daytrade diaries... august 24

Morning traders.

Market wrap: Australian shares will play catch-up today after key overseas markets broke to new 2009 highs on Friday.

Futures traders expect our market to wipe out most of Friday's heavy losses at the open. The SPI futures index ended the session 69 points higher at 4320 after shares in the US rallied for a fourth straight day, sending indexes to new 2009 highs. The Dow Jones piled on 156 points or 1.67% to crack 9500 for the first time since November. The S&P 500 added 1.86%, the Nasdaq rose 1.59% and the UK and France broke to fresh yearly highs on evidence of improving sentiment.

Friday's big gains came after US home resales rose for a fourth straight month and Federal Reserve Chairman Ben Bernanke declared the global economy was emerging from recession. Commodity markets rallied hard, driving gains for oil, precious metals and base metals.

Crude oil futures hit their highest level this year as investors bet on a recovery in demand, breaking $74 before finishing at $73.88. Gold futures added $13 or 1.5% to finish at $953.70, supported by a weakening US dollar. Platinum rose for a fourth straight day on supply concerns.

Base metals recovered from a wobbly week. Copper rose 5% in the US, its biggest advance in a week, and is pushing against the old resistance level. There were also solid gains for nickel, aluminum, zinc, tin and lead.

TRADING THEMES TODAY

SHORT SQUEEZE: On Friday our market was hit by a triple whammy of disappointing profit reports (IAG, BBG, APN, etc), Westpac's warning of rising bad debts among local banks and insitutional selling to buy Telstra shares. However, anyone who bet our market was leading a pullback in global markets got it badly wrong. A lot of traders will scramble to cover at the open.

RESOURCES: Oil hit a new 2009 high, copper is back near its high and other base metals followed it north. If Friday's bullish sentiment carries into this week, we can expect fresh highs in the days ahead. At the very least, there should be some big opening gaps higher today for holders.

COMPANY REPORTS: This is the last major week of the company reporting season but it's a big one. According to Egoli/BRR, reporting today are: AEO, CGF, CIF, CIL, CWP, DWS, DTL, FXJ, IOF, MRM, PRT, PSH, RHC, RIC, SDM, SEK, SKI, WOW, WCB.

Good luck to all.