The Home Trading Blog

Welcome to another one of my blog updates. It is getting more challenging for me to find the time going through the ASX 100 stocks and to update the portfolio over the weekend. As many of you are aware I have started trading Forex on an intraday basis during the week. This for me is enough looking at charts and I like to spend the weekends with my young family.

I have decided to stop the weekend HSC updates and start posting charts of some of my Forex trades I have taken during the week. I think this blog showed that the method taught by the Home Study Course is indeed profitable. However in times of sideways moving markets it will give more entries (than in an upward trending market) that result in a loss. Personally I believe in times like this it is best to sit on the sidelines, use smaller position sizes or look for different charting techniques and shorter timeframes. The challenge here is that you will miss the point when the market starts trending up again.

I will however continue to report on the current positions in the portfolio. As I am using NinjaTrader for my intraday charting I have also decided not to renew my Market Analyst subscription and have to base my exit criteria on trendlines rather than the trendband. I have found that when it comes to intraday charts NinjaTrader is much more responsive and reliable than Market Analyst. The only downside is that it is lacking some of the Home Study Course tools like trendbands or Gann swing charts.

There are a number of stocks that I have added to the portfolio since the last update. They are ANZ, BOQ, ORI, WES and WPL. I also closed the position in TEL as it had two closes below the uptrend band. The transactions were:

17th October: Buy 472 ANZ at 21.20
17th October: Buy 1250 BOQ at 8.00
17th October: Buy 401 ORI at 24.93
17th October: Buy 313 WES at 32.00
17th October: Buy 281 WPL at 35.65
28th October: Sell 5848 TEL at 2.00 for a profit of 16%

Before I finish this post a big thank you to my readers out there for your support and your comments. As I said I will continue the blog, just in a different format.

This leaves the portfolio as follows:

I am up to the portfolio update 100 and it is good to see your comments indicating that you appreciated what I am doing. I am hopeful the markets do their bit to celebrate this post and continue their way up. After having a really good week the week before last, the Australian share market continued to advance, although by a much smaller level. This led to many more buying opportunities for next week and could mean some healthy profits in the near future. If the indicators are wrong however it will mean that the portfolio goes into negative territory for the first time.

Before I went away I mentioned that I would like to change the way I present the portfolio. Rather than always buying 10k worth of shares, I will use a percentage of the capital I have available for any purchases. This will give a better picture about performance as any profits are re-invested. Unfortunately having just returned from holidays I have been a bit busy this week and will set this up in the next two weeks. So for now any news buys will still be added to the existing portfolio. I will however transfer them to the new one once everything is set up.

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The market feels like a roller coaster ride at the moment. After continuing the slide at the beginning of the week, the Australian market posted some strong gains at the end of the week and finished the week close to where it started.  Looking at the low from May last year, the market has retraced by over 50% of its last rise. This increases the probability that we are close to the end (or at the end) of the 53 week cycle. Nothing is for certain though and anything can happen at any time.

There is still a lot of uncertainty in the market and an escalation of the war in Libya or the situation with the nuclear reactor in Fukushima can cause the market to drop more even more sharply. This makes it very difficult for investors and it can be a frustrating time. However it is also a time where there will be plenty of opportunities to enter the market at a bargain price and we should see many more buy signals triggered over the coming months.

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I was surprised this week to see the blog portfolio profit only marginally lower (7.49 %) compared to previous week (7.52 %). Looking at the XJO (Aussie 200 index) and at my charts for the week I would have expected a bigger drop. The Australian market lost further ground and finished the week more than 1 % lower. Comparing this with some of the major markets overseas (e.g. US and Germany) you will see that the German and US markets have passed the April 2010 high already, whilst the Australian market is still more almost 400 points short and has some catching up to do.

I mentioned last week that I will sell DJS (David Jones) and JBH (JB Hi-Fi) and one of my readers pointed out that DJS should have been sold already on the 22^nd October. I have missed the swing low that was created by an outside bar on the 8^th October. I have adjusted my transactions accordingly and turned a 1.5 % loss (selling it last Monday) into a 7.26 % profit (selling it on the 22^nd October).

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The XJO finished the week just over 1% higher than the previous week. I still think it is just a temporary rise and we will soon see the market declining some more. Last week was a great week to lock in some profits the portfolio had made since I started. I closed 4 positions, which were AMP, ANZ, IAG and WES.

The total realized profit (closed positions) is almost 58,000 dollars, which is an average profit of 48%. I am planning to add this figure to the portfolio as well. You can see the profit of the current positions has declined to just under 16%, which is still not too bad considering all positions have been in the portfolio less than a year.

Back to the transactions for last week:

8th February: Sold  566 WES at 27.25 for a total profit of 54.3%
8th February: Sold  196 WES at 27.25 for a total profit of 6.86%
8th February: Sold 1965 AMP at 6.15 for a total profit of 20.82%
8th February: Sold 2618 IAG at 3.84 for a total profit of 0.52 %

There won’t be any other changes to the portfolio next week. However looking at the ASX 100, I have following stocks fulfilling the sell criteria: LLC (Lend Lease), DUE (Duet Group) and CGF (Challenger Financial Services).

The portfolio as of 12th February is: Read more…

What looked like a recovery half way through the week ended up with the XJO taking out the low from November 2009. All in all the XJO lost another 1.2% compared to the previous week. Interestingly enough the blog portfolio profit rose slightly. I am getting asked a lot, what I think the market will be doing over the coming months.

I mentioned this before, we are currently at the end of a 53 week cycle and I expect the major low to be somewhere between now and the middle of May. There seems to be some major reversal days at the beginning of April and time will tell when the actual low will be.

We are certainly getting a lot of sell indicators at the moment and I am happy to take them to lock in the profit. Also many of the stocks I am watching are now in a confirmed downtrend. It is just a matter of waiting until they reach their bottom and then get ready to climb up again.

Last week we finally sold PDN (Paladin Energy Ltd) for a tiny profit of 1.3%. The transaction was:

1st February: Sold 2747 PDN at 3.69

Looking ahead to Monday, we will sell following: Read more…