Meltdown. Mon Mar 14

The tragedy in Japan has cast a shadow over markets this morning and there is massive concern over the stricken nuclear power plants. After 50 minutes, the Asx 200 is picking up in a volatile session but the losses are high, down 60. The morning's low was 4564, down 80. The Xjo chart has plunged towards the lows of September and November.

I've put on an intraday short in Lynas but essentially, it's a question of buying back the last of my shorts. For example, I thought Perseus might outperform on the basis of a rise in gold overnight and I bought back some shorts early at 289. That was a wrong guess and I've bought the rest back at 281 and then 271. I sold out the last few Sbm at 191, which was down 4. I hedged the last of my Fmg puts (trading at parity) at 575 and have done the same with the Osh puts, buying stock at 648. 

I'm running a small short position in uranium miner, Paladin, which has been particularly hard hit by the meltdown fears. That's at 417, down 56.

The only oddity is Aax, forgotten about in the mayhem. That's down just 7 at 334. I bought a couple of shorts back at 333.

Boart Longyear is broadly comparable and this stock is sinking; I think Aax will catch up.

11.09 There are snap liquidations occurring here and there. Pru plummeted earlier from 280ish to 268 in a few minutes and Lnc did something similar.

I'm planning to sell some index puts soon but I want to see the US have more of a correction first so it may not happen until late this week, early next week.

I guess there could be some intraday buying opportunities today but I'll be waiting until Japanese and Chinese markets have been open for a while.

Out of the Pdn short at 411.

11.32 The Japanese market is down 5.5% and would be lower but many stocks have fallen daily limits and can no longer trade. The BoJ is going to inject 7 trillion yen to soothe markets.

The Asx 200 is stabilising, down 51 now.

11.35 I couldn't wait and punted a few longs as the index showed signs of recovery. Bsl and Ost are doing ok, helped by Japan's misfortune as expected power rationing is anticipated to limit steel production there.

Long both, although I'm not sure how long I'll hold them for. They're both making reversals after nasty downdrafts. Also, the Labor government has been hammered in opinion polls over the carbon tax and given their record of backflips, there's a silver lining for the big emitters.

Here's Bsl.

And Ost. This hasn't yet held the reversal but it's a good sign.

Cnbc are talking about the situation improving at one of the Japanese reactors, obviously not reliable news but could trigger a turnaround.

11.54 The index is just down 27 now. I'm out of the Lynas intraday short at 187.5 and long a few other things on a very short term basis....Awc, Fmg, Ipl, Lnc, Pdn and Wsa.

12.24 The Nikkei is down a bit over 4% and the early mark in the HSI is down less than 0.5%. I'm long a couple more things intraday but have been fairly quick to take a few off.

The market is down 36 and I'm watching it pretty closely on a 10 minute basis. I'm looking for another 15 points on a 5th leg up. If it can't hold that and expand into a bigger scale bullish pattern, I'll be quick to dump the longs.

12.41 News continues to come through about the devastation in Japan and it's quite shocking but markets are hard nosed and other Asian bourses are steady as investors calculate that competition will be reduced temporarily.

Chinese steel makers are rallying and that has helped Bsl and Ost to advance. Bsl is up 8.5 at 194 and Ost is up 2 at 242 and starting to confirm the idea of a bullish reversal day.

1.18 The 10 minute Xjo chart couldn't make a new high; there's a small chance it can go again but it looks more likely that the index will just chop around now. I scrambled out of Fmg for a few dollars, Pdn for square and I'm still in Awc, Bsl, Ipl , Ost and Wsa but have taken some profits in those ones.

2.23 The Asx 200 is pushing the day's highs again and a break of 4620 would signal that the bullish pattern is playing out; it's at 4617.

I'm continuing to punt about intraday, essentially from a long perspective while the short term chart is positive.

3.03 The index is in no man's land, down 32 at 4613. The steel stocks are carrying on. I sold half the Bsl at 193 and 195 (v 190) and I'll hold the balance overnight. I sold a couple of Ost at 243 (v 235) and I'll keep the rest of those too.

I'm unconvinced about the other positions and I'm letting those go on rallies.

I don't usually do as much intraday trading but the opportunities are good when the market is in a volatile mode. I find that I'm generally better in the morning session; I can get jaded and jumpy by the afternoon and it's better to just ease it down.

3.36 The index has finally pushed through the short term resistance although the picture isn't much clearer. I'm looking at the Xjo 30 minute chart and the rally has stopped short of Friday's swing low. I will be a little long tonight but I'm hoping my stocks outperform because there's still a chance of another quick move to a new low.

Nevertheless, this is the first higher low and buy signal on this scale after 4 heavy down days.

4.17 No real change and although there's a minor buy signal, it's a powerful sell off so it could go either way.

I'm slightly long though. The steels finished well, Bsl up 14 at 200 (sold a very small amount there) and Ost up 4 at 244. I've got modest longs in Awc, Ipl, Tol and Wsa and am short Aax and a few Lyc. Bought a few more Aax at 329ish average.

The Asx 200 finished down 18 at 4626, just below the 4630 low from Friday.