Watch out below. Fri May 6

It's a couple of hours before the open and I've come in to find that the risk sell off has snowballed with resources and the AUD hit hard. It's not a huge surprise and it's the reason I was uneasy turning my book around yesterday. You often get the first attempt to rally followed by one or two more down days.
I suspect that will happen today but most of the usual linkages have broken recently with the Aussie market selling off hard on AUD strength while US markets surged. I'm holding onto the hope of another counter intuitive rally today but realistically, I think it's too early. Overseas buyers are still getting out of their longs and the locals usually stand aside.

10.44 So far it has proven to be a buying opportunity. The Asx 200 is down 4 points after dropping 40 on the open. I bought one or two things on the open which I'm tipping out soon but holding most positions.
I closed out the short in Seek as my broker has a big upgrade on the stock and it was showing decent resilience. Unfortunately, I missed the real cheapies and paid 698 which is the current price. I can always re-short if the rally fades.
I've added a long in IPL. This one reports on Monday and is due a short squeeze after falling very hard on currency fears. There is a textbook 5 wave look to the swing down from 448 after a marginally lower high in mid April. I think the stock could recover to about 400 but may have further to fall after that. Long at 371 and I'll probably sell most out by the close ahead of the result.

11.45 I thought it was a vain hope but the rally is holding. Down 2 was the best and the index is down 7 now. It has looked like falling over a couple of times and hasn't done so.

The resources stocks are very mixed; BHP and RIO are still well down and here and there some of the mid caps are under pressure as if there is serious liquidation going on. Elsewhere stocks have recovered their early losses and even pushed into the black.

1 pm This has the capacity to be a reversal day. The market traded lower than yesterday and has now pushed above Thursday's high. I think it has to close above to be a key reversal.

2.20 After reaching a gain of 8 points, the Asx 200 has had its first pullback since the open and is down 9. I've sold out of OSH at 703 for a small profit. The chart is having a nice reversal day but it traded down to 680 and the stop seems too far away now. If I'd picked up some more at lower levels I'd still be long but my entry price was 697 for not enough stock so...

I'm short term bullish though so I've replaced it with a long in FMG at 612. The stock made a marginal new intraday low on Wednesday but rallied into the close. It's shaping up to have made a higher low today so offers more protection than OSH and the prospect of a better quality buy signal.

3.25 Western Areas is my worst performer of the fresh longs from yesterday. However, I picked up some cheap stock early on and sold it reasonably well which has made me more comfortable to stay long this. My stop is now a touch lower at 629.

4.14 IPL was a good performer, closing up 12 at 383. I've sold out 3 quarters of my long position because the company report is due on Monday. I'm mildly bullish but the volatility around a result means I don't need a large position.

The Asx 200 finished with a respectable loss of 11 points but no key reversal.