Hooked on a feeling

It's a lot easier to trade when you are open minded. I'm pretty bearish at the moment and although that's driven by the market action rather than any permanent mind set, it's a battle to buy things even if a stock is shaping up bullishly and I'm just looking at the short term. I suppose that like any addiction or attachment, acknowledgement is half the battle.

I'm not going badly though. I bought back those extra CBA July 5050 puts towards the close at 120 and have sold out half this morning at 150. The European debt crisis is hurting the Aussie banks now because while they may not be exposed to Greek debt, they are exposed to Italian and Spanish bonds.

Australian retailers are capsizing as they face a perfect storm of tight monetary policy, ridiculous rents, inflated prices and a strong AUD which make internet shopping a dream and a generational change in spending habits. DJS just downgraded and the stock is lower by 15%. PBG is in a much more humble market niche, selling undies rather than luxury items, but the stock fell a little in tandem and I had to stop out at 67.

There is support for risk assets today thanks to Uncle Ben's latest words of support to US stock markets. Chinese strength does no harm either but I don't believe it. For example, RIO has dropped back into the 79-81 dollar trading range after a recent rally. It's leading BHP slightly.

The reason I'm bearish is that despite Bernanke bringing out the QE3 big gun, the Dow faded and looks vulnerable.

Meanwhile, the other strong stock market, Germany, has a real head and shoulders pattern going on and may well have completed a retracement of the latest move down, ready for further weakness.

I've got a lunch on so I'm leaving the intraday trading behind except for the inevitable attempt to pick a turn in LYC where I'm short at 197.5 with a stop at 201 and the stock at 198.

The new - take no prisoners, tell it like it is, no longer the 98 pound weakling getting sand kicked in its face - ratings agency attitude came to the fore as Moody's talked about the possibility of a US downgrade after the market. It sent overnight futures lower but they've recovered to be down about 3 S&P points. It's an improvement but the agencies still specialise in stating the obvious, after the fact.

3 pm The market had another leg down so the positions are going ok. CBA is now down below the June lows and I'm pondering whether to sell out the last of the extra July 5050 puts and just leave myself with the bear spread. BHP has also dropped to 4335, I'm more bearish there – CBA has already hit my target, roughly – and have 100 July 4300 puts left. The TOL short has performed today, I bought back the extras from yesterday at 464 and then bought half of the original back at 456.

I've shorted stock in OSH at 662 on a retracement after it broke the swing low a couple of days back.

it's a similar story in FMG and this time I've bought July 650 puts.

Despite gold and NCM running on Bernanke's comments, the Aug 3750 puts are not down much.

4.13 Maybe I should have sold those CBA puts. The stock bounced back to close at 4902 as there was a late squeeze, especially in the big resource plays. Quite a good day overall, bought back more TOL at 452. Tomorrow could see the third test of 4450.