What's old is new. Wed Feb 2

Or what's bad is good, buy is the new sell.... Overnight strength as most indices are back at new (recent) highs has catapulted the Australian market to a 54 point rise by 11.08 am. Activity continues to strengthen in the old economy as loose monetary policy works its magic. Meanwhile, China is gradually slowing in line with their tightening bias.
Among the biggest gainers are the stocks that had been sold down hard so that Paladin has continued its rally with a 7% gain while Mmx is up an impressive 12%.

Fortescue was that sort of trade and it has gained a more modest 2.5%, rising 16 to 657.

With the new highs overseas, all bets are off regarding potential shorts. I'm also wary of buying the top of the range too. The outcome is that I'm nursing my existing long positions.

I've added a long in Wsa. A short term position about half my normal volume as I look for a topping pattern to play out. There was a brief sell down soon after the open and I bought these at 650.

12.36 The market is up 1% having chopped a few points lower. It's in that intraday period where the jury is out on whether there's another kick higher or not.

Lynas is having a surprise sell off and has slipped to 181 but apart from that, most positions are fine. I closed out the short in Aristocrat at 296 which is just about the high of the day. I'm looking to reinstate the short in a day or two.

1.36 The index has slipped further but still up 37. With Hong Kong opening up 1.4% (China closed for holidays) and Japan strong too, the pullback may be done.

I was uncertain that Lynas had finished the retracement when buying yesterday but the sell off, which has hit 176, has dipped below Monday's low but is clearly above the breakout. Having sold out half of a small position at 187 average yesterday, I've added more in the high 170s. The sell off could still be incomplete but with the extra leg down I'm more confident than I was yesterday. The stop is still in the low to mid 160s.

2.18 No resumption of the rally for the Asx 200 yet and I've walked into a wall of selling in Lynas. It hit 173 although it's having an attempt to bounce with a push back to 175.

Fortescue is up 20 at 661. I'm sitting with my long position for now and targetting the top of the November/December range of around 690. I've also punted a few Feb 700 calls at 5 in case it has the sort of reversal there's been in Mmx and Pdn. That's probably less likely since there are plenty of longs at 680 (I think) from the recent Temasek placement but I'm prepared to risk the option premium.

2.32 Getting my head out of my own stocks and looking at the bigger picture, there's a severe cyclone expected to wreak havoc in coastal North Queensland today and tonight. Queensland based bank, Suncorp, and reinsurer QBE are the hardest hit with the major banks flat to down. That's what is keeping a lid on the market.

3.04 A Lynas director put in a notice regarding a large share sale - although he still has most of his holding. It's such a speculative stock and that has been enough to generate the selling today. Back at 177 though.

4.15 That little bounce was shortlived and Lynas closed at 173 which was a bit above the intraday low of 169.5. I would have been better served to take a day off. Lynas cost me - at least temporarily - and I paid the top in Aristocrat which closed unchanged at 288. Wsa was a small offset.
I sold out the last of my Awe at 174. I wanted to get out after yesterday's 171 close but held on to most and was rewarded with a mild bounce. The chart wasn't disastrous, just confusing, which is why I didn't want to stop out robotically.
The index closed up 44 at 4796, once more within striking distance of the top of the range. The January high was 4839.
The cyclone is due to hit the coast at 10 pm tonight. I hope no lives are lost.