Reprieve. Fri Jun 17

Some signs of a steadying US economy has given us a reprieve this morning and the index has bounced back 1% at 11.10 am.

For the time being we have a potential double bottom but I've been hunting around for retracement trades and can't find any standouts. Actually, IPL looks ok but it has gone a bit far from the opening low for me to chase it now. I still have some Jun 400 calls which I've written off but with expiry due next Thursday, I'm likely to run out of time.

I've also been pondering a long in TOL on the basis of a potential double bottom and with the last leg up having overlapped the previous swing low showing that selling momentum has faded. However, I feel that I should get with the program and sit on the sidelines until I can sell a rally. I'm doing too many marginal little retracement trades, I generally make a little out of them but I'm also then swimming against the current of the major trend.

11.42 Just had an expiry day punt in TLS, buying Jun 301 puts at 2.5 cents. The rally has a 5 wave look about it, everyone is long it and a recovery rally this morning has quickly faded to leave 2 secondary highs at 307.

12.10 Glad I resisted the temptation to punt the rally, the gain has slipped to 19 points with Asian markets generally ticking lower.

I've added another short in OSH, buying Jun 675 puts at 12.5. I traded the little reversal rally which stopped short of the 690ish resistance. I'm looking for a move to fresh lows in a sector which is under pressure.

1.55 The gains are drifting away. The index rallied off an intraday low of 4482, up 3, but that second bounce is fading now.

It's nice to be going with the tide of events for a change. I added a third short position in LYC...a bit late, because the latest sell signal was at 199 but I'm short a few at 195 with a stop at 201. It's also a sell on a weekly scale as the stock breaks the early May low of 197.

3.28 Actually, I'm not quite swimming with the current in TLS where the stock has been in an uptrend but the shorts in LYC and OSH are going well as the market has continued to drop, now down 9.

3.38 With that drop into the red, the Asx 200 has dipped below the March lows confirming a trend change in the bigger picture. The next swing lows are 4314 in late August, 2010, and 4182 in early July of last year.

4.12 Some late buying helped the index to close higher by 6 points as we await Greek developments over the weekend. It could go either way, which was why I bought puts today where possible in order to limit damage if there's a strong rebound. LYC kept falling, closing at 184. I bought a handful at 185.