BUZZ-UK miners: China rate cut provides catalyst for short squeeze

** UK mining stocks rally strongly after China rate cut, with dollar positioning also providing catalyst for a short squeeze to year end, traders say

** FTSE 350 Mining and Stoxx Basic Resources indices move sharply higher after rate cut, but prior bearishness means stocks still down for the week.

Chart: http://link.reuters.com/xyf53w

** Record (LSE: REC.L - news) long dollar position also warning sign for consensus short mining position - any sign of short-term dollar weakness could see additional reversal, traders say

Chart on dollar positioning: http://link.reuters.com/zyf53w

** Mining sector had been under increasing pressure, with broker downgrades following falling commodity prices and weaker China data.

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)