The next phase begins. Thu May 28

Today is expiry day for May stock options and it often marks the end of one trading phase and the beginning of another. It looks to me as if the xjo has completed a shallow 3 wave rally and should break support in the next few days.It's a very similar chart for the Dow which was down 2% last night amid more worries about the bond market. Financials are weak again in our market and my shorts are doing well. I've added to my puts in Macquarie with a few June 3000s at 153 as the stock makes a new low.On the long side, Lihir gold is up 2% and Incitec Pivot, Ipl, is firmer. I cut Mig at 143 (v 142.5) as it dropped like a stone. I had sold a few shares y'day at 153. It's now 139.5.That was a small position, fortunately, but Leighton's has been the fly in the ointment because it's my biggest mover having fallen nearly 4%. It does tend to be a bit illiquid but the size of the move is a little surprising. I'm holding on here, because I think that it should hold support around 2182 or only make a marginal new low if it continues to fall. I'm reluctant to put on any fresh positions as things can be volatile on expiry day. I like Bsl, it's accelerating, but I might have missed the boat in the short term.

12.28 Decided to cut Lei at 2216 (v 2300) as the fall gathers pace. I like the set up still, it was just one of those things that it reversed, and if the stock can hold the recent lows and show strength I'd look to buy back in.

Sold out a couple of the Qbe June 2100 puts at 210 (v 82). I've been better at running my positions than usual, something I've been working on, but I wanted to take something off the table.
12.56 Sold a couple of Cba June 3500 puts at 159 (v 112) for the same reason.

1.33 I still had a few Mqg May 3200 puts left over. I've bought stock at 3026 to hedge them. The puts will exercise tonight to sell out that stock at 3200 so the effective selling price of the puts is 174 (v 135) in addition to the profit on the stock trade which I wrote about y'day.

3.09 Sold a couple more Cba June 3500 puts at 150 (v 131 - different purchase).

Also bought and sold some Woodside Petroleum, Wpl, for a small gain. I'd like to go long this but I think I need to wait until tomorrow, if there's another up day.

3.16 I sold out a few Cba June 3500 puts today because we're on support. However, if we fail to hold this level there could be a fast move down; so I've bought out of the money puts which have more leverage to a fast move. They're the June 3300 puts at 72.
4.10 Ipl and Lgl closed near their highs while Cba and Qbe were close to their lows. Mqg rallied a little off its lows but is still down 2% on the day. Overall, the index fell 45 points.