daytrade diaries... july 2

Morning traders.

Market wrap: Australian shares look set to open marginally stronger this morning after modest gains on Wall St overnight.

A good night on European markets plus upbeat American economic news led to a big start in the US but stocks fell back as the night wore on. The Dow closed 57 points or 0.68% higher but 76 points off its intraday peak. The story was similar with the S&P 500, up 0.44%, and the Nasdaq +0.58%, both well off their highs.

European markets started the quarter with a bang. The FTSE rose 2.15%, France's CAC added 2.44% and Germany's DAX 2.01%. Sentiment in the US was initially boosted by further signs of stabilisation in the factory and housing sectors. A gauge of future housing-market activity rose for the fourth straight month in May, its best run since 2004. However, private-sector jobs fell 473,000 in June, raising fears that the monthly nonfarm payroll report due tonight could be grim.

Gold mining was the stand-out sector in the US as gold futures bounced back from two days of losses. A US index of gold/silver miners rose 3.82% after gold benefitted from a fall in the US dollar after the weak payroll numbers. Gold futures were recently up 1.5% at $939.90 after earlier breaking $945. Crude oil continues to range-trade near $70, recently down less than 1% at $69.28.

A boom night for base metals points to a promising day for local miners. Copper rose 2.4%, the most in a week, as manufacturing expanded in China. Nickel had a huge night, rising 7.3% and breaking out to a new 2009 high. Lead gained 2.9%, zinc 3% and aluminum 2%.

Local futures trading followed the US market south. The SPI was recently up 9 points at 3872.

TRADING THEMES TODAY:

GOLD: healthy gains for US miners point to a bounce for ours if gold futures hold the advances of the last 24 hours. Track the live price here: http://www.kitco.com/charts/livegold.html

NICKEL: an explosive breakout to a new high last night should translate into gains for the likes of WSA, IGO, MCR, MRE, perhaps even PAN. Most base metal miners should benefit from overnight rises.

CAUTION: Wall St gave back most of its gains before the end of the session, suggesting nervousness before tonight's payroll report. A bad number could spark another down-leg for global markets. Of course, the opposite also holds true. Tomorrow is a public holiday in the US, so tonight's action will set the tone for the next two days of Australian trading.

Good luck to all.