Morning traders.Market wrap: Australian shares look set to open...

Morning traders.

Market wrap: Australian shares look set to open at their lowest level since April after heavy falls on Wall St.

US investors continued to unwind bets before tonight's launch of the US earnings season. Energy shares were dragged lower by a sliding oil price and economic concerns were heightened by talk of a need for another stimulus package. Worryingly, stock indexes appeared to break important support levels as selling accelerated into the close.

The Dow finished 1.94% lower at 8164. The S&P lost 1.97% and the Nasdaq 2.31%. Canada retreated 1.9% and European markets 0.2 - 1%.

Crude futures fell for a fifth straight day and have now lost 12% in a week. Crude was recently at $62.49, down 1.75% in 24 hours. Gold futures twice spiked higher in choppy trade but were recently close to unchanged from yesterday's US close at $924.40. Base metals rallied early in US trade but failed to hold onto gains, finishing flat or marginally lower. Sentiment wasn't helped by a UBS analyst report that said copper imports by China could drop 64% in the second half after record shipments led to excess stocks.

With 20 minutes left to trade, local futures traders were pricing in a steep discount at today's market open. The SPI was down 64 points at 3680.

TRADING THEMES TODAY

BOUNCE TRADES: There won't be many risers to chase, so if you're not short-selling, this is where most of the opportunities will lie. Look for oversold shares at support levels as the early selling exhausts itself. I prepare for days like these by scanning charts and setting alerts for each equity at key price support levels.

SPECCIES: When the blue chips are getting spanked, traders start to look further afield and there are often runs in some of the more obscure corners of the market. For example, ESI's run this week. Money flows to where it can make a profit. Watch closely for any hint of a developing trend.

DEFENSIVES: Sorry to repeat the same themes, but you gotta stick with what's working - the trend is your friend. Utilities rose 2.7% yesterday in a falling market, telecoms 0.9%, IT 0.5%.

Good luck to all.