stage is set for the biggest run of 2012, page-316

This is a summary of the Pre-Market sentiment for today, 18/5/2012.

The Bears have come on strong with a vengeance, in overseas Markets, with the mounting fears of collapse of nations economies, within the EU, like a domino effect.

So, gripped in fear the Market took a tumble again, overnight.

EEG, actually increased its SP, yesterday, nearly 10%, and traded even higher during the day.

So, given the General negativity in the Market, it will be remarkable today, if EEG maintains its current market price of 17.5 cents.


Market wrap, courtesy of Highlandlad, Day Trader:

Stocks are likely to erase the last trace of this year's rally at today's open after disappointing US economic news pushed the Dow lower for an 11th night in 12.

The June SPI 200 futures contract ended the night session 76 points or 1.8% in the red at 4084, which suggests the share market will start at a level last seen on the first trading day of 2012.

US stocks sank for a fifth straight night as an index of leading indicators declined and Moody's prepared to downgrade Spain's banks. The S&P 500 closed at its weakest level since January, falling 1.51% led by companies most exposed to the economic cycle. The Dow dropped 156 points or 1.25% and closed at its low for the session. The Nasdaq plunged 2.1%.

"Investors are de-risking," the director of research at Haverford Trust in the US told Bloomberg. "There's economic data weighing today, there's concern about a domino effect in Europe. It's not only about the Greeks pulling out. It's about what happens to Portugal and Spain and Italy."

Reports of a run on the recently part-nationalised Spanish bank Bankia heightened tensions in Europe, where the Spanish government's borrowing costs increased at a bond auction overnight. Other reports said Moody's is preparing to cut the ratings on two Spanish banks. The Spain IBEX 35 index fell 1.13%, Germany's DAX 1.18%, France's CAC 1.2% and Britain's FTSE 1.24%.

This week's run of upside surprises in US economic data came to a halt, with a leading index suggesting the economy is starting to roll over and a regional manufacturing index contracting. The Conference Board's outlook for the next three to six months deteriorated 0.1% last month and the Philadelphia region manufacturing index fell for the first time in eight months. First-time jobless claims were steady.

Commodity markets were mixed despite the US dollar extending its rally to a 14th night - the longest since at least 1985. An index of precious metals miners in the US jumped 3.76% as gold rebounded from four losing sessions and a 10-month low. Gold for June delivery was recently up $37.90 or 2.4% at US$1,574.30 an ounce.

There was no respite for oil, which faded to a fifth straight loss and settled at its lowest level since November. West Texas crude for June delivery was lately down 17 cents or 0.2% at US$92.63 a barrel.

There were faint signs of stabilising in industrial metals following a rout that has driven most to multi-month lows, but US copper slumped to a new four-month low. In London, copper edged up 0.25%, aluminium 1%, nickel 0.75% and zinc 0.1%. Lead fell 1.6% and tin 2.2%. US copper for July delivery was recently down two cents or 0.4% at $3.46 a pound.

TRADING THEMES TODAY

BEARS IN CONTROL: The old mantra says that you know you're in a bull market when every piece of bad news is dismissed and good news is celebrated, and conversely it's a bear market when good news is ignored and bad news embraced. Well, the market ignored plenty of solid US and European economic reports this week, but it didn't like what it heard last night. The momentum for now is very much with the bears. That said, markets are starting to look heavily oversold on a short-term basis and some sort of relief rally should be in the offing soon - usually when the last bull has thrown in the towel. The mood on HC is noticeably darkening by the day and that's often a sign that a bounce is overdue. The rebound in precious metals overnight might be an early indicator. Gold/silver miners were a pocket of strength in the US and should find some support here today.

DEFENSIVE TRADING: For anyone who hasn't already read my thoughts on trading bear-market conditions a dozen times, my approach is to switch largely to intraday bounce-scalping mid-caps. Liquidity dries up at the spec end when markets sour, soit makes sense to switch to instruments that still permit an exit if a trade doesn't work out. The mid-caps may not offer the leverage of the specs, but liquidity is less of an issue. Look for stocks hitting strong support areas in the first half hour of trade. My aim is to buy stocks hitting panic-lows and then hold on for the recovery, often exiting in under an hour. Stop-loss discipline is essential - you don't want overnight holds in these conditions until there is a relief rally. Not suggesting this strategy will work for everyone, just sharing ideas for negotiating these difficult times. The alternative is to take to the sidelines and I'm not knocking that.

ECONOMIC NEWS: A busy week ends with a whimper - no significant scheduled economic reports here or overseas in the next 24 hours. The G8 meets tonight in the US.