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 Australian share index finished the week stronger following the major  European markets and US market, but still lagging behind their strong performance for the week. The rise in the markets follows the avoidance of Greek’s bankruptcy (at least for now). Interesting though the world focuses entirely on Greece and you hardly hear a word of the debt crisis the USA faces. If the US fails to raise the debt ceiling by August 2nd, it will have to inform creditors that it cannot pay its bills. I reckon the closer we get to the date the more nervous the markets will become.

Back to our share portfolio and the HSC. As mentioned last week WPL (Woodside Petroleum) had two closes below the uptrend band and hence triggered a sell on Monday. What I forgot to mention was that it showed already weakness early May triggering selling half of the position with a small profit. Overall though WPL resulted in a 3.6% loss. For this week I also have OSH (Oil Search Limited) with two closes below the trend band. For anyone that didn’t agree with my take on TCL (Transurban Group) it has now very clearly two closes under the uptrend band.

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What a week, not because of trading, but I am juggling a few things. I have embarked on a 10 day Bikram (hot yoga) challenge, which is doing one Bikram yoga class every day for 10 days. I am 4 days into it and I am feeling fantastic, apart from sore legs and feeling a bit tired at the end of the day. This combined with normal work load and family make things quite busy.

So I keep it short today, the Australian market made a new low during the week, but finished the week slightly higher than the week before. As I was still waiting for TAH’s (Tabcorp Holding) adjusted data, I noticed this week, that TAH was a sell on Monday, and the week before a sell half of the holding. Overall TAH was sold with a .46% loss and adds to the recent string of losses. Apart from this I have a number of stocks that have given the sell signal with two closes below the uptrend band. They are APA (APA Group), BLY (Boart Longyear Limited), TCL (Transurban group) and WPL (Woodside Petroleum). TCL is marginal and it really depends on the position of your trendband.

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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…

This was another interesting week in the share market. The XJO (Aussie 200) finished the week 20 points lower compared to previous week. Looking at the weekly bar chart, the bar for the week is a bearish outside vertical bar, which gives a bearish outlook for the next couple of weeks. Based on this my prediction two weeks ago was wrong. I had a look at my cycle charts and noticed that we are currently in the orb period of the 19 week cycle. Based on this it is very likely that we see another low somewhere between now and the first week of November, just in time for a nice rally leading into Christmas.

I expect the low to be somewhere between 4500 and 4375 points. I personally find cycles a great tool when looking at the overall market and there is high probability that the market follows the previous patterns. Looking back at the post from 6th February I mentioned that I expected the low of the 53 week cycle to be between February and middle of May this year. The final low was actually on the 21st of May and the market retraced just over 38%.

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