Working for the Yankee dollar. Thu June 4

Looks like a few favours were called in and the US dollar was able to bounce back strongly on the back of comments suggesting Asian nations would stick with the world's reserve currency. Gold, oil, base metals and the Australian dollar fell as a result.

The ASX 200 is down 65 points at 11.25 am just off its lows with financials and industrials firm at the expense of resource stocks. Bhp is down 4% and Rio 5% for example.

I've sold out of my last Mre at 89 (v 71) but otherwise I'm just monitoring things. Qbe is one of the few financials to be down, sitting at 1892 below last Thursday's low. Fmg, Ncm, Ozl and Wpl are all down about 3% but are not huge positions and I'm not ready to cut them yet. Ncm is probably the closest, while it's still well above the previous swing high of 3249 there's been a major loss of momentum. If you take this is as essentially one move from mid May then there could have been 3 waves with today being the start of a 4th wave correction. If that scenario is correct then Ncm could chop around for 4 or 5 days so I wouldn't mind getting out of the last of my calls on some sort of retracement.

The new positions I put on yesterday afternoon have gone well, with Gmg up slightly at 30.5 despite Mirvac Group - another property trust - announcing a $1bn plus placement and Tcl also up at 419. I wish I'd also bought Telstra yesterday because it gave the same signal. I was concerned the move would be too slow but it's rallied from 316 to 324 which is as good as the other two and it's very liquid. I would have been better to get out of Ncm - I could feel the loss of momentum but was trying to play things by the book. Oh well, it's a fine line, listening to your intuition but not confusing it with wishful thinking.

11.45 Just gone long some Mqg at 3708 as it looks like it might have a go at the 3796 high from early May.

The 60 minute chart is positive, with yesterday's high of 3705 having been breached. There's an interesting situation in Macquarie where there's been a very generous Share Purchase Plan offering new stock to existing retail shareholders at a price of 2660. A friend of mine had less than a thousand dollars worth of stock but was offered up to $15,000 worth at the heavily discounted price. These shares come on the market tomorrow so the stock could come under heavy selling pressure. Therefore my trade is strictly for today. 2.27 Mqg couldn't decisively push through Tuesday's high of 3726 which was the next resistance so I've tipped out the extra stock at 3670 for a quick loss but I've still got the June 3200 puts. They're a long way out of the money but if the stock is going to have made a lower high relative to the early May peak then there could be a sharp fall. I'd probably add to my small short position tomorrow on weakness. I also sold out a quarter of my position in Gmg earlier at 32.5 (v 28.5) and they're now up at 35.

2.35 I decided to punt that reversal scenario in Mqg as it's dropping alarmingly. I've bought some June 3500 puts at 105. The sell signal on the daily is at 3553, looking at the chart just up the page. I'm only going on the failure in the 60 minute time frame but given the situation regarding the new retail shares I'm prepared to give it a go - and probably should have shown more caution with the stock purchase earlier!

2.51 Sold out of Tcl at 415 (v 410) as the stock reverses to be unchanged for the day after hitting 422 earlier. Also out of the last couple of my Ncm June 3282 calls at 146 (v 136) although hedging cost a little.

3.03 I'm short Qbe but have bought back some at 1891 because the fall has made my minimum objective and I'm not sure how much I want to push the trade.

I see this as a choppy fall in 5 waves. The 5th wave which started in the second half of May subdivided further into its own 5 wave structure. So there was a starting point just under 2150, a small fall then rally and a convincing fall to 1900. A three day rally made the 4th wave and today we've made a new low to possibly complete the pattern. This is not the level of complexity I'm normally fussed about but sometimes once something has formed you can impose a pattern that's useful for decision making. The upshot is that I didn't necessarily see the opportunity for a lot of momentum here which is what has happened so far today. There was an early fall to around 1890 to make a new low but then a narrow range while the rest of the market has been dropping. I'll probably square this up later on.

3.45 Out of another quarter of my Gmg at 35.5 (v 28.5).

4.15 The market finished with a loss of 83 points or 2.1%. I squared up Qbe buying at 1890, the equivalent of selling out my June 2100 puts at 210 (bt at 90 avg). I'm still long some Fmg, Gmg, Ozl and Wpl and short Mqg which closed close to its lows at 3620.