More Euro concerns – Italy was in the picture also – were enough to limit the recovery rallies for the Europeans and to reverse the rally from the previous session lows in the US. The S&P 500 index held above the 200 day moving average but that looks like a temporary situation to me. The Greek parliament will vote on the austerity package on Tuesday night (our time) so that could be a circuit breaker but it's no sure thing to pass.
In the meantime, the Asx 200 is trying to hold the line above last week's 4452 low but it's a close run thing with the intraday low at 4456.5.
I'm working with the premise that the trend channel will stay intact which means I was short and I'm staying that way for a while longer. It's not one way traffic though. I got out of my TLS short soon after the open because the second round of analyst opinion on the NBN deal was less pessimistic. The sale price for the July 300 puts was 13.5.
CPU is continuing to fall and since it's not one of my normal stocks, I thought I'd have another go at developing a longer term strategy. I've sold July 875 puts at 23 which means I'm long the 900 to 875 put spread at 7. My plan is to sell more July 875, or maybe 850, puts once I feel as if the selling is easing. I'd be looking at a net credit for the ratio spread so the ultimate outcome is either getting put the stock at 875 less a discount of 25 for the 900 to 875 put spread and any extra credit from the second sale or the stock rallying above 900 which means that I pick up the credit on the ratio only or expiring somewhere in between with 875 the best outcome.
I've bought July 5050 puts in CBA also. The stock has slipped below Friday's low and I suspect that the retracement might be over. Ideally, I'd like to turn this into a ratio spread after a resumption of the downtrend. If the stock doesn't weaken then I'll have to scrabble out of the trade; maybe hedge with stock etc.
Otherwise, FMG and LYC are heading lower along with RSG.
1.11 The market is on its lows but just above the 4452 level. My positions are performing reasonably well but there is one that got away. I identified LNC as a short and got permission to trade but somehow missed the cue. It actually opened a touch higher before tipping over so it would have been a good day trade. Here's the chart.
2.10 I'm short CGF at 480 as they're slipping away after a 2 week retracement rally.
2.25 Asian markets are outperforming the overnight lead and that might have been enough to help the Asx 200 rally for an hour or two. The rot has set in again though and the market is testing the intraday lows, down 48 at 4460.
3.14 It looks like support will hold for the day; the action is contained within the tight intraday range established earlier and the opening calls in Europe are for a mildly lower open.
4.16 That's pretty much what happened, the index shed 46 to 4462. CPU kept falling and I'm in no hurry to sell the extra puts. I did hedge some of the CBA Jul 5050 puts by selling half the number of July 4900 puts at 49. That's 27 for the 150 spread. LYC drifted off and closed at 195.5, not before it traded below 195 which is a minor support. I'm hopeful that there'll be more weakness tomorrow as I have a core short position there.
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