daytrade diaries... january 13

Morning traders.

Market wrap: The Australian stock market looks set for a second day in the red after a sell-off on Wall Street and on commodity markets.

Futures traders expect our market to open 50 points lower after a pullback on global markets following yesterday's weak profit result from Alcoa and central-government moves to rein in China's booming economy. The local SPI futures index closed at 4841.

Wall Street slid from the opening bell after Alcoa launched the fourth-quarter U.S. earnings season on a sour note by missing analysts' expectations. The aluminium producer slumped 11%, dragging the Dow Jones to a loss of 0.34%. The broader S&P was hit harder, losing 0.94% and the Nasdaq fell 1.3%.

The energy and materials sectors followed commodity prices lower after China lifted the reserve requirements for its banks and raised interest rates in the interbank market for the second time in a week. The move was seen as a clear sign that Chinese authorities aim to cool the rapid growth in the economy.

"Policymakers are following through on their pledge to guide credit in order to pre-empt rising inflation and avoid asset price bubbles," the MD of a Hong Kong-based equities firm told MarketWatch.

The sell-off drove most U.S. sectors into the red. Oilers lost 2%, precious metals miners 3.8%, banks 1.7%, airlines 1.8% and REITs 1.7%.

The Chinese move raised demand fears for oil. Crude futures slipped 2.45% to $80.52 a barrel as the promise of milder weather in the U.S. also took its toll.

Gold was crunched by concerns about a drop-off in demand from China. The spot price tumbled more than $23 or 2% to recently trade at $1,127.20 an ounce.

Base metals were also caught in the downturn. Comex copper fell 2.66% to its lowest level in a week. Zinc and nickel hit their lowest levels in nearly three weeks and lead its lowest since December 30.

"The general concern in the market is of monetary tightening and the impact that could have on the speed of the global economic recovery, and therefore on the potential for metals consumption recovery," an analyst at Barclays Capital told Reuters.

In Europe, Britains FTSE lost 0.71%, Germanys DAX 1.61% and Frances CAC 1.06%.

TRADING THEMES TODAY

TIN HATS: Our market yesterday pre-empted some of the overnight tumble in Europe and the US but any slowing of Chinese demand has serious implications for our miners and the next few days could be messy. I'll stick to intraday scalps today, especially amongst what might be called "collateral damage" - shares that have no exposure to China but get caught up in the sell-down. Any defensive stock sold down hard at the open will be a candidate.

ECONOMIC NEWS: Local lending finance figures are due at 11.30 am. Tonight in the US: crude oil inventories, the Fed's Beige Book and Federal Budget Balance.

Good luck to all.