Cracks appearing. Tue June 16

The US markets showed the first signs of weakness with their worst falls for a month of about 2%. The response here is measured with a 1% fall at 11.25 am, the market taking collective solace from the relatively light volume and lack of panic overnight.
Financials have outperformed resource stocks in line with other markets. I'm pleased I got out of most of my resource exposure yesterday. I belatedly hedged Wpl on the open at 4180 as it broke the 4200 support level. Vba has held fairly well to be down 0.5 at 33.5. I'm not as confident as most and have shorted Iag at 347.

12.42 Had to race out for an hour or so. Here's the Iag daily chart.

I sold when the stock traded through yesterday's low, it's dropped a few more cents since then. The stock made a lower high 4 days back and looking at the big picture, the high a few days before that was at the end of a corrective rally which completed below the early May peak.

I've also shorted Brambles at 590, a stock I was briefly short a week or so ago. It's a judgement call but I think that trading below yesterday's low of 591 is enough to create another lower high out of the previous 3 bars worth of choppy retracement. The bigger picture is similar to Iag with what looks to me like a completed 3 wave retracement into early June which was below the early May highs.

1.30 Out of Vba now at 32.5 (v 36) as it trades below yesterday's low. I'm kicking myself a bit because although the trade was ok in itself, it wasn't my sort of trade. With both Ozl and Vba recently I've decided to chase a breakout and paid the price. I like to have pretty tight stops whereas when you wait for strong confirmation you generally need to have wide stops because the stock will often pull back below the breakout before it runs again.

1.47 I've bought July 2200 puts in Nab at 90 as it makes a very similar set up to Bxb and Iag. My view is that the high reached 3 bars back was a lower high, we get confirmation with a trade below 2161.

2.28 The drop in the ASX 200 has reached 1.8% as regional markets fall with the Hang Seng and the Topix down over 3%. I have no long positions now and new shorts in Bxb, Iag and Nab along with some left over puts in Cba and Mqg. Mqg is down heavily today so the puts are coming back to life.

Macquarie had 3 days at new (recent) highs but couldn't make any progress. I'm hoping for a quick move down to the last support around 3600.

3.27 I've bought back a third of my Iag short position at 340 and some of the hedges in Ozl and Wpl at 92 and 4097 respectively. As the stocks fall the hedge on the call option decreases so I'm able to buy some of it back.

4.12 The market just chopped around for the last couple of hours. I bought enough Bxb at 588 in the match to cover dealing costs. Otherwise there were few changes.