Looks like a strong finish to the year

THE All Ords spent six weeks trading sideways between 6000 and 6100 with a couple of short-term spikes above or below this range.

However this week it has finally broken above this range and if it closes near its high for the week then the next resistance level will be around 6300.

As of Wednesday the futures contract was still trading at a premium to the ASX/S&P 200, which is a positive indication for the market and it certainly looks like we will see a strong finish to the year for the market.

I have called time on my experiment with stops for the present, as indicated last week.

As of Wednesday all stocks held were above their respective stops with the exception of Artemis resources (ARV).

I decided that I would make an exception in this case and lower its stop to the November 27 spike low of 27.5c.

This spike low formed the day the price gapped down and the price has remained above this level since then.

I am treating it as a new trade, although if I did not already own it I would not have bought it as of Wednesday as it has not formed a buy signal for me.

You will just have to bear with me on this one as it is an aberration on my trading method, as has been the whole experiment with stops.

In the new year I will try to make time to go back over the past couple of months trading and compare what the results would have been had I stuck to my methods.

However it will be interesting to see if the stocks involved do fulfil their initial promise in the next month or two.

The problem for me is, when a stock is not sold on the break of its stop (however that is set), I find it difficult to decide whether to sell or not, as I am then in the position many traders who do not use stops find themselves when a trade does not move up as expected.

It needs only one stock to reverse and start to fall and it can have a big impact on the overall return on a portfolio.

It can turn a good return into a mediocre one, and if more than one stock reverses and they are not sold before the fall gets out of hand, then the portfolio returns can be heavily impacted.

The past couple of weeks have been rather busy for me and I have not given as much attention as usual to the market, to the extent that I did not do a market scan at the weekend and have not made any new trades.

This weekend however I will be doing a scan as usual and I expect there should be quite a number of stocks across the board setting up.

Next week I will list some stocks for your watch lists.

Finally I wish you all a safe and happy Christmas break.

Portfolio position at close of trade on December 20: Cash ............................. $268,187 Shares .......................... $149,330 Total ............................. $417,517 Starting capital of $50,000 in July 2006