daytrade diaries... february 9

Morning traders.

Market wrap: A late slide on Wall Street points to another weak open for Australian stocks.

The local March SPI futures contract closed 31 points lower at 4442 as the major U.S. share indexes sagged after a report that this era of record low interest rates may be coming to an end. Commodity prices were generally stronger as the U.S. dollar pulled back from a seven-month high but the greenback pared its losses as the session ended.

The Dow Jones Industrial Average closed below the 10,000 mark for the first time in three months. The index finished 104 points or 1.04% lower at 9908. The broader S&P 500 dipped 0.89% and the Nasdaq continued to outperform, down 0.7%.

Financial stocks were sold down after a Wall Street Journal report that Fed Reserve Chairman Ben Bernanke will lay the groundwork for credit tightening later this year. Record low interest rates since the global financial crisis have helped U.S. banks book strong profits. In response, the S&P Bank Index lost 2.4%. Also weak were precious metals miners, off 3.25%, as yesterday's rally faded. REITs fell 2.5%.

The U.S. dollar index was recently 0.18% lower for the session as concerns about European debt were alleviated by a narrowing in credit-default swap spreads for Greece and Spain, suggesting investors see less risk of default.

Industrial metals recovered from a three-day collapse on evidence of stabilising demand in China. Inventories of copper in Asian warehouses monitored by the London Metal Exchange dropped for a 12th straight session - the longest losing streak since May. In London, copper rallied 2.7%, aluminium 1.6%, lead 1.3%, nickel 1.2% and zinc 4.3%.

Oil futures are roughly where they were yesterday afternoon, Australia time. Crude futures were recently trading at $71.71 a barrel, up around 0.7% over the last 24 hours.

Gold was unable to hold a break above $1,070 an ounce. The spot price was recently at $1,062 an ounce, down $3 on yesterday's New York close.

European markets bounced back from their worst week in 11 months on positive news from the mining sector and hopes that the sovereign debt crisis is easing. Britain's FTSE rallied 0.62%, Germany's DAX 0.93% and France's CAC 1.22%.

TRADING THEMES TODAY

DOWN AGAIN: The overnight rally in base metals will offer our market some support but that was a nasty finish on Wall Street, with the selling accelerating into the close. Our market traded yesterday like it expected a bounce in the U.S. last night, so we may have a bit extra to give back today. .

BOUNCE TRADES: I'll be sticking to what works for me in these conditions - quick intraday scalps in oversold shares hitting lows near support. Most of the opportunities will come in the first 20 minutes of trade as stop losses are hit. I look for signs of panic selling - the faster a price falls the better the chance of a fast rebound. Slow, grinding declines are much less likely to snap back because they're usually evidence of institutional selling.

ECONOMIC NEWS: The NAB will offer an insight into how recent interest rate rises are affecting local companies when it delivers its monthly business confidence and business conditions update at 11.30 am. Tonight is another relatively light night in the U.S., with the main focus on wholesale inventories and consumer confidence.

Good luck to all.