daytrade diaries... september 8

Morning traders.

Market wrap: Local stocks look set to move higher this morning after a strong overnight lead from Europe and a bounce for base metals.

With the US closed for the Labor Day public holiday, investors will look elsewhere for a lead. European shares advanced sharply overnight for a third day of gains after Kraft's bid for Cadbury excited hopes of a revival of dormant take-over activity. European mergers-and-acquisitions activity has recently been at its lowest level since 2005.

The pan-European Dow Jones Stoxx 600 index rose 1.4%, led by gains in the UK, up 1.7%, Germany +1.47% and France +1.5%. The European action followed healthy rises in Asia yesterday, where Australia's 0.4% advance trailed Japan's 1.31% rise and a gain of 1.53% in Hong Kong.

Crude oil futures initially broke north overnight but retreated to finish around the $68 level for a fourth session. Spot gold futures were also virtually unchanged at $994.40. Base metal prices rose modestly on the London Metals Exchange, with lead and zinc inching to new 12-month highs.

The SPI futures index was last night pointing to an open 18 points higher this morning at 4485.

TRADING THEMES TODAY

U.S. FUTURES: Yesterday our market showed little inclination to move much before the Americans return from the Monday public holiday. However, the strong lead from Europe has seen Dow futures climb to +61 this morning. Our market will respond to changes to that figure. Track U.S. futures here: http://liveindices.com/

PATIENCE: We've had a few dull, low-volume sessions lately as the market seeks direction. That should start to change this week because Monday's Labor Day weekend traditionally marks the end of the summer holidays in the U.S. and a return to normal trading volumes. We should know in the next week or so if the gains of the last few months are sustainable.

Good luck to all.