An interesting start to the day has the Asx 200 roaring back with a gain of 42 points to 4239 at 12.32 pm. I cut my short in AGO at 305 for a 6 cent gain and I'm left with a short in WSA which is up 3. My puts in QBE have halved today (or would have done if they had traded) but I hedged with stock at 1201 as it broke through the top of a narrow trading band and the stock has pushed on to 1225. I still think that this is a retracement but there's a gap to the breakdown level at 1291 and if QBE can push through two recent highs at 1229 and 1230 then maybe it can get close to that 1290 level. If the stock gets to 1250, I'll have covered the cost of the puts.
The Asx 200 is closing in on resistance also, with the breakdown level (around 4248) fast approaching. It's possible that the index could fly through to the top of the range if it does break as shorts would likely be squeezed.
2.01 I've been in two minds about the bearish case for stocks because this is the time of year when the high yielding banks run very hard ahead of reporting and dividends. NAB has been forming a pennant which could have broken either way. There has been a minor buy signal today which would be strengthened by a break of the last swing high at 2385. Long the March 2400 calls again, at 22. Most of the bank charts are looking good and this could be the catalyst for a reversal to a new high for the index. Here's NAB; after the correction to 2300, it has formed up bullishly.
3.40 Out of a third of the QBE stock at 1248 with the stock now up to 1250. Have pretty much paid for the puts now. Meanwhile, the Asx 200 went as high as 4253 – through resistance – but is sitting just below now. Also out of the short in WSA at 561.
4.12 The market finished up 51 at 4248. I've switched my book around to be long. Fingers crossed.
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