daytrade diaries... june 5

Morning traders.

Market wrap: Wall Street and commodity markets rallied overnight, but the collapse of Rio Tinto's deal with Chinalco may weigh on the ASX today.

The S&P 500 recovered most of yesterday's losses, rising 1.15% during a night of mixed economic signals. Weak May retail sales were offset by a dip in jobless claims and improved productivity figures. The Dow gained 0.86%.

US gains were fronted by financials and miners as gold, oil and base metals benefitted from a retreat in the US dollar and hopes that the jobless numbers point to a recovery in demand for commodities. The S&P Bank Index added 4%.

Oilers gained nearly 2% as crude rose 4% to $68.83 following a bullish price forecast from Goldman Sachs. The gold/silver mining index added nearly 3.2% after gold futures lifted 1.7% to wipe out most of yesterday's losses. Gold recently traded at $981.30.

Copper fronted a strong night for base metals, jumping 4%. Nickel hit a new high for the year and a late surge in aluminium carried it to its highest level since January.

After yesterday's steep sell-off, all of this should point towards a strong day on the local market but futures traders expect the ASX to open in the red after the Wall Street Journal claimed Rio will walk away from its investment deal with Chinalco. The SPI closed 3 points lower at 3946. Rio fell 6.6% in UK trade.

Despite the uncertainty in that futures number, the rally in commodities offers opportunities this morning away from the big miners. There were tempting pullbacks developing yesterday for swing traders. Gotta love these markets.

Good luck to all.