June futures expiry. Thu June 18

There were very large volumes traded on the open this morning as the expiry price for the June Spi contract was set. Unfortunately for me there was a jump in the market especially in the price of the banks on the open perhaps because given overnight weakness in Bhp and Rio they took up the slack of a higher open. The gains look fairly precarious though and the market is now (11.32) down 4 points, 20 off the high.

Mqg is the best gainer, up 100 at 3697 but it had also fallen the most so the rally looks more plausible there. I'd got rid of most of my puts yesterday but still have some interest in some weakness until June equity option expiry at the close of trade next Thursday.

I was interested in buying Fortescue last night and although it opened slightly stronger it then pulled back and is now consolidating at 372, down 5. I'm watching for a buy signal on the 60 minute chart.

I've added a new long position in Transurban, which has been shaping up for a while. I'm long at 412 and 415 for an average of 413.5. Here's the daily chart.

It's in a trading range over the last 6 weeks but is making higher lows. It has also been making lower highs and need to push through 420 then 425 to make a higher high. However, the larger context is of a completed correction (possibly) which has retraced about 61.8% of the March rally. This fibonacci ratio is one of those usually used as a guide to the size of the correction you might expect after a move up or down.
The other trade this morning was to sell out the last of my Wpl June 4400 calls at 6 (v 130), the odds of them coming good are tiny and the only buyers now are short coverers who are happy to pay a little more than they're worth to close our their positions.

1.42 The market is now down 19 points, looking ready to weaken further. Cba which was up 70 earlier is only up 7 now. Ozl is weaker but Tcl is steady at 415.

2.13 I've just bought a few June 3800 puts in Mqg at 157. I've bought these on a 60 minute signal. The stock rallied all morning and is now slipping below the lows of the strong early bars. Since there's still a fair bit of downside momentum I think this is worth the risk.3.50 The market has been up a bit, down a bit in the last hour or so. I've scanned through the stocks in the top 50 index and there are a lot more bearish than bullish charts. I'm nervous about going into Friday short with the market having been soft all week but although I can obviously see the chance of a rally tomorrow I can't see any standout reasons to cut my short positions. I've been broadly right this week but in the wrong sectors as the financials have been among the better performers in a falling market. Although I could see potential weakness in Bhp and Rio, for example, there was never an opportunity for me to get short at levels I was comfortable with. The nature of these stocks is that there are a lot of gaps because they're also listed and trade heavily in overseas markets, the same holds for Newscorp, and this reduces the efficiency of my trade entries.

In the Bhp chart above, there was a slightly lower high and an inside day last Friday which put me on the alert for a sell signal but the opening gap down the next day was more than a dollar from the close. In this instance it still would have paid off to take the trade but if you're always giving away a head start then over time your trade edge will fade.

4.13 It was a positive close with a ten point bounce on the matchout.