A moment of indecision. Wed Apr 22

There's been a little bit of "yes, no, wait" style indecision in financial markets over the last couple of days and the US rallied back 2% last night with gold down again and oil up a bit but base metals were mixed. The chart of the Dow Jones Index reflects that.Up until two days ago there was a pattern of higher lows and higher highs but with fading momentum so that the new highs were marginal and the lows were getting closer together. Then the 4% down move formed a lower low for the first time since early March. I suspect that the rally last night won't push on to new highs and we could have a short term change in trend forming.

The Australian market is behaving in a very similar manner although we haven't had a new low yet. The rally today is muted and at 11.24 am we're now only up by 2 points. It's made for choppy trading and false breaks but if the market does start to move down there should be some good shorting opportunities. Because option premiums are cheaper now it will be a lot easier to play the short side than it was between October and March.

I've cut mgx, at 61.5 (vs 73.5) which was a poor trade from the word go. Should have cut immediately as I realised my mistake after about 20 minutes. I've bought some Toll Holdings - a transport company. I paid 627 for tol as yesterday's strength continues. I'm assuming that the correction is over having failed to go below the recent low at 600. Here's the daily.12.30 Just bought some tls at 325 as I'm taking the view that it has found support just below this level having potentially made a lower low and could swing up towards recent highs.

The 60 minute chart shows that tls is starting to make higher lows and trades in the high 320's would confirm the short term bullishness. There was a similar sort of set up a few days back which failed to develop further. Nevertheless, the subsequent fall was minor and I'm willing to give this a go. One thing I'm trying to do at the moment is get into positions earlier and to that end I'm willing to accept less certainty especially if there's a level nearby where I can stop out if I'm wrong.

2.47 Not a lot happening. I've decided to neutralise mqg by buying some stock against my puts as I think it's having a retracement rally which has probably got another leg up to come. Here's the 30 minute chart.

My puts expire tomorrow but if the stock runs up they'll probably go out worthless. However, my hedge would cover most of that and if it goes according to plan I'll try to buy some May puts, with 1 month options often being at their cheapest on expiry day.

4.25 Bought wes April 2081 calls at 38 as the stock rallied through 2100. They expire tomorrow and I'll be in front if the stock is above 2119 with my downside being the 38c paid. Here's the daily showing a stock that's strong and ignoring the pullback yesterday.

I decided to go long this when the stock rallied above 2100, knowing that with expiry tomorrow I could buy April options for not much more than parity. Here's the 30 minute chart.

Wesfarmers seems to be regaining some credibility in the market after having been out of favour over a boom time Coles acquisition.

Broadly the market traded in a tight range for much of the day as Asian markets were unimpressed by the US bounce and US futures were lower. I'm leaning to the bearish side but I think the market is oversold in the short term with a better than even chance of a rally tomorrow which is why I've bought some cautious longs.