Negative divergence. Thu May 21

Well the Dow actually made a new high last night by about 3 points then promptly reversed to close 168 points away from that level. Meanwhile, the S&P 500 also rallied early then reversed but it failed to make a new high. There's a charting idea called divergence where, say, oil might make a new low but oil stocks, which would have been tracking the oil price, make a higher low. In that case, positive divergence, you might decide that a short term low had been made and that you could cover any short positions. In last night's instance, you'd call it negative divergence.

Gold ran again and I've gritted my teeth and got back into lgl. Here's the daily.

I've bought June 300 calls at 22 and some stock at 314.

1.05 Sold the lgl at 315, the calls are enough.

1.40 Unwound mqg at 3390 (v 3426) and the puts at 90 (v 108) as mqg is still undecided but looking like it could fall rather than continue its retracement. Cba is down 60 today although it's still in a trading range.

3.20 Just buying Macquarie Infrastructure Group at 142.5. Here's the daily. It looks like it's ready to run above 150 after a shallow pull back.

The 60 minute chart shows a buy signal at 141.

3.40 It's an odd day today. We're almost breakeven after having been down 30 odd points earlier. The Nikkei and the Hang Seng are down closer to 1% while US overnight futures are a little weak. Given that we've already rallied over the last couple of days and given the nature of the fall in the US - not the amount but the size of the reversal - it's quite surprising that we're doing so well.

4.14 The close was down 11 points or 0.3%. Long lgl and mig and short cba and qbe.