Bank on it. Wed May 25

A slightly disappointing night with regard to stock indices although base metals, gold and especially oil rallied. But the bank selling continues apace with the majors off by more than 1% again.

The Asx 200 has traded below yesterday's 4596 low, reaching 4590 and is back at that 4596 low, down 33. This swing down has now formed 5 waves on the intraday chart so there is a chance of a bounce today. No sign of it yet though.

11.56 US overnight futures are down 0.8% on banking fears of legal penalties stemming from GFC shenanigans. Newly listed resources powerhouse, Glencore, is also trading below the issue price in Hong Kong so it's actually quite surprising that the Asx 200 loss is holding at 30 points.

Maybe the wicked hedge funds should have a look in their own backyard and leave our Aussie banks alone! Actually, I don't mind this weakness in the banks, I want to start a buy/write book and I might be able to buy at the bottom of the range.

2.16 Another new low at 4584, down 45. Asian markets have trimmed their losses to around 0.5% and the S&P 500 futures are not getting any worse but there's negligible interest here and stocks prices are ebbing lower.

3.58 The AUD is below 1.05 to the USD and there's a downtrend in place which could gather steam. The DJIA chart is quite similar to the AUD/USD in recent weeks and that also looks as if it's in the early days of a sell off. Here's the chart of the currency cross.

I don't have much idea whether there are implications for our market. There was a period a few weeks back where the currency acceleration knocked resource stocks hard but the sell off hasn't generated any buying yet. I'd have to assume that we'll continue to be under pressure. I have a few longs still and that's a cause for concern but they're not quite at stop levels.

4.15 Down 44 at 4585. When we were close to these levels in March, it seemed like panic selling; now lower levels look inevitable and it's just a question of whether there is a rally first.

Oh, and I stopped out of IPL at 377. Yesterday's low failed so it's shaping as an a-b-c correction. It's one of the few positive looking stocks in my watchlist so I'll wait for another opportunity.