Changing of the guard. Mon June 22

The US had another muted session with early optimism fading as the market closed largely unchanged. It looks like we're following that lead as we're now up 9 points from an early high of a 31 point gain.

This morning I've done a couple of small trades. I sold out of Amp at 516 (v 510) as the stock hit resistance at 519 without breaking through. Given the average overnight lead and no obvious heavy buying I thought I'd just get out. Something similar happened in Fmg where there was a 60 minute buy signal that led me to buy at 390 only to sell out at an average of 395 as the rally faded. The daily chart looks more like a retracement rally, hence my caution.

One of my existing bank trades has come good. Mqg is resuming its downtrend after the retracement rally from the 3600 support level. It's down 44 at 3681 right now and my June 3800 puts are performing. 12 pm The headline refers to sentiment. We've had a sustained rally from early March and I have been seeing signs of change in the charts. Relative laggards, ie defensives, are starting to look better again while resources began falling last week and banks look very tired but are still generally squeezing up. I've obviously been trying to force the trades in the banks but I do think they're close to a turning point. They're now more expensive than most brokers' valuations but the buying thesis is that the recession hasn't officially arrived and may not and that pricing power has increased with the demise of the smaller competitors. A respected veteran bank analyst has just put a sell on the sector on the basis that the recession will come, bad debts will increase and valuations leave little room to move. Those are the two forces at play and I'm obviously taking my cue from chart patterns but it's interesting that there is a catalyst for a sell off if optimism about the consumer falls.

1.56 There's not a lot to add. The Xjo is now up 16 having worked it's way back to square or a tad down shortly after noon.

3.43 Having to stop out of my Nab July 2200 puts as the stock makes a new recent high.I've expanded the chart so it's easier to see; I went short on the 4th bar back as the stock made a new low - although still within a trading range - but it has now negated the signal trading above the previous high of 2239. Out at 62 (v 90).

Macquarie has reversed on this choppy day and now looks like it could make a 3 wave rally up towards the old highs. While it's still below Friday's high I'm keeping the short but I'm not optimistic. Meanwhile, Fortescue held the intraday break around 390 and has rallied again to be near its highs at 406. I've made a little more with another day trade here.

4.10 The market is finishing on a reasonably buoyant note with a gain of 19 points.