Usual perspective

The index is down 1% at 2.14 pm in a mildly panicky response to the S&P ratings downgrades which were largely shrugged off by European and US bourses. Even more participants have returned to the Australian market so it's quite possible that the house traders are back in force and they love to short the market. We've recovered 13 points from the low and while I don't expect a reversal, I find it hard to get bearish. The charts look reasonably supportive despite a failure to get through 4200 convincingly and the European crisis is nearer the end than the beginning. Chinese data tomorrow is expected to show a slowing economy which would mean job done for the authorities and further gradual monetary loosening to come.

Here's the Asx 200 daily chart. The possibility exists that we've seen one of those failure to launch type bear market retracements over the last couple of weeks but I doubt it because they are more likely to appear in the midst of a downtrend such as the one in August last year. While it was a sizeable retracement, the second leg up couldn't get far above the first leg high. Anyway, there are a succession of higher lows in terms of the bigger and the smaller swings and I'm still looking for another test of 4400.

I'm just sitting on my positions. Linc had a mad run up on Friday afternoon, touching 143 before closing at 133. I'm long at 121 and might have missed my chance to sell out on a short squeeze. The company received a please explain request from the stock exchange and have mentioned the possibility of a cornerstone investor but no firm deal. The stock is back at 129 and looks soft on the 60 minute chart.

The daily is above and the 60 minute chart below.

3.37 I've decided to stop messing about now that activity is picking up and I've sold out of the balance of BLD at 382 and FMG at 462 on trailing stops while I let LNC go at 129.5. I still have IAU, IPL and TOL but the latter is also on the block after making a one week low with a 13 cent fall to 428. I'm just looking for a better moment to get out. It's disappointing and, as I posted earlier, I'm not particularly bearish but it's a stop/start market and the thing to do is to stay nimble and I get a move I can ride.

4.12 The index closed down 49 points at 4147 and I sold the TOL at 428. I'm happy to have cleared the decks after just sitting on positions for a few weeks which went nowhere overall. The US is closed tonight.