It was French banks to the rescue with a proposal for a Brady bond type workout which would enable a rollover of Greek debt held by private banks. Although the Greek austerity vote is not done with – it's tonight – it was enough for US markets to rally 1%. The estimate is for a 1 vote majority to gain passage for the austerity bill so it's a very tight call.
The Asx 200 is almost certain to hold support today after coming within a whisker of it yesterday and the question is whether to square right up as a Greek yes vote might lead to a serious short squeeze or to hold tight. Most of my shorts are held via puts so, pre-market, my inclination is to watch and wait. The Dow needs to rally 200 points to make a minor trend change and even then it would still look like an a-b-c retracement.
11.00 Up 34 or 0.8% at the end of the first hour. About right, I suppose. With so much uncertainty around and the year end coming up, we were unlikely to see strong buying. The banks are doing pretty well, mind you, as the US financials had a good rally and Basel reserve requirements are less onerous than feared. CBA is up above 5100 and my July 5050 puts are back down to the mid 60s. I'm hoping for a lower high on the daily. If I don't get it, I'll need to look to buy stock on dips and try to ride the rally.
11.25 On the smaller scale, the XJO needs to push above Friday's intraday high of 4521.5. The 60 minute chart shows that today's action is neither here nor there.
12.03 Gains are fading as Chinese markets are mixed. The HSI is up 0.4% and the Shanghai composite down about the same amount, albeit after a good rally over 5 or 6 sessions.
LYC is in the red now, down 2 at 193.5 after jumping up early with the broad market. The announcement regarding the environmental impact of the Malaysian processing plant is due at month's end and I don't want to be long or short going into that. I've just bought back a few at 194 and will buy the rest through the day. It looks well offered, there are plenty of 2011 tax year profits to take in this one.
12.50 The other day, I shorted RSG at 106.5. It has broken support today and it's a chance to slump.
1.31 The pullback is surprisingly persistent with the gain just 9 points. Here's the 10 minute XJO chart.
FMG has just broken 600 which has been a good support over the last 7 or 8 sessions. The stock is just hanging in there. I've got July 625 puts there so happy to see it crack lower.
I bought back more LYC at 192, just a few to go. I shorted more RSG at 102.5 and bought some of that stock back at 101, where it is now.
2.58 The market might have found the intraday low. The selling seemed overdone especially with the potential for further rallies overnight on a yes vote. Out of the last of the LYC at 192 and bought back some intraday shorts in CGF and CPU for a few cents my way which helped to compensate for overnight moves against my core positions. I also bought back another third of the extra RSG at 99.5, just in time as the stock has recovered to 103.
4.13 It was a topsy turvy afternoon but the eventual finish was at 4474, a rise of 12. A minor down day for me as financial strength in CBA and CGF did enough to outweigh minor weakness in FMG, LYC and RSG. Out of LYC now anyway.
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