daytrade diaries... june 3

Morning traders.

Market wrap: US stocks inched higher overnight, hampered by capital raisings, lagging financial stocks and a flat night on commodity markets.

The major indexes see-sawed in and out of positive territory before finishing up 0.2% (S&P, Dow) - 0.4% (Nasdaq). Bulls took comfort from the biggest monthly jump in existing home sales in eight years, but the market was ham-strung by a sell-off in banks and other financials after surprise capital raisings from Amex and JP Morgan Chase.

The S&P Bank Index lost 3%. Among the sectors advancing were insurers (+2.5%), gold/silver miners (2%) as gold resumed its uptrend, and airlines (5.5%) after a hint of weakness in the month-long surge in oil.

Gold hit $986 in New York trade but has since pulled back to $981.60, a gain of more than $6 since yesterday morning. Oil dipped below $66.50 but recovered to a session high above $69. It recently traded at $68.71. Base metals stalled on fears that prices have run well ahead of demand. In London, copper, nickel and zinc eased less than 2%, while aluminium and lead were steady.

Futures traders expect a fourth day of gains here. The SPI rose a modest 13 points to 3973.

Our market is due a breather after jamming on 200 points in three days, so we can expect some profit taking today. The current mood of optimism may also be affected by today's release of GDP figures at 11.30 am, which may or may not confirm that Australia is in recession. The US action suggests financials will be weak but goldies should continue north.

Good luck to all.