Where's the rhyme?

Sell in April and ....? Or, April is the new May. A catchphrase works better. For the third year in a row, it looks as if the rally has petered out ahead of schedule. It's a stretch to call it a rally, maybe just a pause in the bear market. The Asx 200 is almost 1% lower at 2.08 pm but the usual intraday recovery seems to be finished already.

Anyway, my book is long but conservative and the damage is at the irritating end of the scale. SBM is down but the sector is up and it started to move yesterday. MSB and PXS are lower but stand a reasonable chance of outperforming if the sell off gathers pace. I'm out of a remnant position in the NAB April 2450 calls for 22 (v 32) but it was a good trade overall with profits in March calls and three quarters of this April trade sold at around 60. The other two positions are held in calls. OSH is actually up and maybe there's some positive news in the background. The final one is SUN and, as with OSH, the calls are marked down to the point where further losses would be minimal.

I have a new position and at last, a bearish one. It's in Woodside Petroleum and I've bought both April 3374 puts and May 3374 puts at 52 and 89 respectively. The weekly chart shows that the stock has had two rally attempts since last October which failed to regain 4000, which was a support level from mid 2009 to mid 2011. There has been an initial fall, followed by a 4 or 5 week congestion and the price is now moving lower.

The daily chart shows that congestion which tended to make lower highs but hold support at just under 3500. The stock broke the level yesterday but closed back near the support line. Today has seen a more conclusive move lower and I'm looking for the fall to accelerate. If there's serious weakness in markets then 3000 is not out of the question in the next few weeks.

4 pm Actually, BHP had quite a significant breakdown today, as it fell below and failed to regain the 3400 level. It's at 3361 now and I'm tempted to buy some puts but the stop is some way distant and the premium is fairly high so I'll let this one go.

4.14 The Asx 200 finished at the day's low of 4246, a drop of 46 points. The daily tells the story. The slow grind up, failure to break out of the range and an accelerating fall.