daytrade diaries... june 16

Morning traders.

Market wrap: Australian stocks are primed for falls after weak US economic data sent Wall Street and commodity prices thudding lower overnight.

There was little evidence of the "green shoots" of recovery in declines in home builder confidence and regional manufacturing figures released overnight. The bleak figures combined with a rebound in the US dollar to spark a sell-off in commodities. All three major stock indexes finished more than 2% lower: Dow -2.13%, S&P -2.38% and Nasdaq -2.28%.

The falls were broad, with the S&P Bank Index off 2.86%, REITs down 5.27%, oilers 2.78% and gold/silver miners 3.6%.

Oil dipped below $70 as the US dollar rose against the euro, but recovered to recently trade at $70.49, down nearly 2% from this time yesterday. Gold slipped to a three-week low as Russian support for the dollar eroded the precious metal's appeal as an alternative investment. Gold slipped 1.4% to $928.40.

Base metals were sold down hard. Copper fell 3.7% in US trade, its biggest fall in eight weeks, on news of a rise in Chinese stockpiles. In London, nickel fell 5.8%, zinc 6.8%, lead 6.1%, aluminum 2.1% and tin 3.8%.

Our market pre-empted some of the decline yesterday but futures traders reckon there's plenty more to come. The SPI dropped 56 points to 3975.

There's no obvious place to hide today, so I'll look for bounce trades in oversold stocks. There may be opportunities in resource stocks but be patient - those were heavy falls in commodity prices overnight and suggest more weakness ahead.

Good luck to all.