daytrade diaries... august 21

Morning traders.

Market wrap: A big rebound in China and solid gains in Europe and the US point to another strong open for Australian stocks this morning.

Stocks in Shanghai bounced 4.53% higher yesterday after dropping 20% in less than three weeks. The rally helped major Asian markets close nearly 2% higher and flowed on to Europe, where the UK, Germany and France added around 1.5% each and the US, where the S&P 500 rose 1.09%, the Dow 0.76% and the Nasdaq 1.01%.

American investors had to process a conflicting mix of economic data. Initial claims for jobless benefits hit their highest level in three weeks, suggesting employment worries persist. Also, an index of leading economic indicators rose last month less than analysts expected. However, investors took heart from better-than-expected regional manufacturing figures.

There was green across the bourse in the US, with miners recovering some of this week's losses, banks up 2.7%, REITs 4.05% stronger, airlines up 2.08% and telecoms up 2.62%.

Crude oil futures were volatile but slightly higher as the front-month contract flipped over. The September contract finished 12 cents or 0.17% up at $72.54 and the October contract was recently trading at $72.91. Gold futures were marginally softer, down $1.40 on yesterday morning at $940.20. It was another directionless night for base metals, with copper up 1.1% in London but down 0.6% in New York as the US job claims weighed on sentiment. Nickel, tin and lead rose in London, but aluminum and zinc fell.

Futures traders expect our market to open solidly higher. With 30 minutes left to trade, the SPI futures index was 24 points higher at 4345.

TRADING THEMES TODAY

FRIDAY FADE? Our market outperformed the rest of the world during last week's global pullback but it has significantly underperformed this week, falling away during each of the last two sessions after a strong open. Fridays are traditionally days for profit taking. Three fades in a row or time to play catch-up?

COMPANY REPORTS: The deluge just keeps coming. Among those reporting today: APN, ASB, BBG, CGF, DUE, GMG, IAG, MAP, MCR, MCE, MDT and TEL.

Good luck to all.