Market wrap: Improving resources prices and a broad afternoon rally in the US have set up Australian equities for a sixth day in the green.
With 25 minutes left to trade, the SPI futures index was up 36 points at 4044 after gains in crude oil, gold, base metals and European and North American share markets.
Stock indexes in the US finished at their highs for the day, driven by a mix of bullish analyst calls, earnings optimism, improving economic indicators and reports of a private-sector bailout for the troubled CIT Group. The S&P 500 rose 1.14%, the Dow Jones 1.19% and the Nasdaq 1.2% - its ninth straight day of gains.
The gains were started by Goldman Sachs who raised their year-end forecast for the S&P 500 from 940 to 1060 - a rise of about 13% from current levels. Also helping sentiment, the June index of leading economic indicators increased 0.7% last month, after a revised 1.3% gain in May,
Crude oil futures advanced in choppy trade, recently up 0.66% at $64.33 despite analyst warnings of weak demand. Gold hit a five-week high on weakness in the US dollar, adding more than 1% to recently trade at $950.50. In another positive night for base metals, copper and aluminium made new highs for the year but struggled to hold gains. Zinc, nickel and lead all crept to within a few cents of calendar year highs.
TRADING THEMES TODAY
GOLD: Much depends on the direction of the US dollar, but the gold sector is starting to look interesting again. The short-term trend is up and today marks a five-week high. A quick glance at some charts shows several local stocks some distance below where they were the last time gold futures traded at this level.
CONTINUATION TRADES: If in doubt, stick with what's been working for the last week. Positive momentum should continue to carry most base metal and iron ore miners higher. This rally may be starting to look long in the tooth after six days, but it pays to stick with what's working until it doesn't - just ask the traders who went short last Friday.
