Australia's troubles with the Decision Review System (DRS) continued with Watson and Phil Hughes using up their first innings quota inside 19 overs.
Watson, for the second innings in a row, was unsuccessful with his attempt to overturn an lbw verdict - his "T-signal" being greeted with incredulity by some of England's fielders.
Worse followed as Watson's opening partner Chris Rogers decided against challenging an lbw decision shortly after lunch when he was struck just below the waist by a Swann full toss.
Had he done so, Rogers would have been reprieved as 'Hawkeye' showed the ball to be comfortably missing leg stump.
And Australia were quickly out of reviews when Hughes sent a caught-behind decision upstairs, only for there to be no clear evidence either way, meaning it stayed with the on-field call ('Snicko' - not part of the DRS - later indicated a clear edge).
Past glories
There was a painful reminder of better times for the Australian contingent of the crowd during the tea interval when leg-spinning legend Shane Warne was inducted into the International Cricket Council's Hall of Fame.
Warne claimed 195 of his 708 Test wickets against England, starting with his 'ball of the century' to bowl Mike Gatting in 1993.
The 43-year-old was joined on the outfield by his parents Keith and Bridgette and girlfriend Elizabeth Hurley in front of an appreciative crowd.
Warne is part of a four-strong entry into the Hall of Fame for 2012-13 alongside former team-mate Glenn McGrath, West Indies batsman Brian Lara and women's cricket pioneer Enid Bakewell.
