rd August: Buy 330 ASX at 30.26

Looking ahead to next week, I have TOL (Toll Holdings Ltd) and LEI (Leighton Holdings Ltd) fulfilling the buy criteria according to my analysis. I still need to analyse the risk of both before I decide which one to add as I don’t want to have more than 20 open positions in the portfolio. ASX is still a buy as well. Outside the portfolio I found one stock meeting the sell criteria, which is COH (Cochlear).

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