After the flood. Tue Aug 3

We've had a flood of data in the last few days concerning economic activity and the Europeans did their bit last night with a better than expected PMI figure. Buoyant bank results helped European bourses as well so that the major indices finished up between 2 and 3%. The US followed suit, which is just as well really, because we jumped the gun yesterday and with the US overnight futures having been firm for most of yesterday's session, it needed a really strong night to get us moving again.
Base metals ran hard overnight too and with the AUD strong, it implies that appetite for risk has returned. The resource sector is performing well after half an hour and the index overall is up by 39 points.
I filled my boots yesterday and actually bought back into Mmx and went long some Lynas on the close at 80, the upshot being that I don't want to chase anything this morning and am taking some profit here and there.
Challenger is down 6 early on, as the focus is largely on resources.

12.44 It's been a leisurely retracement from the gap open. Here's a 10 minute chart of the Xjo.

It looks like we might be in the final part of the correction for the day. I'm anticipating support soon and then a push on to a new high either tomorrow or the day after. Who knows what will actually happen; it's just my working hypothesis.

In the meantime, I'm out of half of my Lyc at 83 and Pna at 60 but have started putting on a small position in Awe. I'm a bit hesitant because there are plenty of strong stocks around and this is a weak one, but there's a nice, potentially higher low and a fairly tight stop with reasonable upside. Long a small amount at 160. I'd probably use the low 150s for my stop, 145 worst case, while a rally could push this up to just below 200 resistance quite easily. They've become more of an explorer than a producer and have been sold down on drilling failure...perhaps they'll find something.

A deal is supposed to be imminent for Lnc and nothing has happened so the stock has drifted down 4 to 185.

3.15 Linc was suspended from trading at around 2pm as an announcement confirming the Adani deal will be made after market.

The RBA kept rates unchanged, this was expected after last week's benign CPI figures.

The Xjo has been stabilising since about 1pm and is up 23 points. Intraday, I think it could go either way - have another look at the earlier lows or push on to the close.

I bought more Awe earlier at 161 to average 160.5 and they're a touch higher again, 161.5.

4.15 Not a lot more news, the Xjo finished up 30.

The Adani announcement is scheduled for 4.30 pm our time, so I'll follow that with interest.