Second wind. Wed Jul 21

As is often the case, the morning report on FNArena sums up the action over the last 24 hours beautifully. It was quite a gamble for us to rally yesterday on the back of Chinese strength and it wasn't looking too good early on in the overnight session when the US was down over 1%. However, it reversed to finish up and now it seems that the narrative is changing, with the initial rally leaders slipping and confidence returning to the miners.
I've taken the opportunity to put on a short position in Incitec Pivot, one of the stocks that has bounced nicely off the early July lows. It was looking stretched after a strong V bottom and just managed to pop up to minor new highs over the last two days. It's still short of, but quite close to, three swing highs formed over the last six weeks at levels between 314 and 320. So my stop is at around 320 and the short position was placed at 307. I'm hoping for a retracement, perhaps filling a small gap, down to the low 280s.

2.58 Best news of the day for me is a good rise in Lnc. A story came across the news wires mid morning about Adani - the proposed buyer of the Galilee coal tenement - going to market to raise USD $850 m in a new share issue. Lnc is up 22 at 152.5. Even at the level, the market cap is under $750m so with a mooted sale price of $1bn, and other coal assets on the books, it looks like there could be more upside yet. Here's the daily.

4.10 A consolidation day has ended with a small gain of 7 points.

The Xjo index could go either way; a new high or another leg down which I think would complete a correction of the recent run up. Given that equivocal view, I'm happy to have a short position on now.