daytrade diaries... august 19

Morning traders.

Market wrap: Stocks look set to rebound today after overseas markets advanced and the IMF declared the global recession was over.

Markets in Europe and north America staged modest recoveries after two days of heavy selling. Major European stock indexes gained just under 1%, setting the stage for the Dow to put on 0.9%, the S&P 1.01% and the Nasdaq 1.3%.

In the US, better-than-expected profit reports from retailers helped quell fears about the financial health of American consumers. "I don't think that consumer sentiment is really as bad as we've been hearing," said one American investment officer after reports from Target, Home Depot and Saks.

Also helping sentiment was a declaration from the International Monetary Fun's chief economist that a global recovery was underway. Olivier Blanchard said the recession was over but the crisis had "left deep scars, which will affect both supply and demand for many years to come."

Crude oil futures surged with the rebound in shares and weakness in the US dollar, jamming on 3.65% to recently trade at $69.32. Gold futures went sideways overnight after gains during yesterday's Australian trading hours, currently at $936.60. Base metals remained under pressure and finished mixed. Copper fell 0.4% in London after a surprise decline in housing starts in the US. Among the risers, aluminum rose 2.3%, lead 1.4% and zinc 1.4%. Nickel fell 1.6% and tin dropped 0.4%.

Futures traders expect some relief for our market at the open after two days in the red. With 45 minutes left to trade, the SPI futures index was up 21 points at 4376.

TRADING THEMES TODAY

INDUSTRIALS: On a red day yesterday, this sector outperformed after well-received profit reports from JHX, UGL and MND. Taken together with LEI's report last week, there's a clear pattern of construction/engineering companies beating analyst expectations this reporting season.

OIL: Most oilers followed the price of crude south over the last week. Last night's dramatic reversal in oil futures should see some scrambling today. The challenge for a day trader is to find an oiler where today's gains aren't priced in at the open.

COMPANY REPORTS: Another huge day today. In construction, watch AAX, BLD and MAH. Also reporting: AMC, BTA, CEY, COF, CSL, ENE, ILU, IRE, JBH, ORG, PPT, QAN, SEK and WPL.

Good luck to all.