Cross currents. Tue Mar 8

It's 11.16 am and the Asx 200 looks set to force its way into the black fairly soon after falling 25 early to make a new low and then failing to find any sellers. It's at cross purposes to overnight leads because the index fell hard yesterday. I'm increasingly confident that there's weakness ahead for most indices but, on the day, I need to tread carefully.
The German Dax index has been one of the best performers but the chart, like so many others, looks weak now. The first leg down moved the chart back into congestion, the recovery failed and now support is only just holding.

The gold price spiked up and then fell back in a sign that it could be running out of steam. I'm keen to lighten my gold exposure and have sold out the Iau at 197. I did get a few away at 201 last night.

Airline stocks ran up in the US, with oil and resource stocks slipping back, another sign that some switching is on the way. I've still got a few Qan March 225 calls and I've bought some stock at 229. It's a potential double bottom with a tight stop at around 225.

11.33 I've tended to buy Fmg near the 640 support but it looks more and more like a neck line and it was interesting to see it fade away yesterday afternoon. I'm short some at 646 and because I'm, (a) worried about a squeeze today, and (b) think there's scope for a rapid move if support fails, I've also bought March 650 puts at 19.5. Sector outperformer, Ago, has confirmed a sell signal today while Gbg and Mgx have been trending lower for a while now.

Here's the daily for Fmg.

12.07 Sbm has been downgraded by Deutsche bank on valuation grounds and because of production problems caused by heavy rain. I sold a few more at 220 just in case. I'm slightly uncomfortable (to have so few) because the chart looks good still.

I'm out of the last few Boral puts at 15 and bought back the last of the Osh short at 671.

12.15 The Xjo is in the black, up 3 at 4801, helped along by a reversal in fortune for the banks.

1.23 The momentum has faded and the index is just chopping around the breakeven level.

I reassessed Sbm and bought back stock at 220.

Fmg broke the two most recent lows which were at 643 and 639. The low so far is 636 and although the stock has bounced a cent or two, there's little enthusiasm to buy and the chart looks ominous.

2.20 Ooh...torn. The Asx 200 has a set up I'd generally be dead keen to buy but I'm pretty bearish most European and US indices and don't want to buy much.

The index is up 14 now and my banker, Fmg, has recovered. I bought a few back at 641.

Aristocrat is having another crazy day too. It traded at 311 early and has reversed to be bumping against resistance at 336.

4.15 The index didn't accelerate away and the short positions were pretty stable; Fmg finished at 640, for example. The Asx 200 closed up 10, at 4808, and it's a reasonable contrarian buy here, I think.

That said, I'm still skewed to the short side but I'm using short dated puts in Fmg and Osh.

There seemed to be a large portfolio in the market. There was a big line of Awc on the offer at the match, so I closed out the short at 535. Some of the other positions jumped around too. Challenger had a strong reversal to finish up 4%.