Asset allocation. Thu May 6

3 pm A late blogging start for me today as I've been out of the office for a few hours. The market is down almost 2% and worse than might have been expected with the banks leading the retreat. There's more bullishness around for the US dollar lately and the AUD failed to breach 94 cents so it's possible that the trade of being long Aussie banks and gaining the double whammy of rising currency and rising stock price is now being unwound - and unwound rapidly as is the nature of these things.
I did alright with my Cba puts although I got out too early. Still, the average selling price, including a small amount yesterday, is 352 versus a purchase price of 152.

Generally, the resources sector is outperforming but still a little weaker. Awc is up though and I sold a few at 157.5 along with some Bsl at 252. I'm less enthusiastic about these stocks today because they're countertrend trades and time is as much a factor as price. I have nibbled at another trade of this type though, buying some Ozl at 102.5 because there's a close stop at around 96.

4.16 Got out of a few positions, both long and short, as I want to take stock of things. Sold out the last of the Awc at 159.5 and bought back Fxj and Cgf today. The market closed down 2.2%, still with lots of downside momentum but not far from February lows and the potential for a reversal day.

4.21 Yesterday I wrote that it wasn't a good day for shorting while at the same time suggesting there was still plenty of downside momentum. I meant that it wasn't a good day for me to short as I prefer to sell into retracements. What I did instead was to hold on to my existing shorts which were performing well. In those situations where my method is missing opportunities, I'll tend to look for day trades in stocks or the spi to compensate.