daytrade diaries... october 9

Morning traders.

Market wrap: The ASX looks set to open at a new 2009 high after solid gains on global equity markets and a great night for resources.

American investors welcomed Alcoa's strong earnings report and evidence of growth in the U.S. economy by sending the major indexes higher. The Dow rallied 0.63%, the S&P 500 0.75% and the Nasdaq 0.64%.

Alcoa launched the Q3 earnings season in the US yesterday with a $77 million profit, ending a string of losses. Also cheering investors was an eighth straight weekly gain in corporate borrowing. Analysts said recent data suggested growth of 3% in U.S. GDP for the third quarter, pointing to a better-than-expected earnings season.

In other promising signs for recovery in the U.S., initial claims for jobless benefits last week fell to the lowest level since January and retailers posted better-than-expected September same-store sales.

Resources-related stocks spearheaded gains in the US. Oilers advanced 2.1%, natural gas companies 3.47% and precious metals miners 1.29%. Financial stocks were generally softer but there were gains for REITs +1.76%, airlines 2.11%, industrials 1.15% and transport stocks 1.32%.

The major European markets closed higher. The FTSE added 0.9% and the CAC and the DAX both gained 1.34%.

Continuing weakness in the US dollar combined with a renewal of economic optimism to send resources higher. Crude oil futures rallied 3% to $71.37 a barrel. Gold futures advanced $12 to $1,056.30.

It was a terrific night for base-metal bulls. Zinc surged 7.22% in London to a 15-month high. Copper hit a three-week peak, up 3.95% and there were strong advances for others: aluminium up 3.52%, lead +5.8%, nickel +3.9% and tin +1.53%.

Our market has run hard this week but futures traders expect another green open. The SPI futures index was 20 points higher at 4792.

TRADING THEMES TODAY

BASE METALS: Oilers and goldies should continue to do well today but the big gains are likely to be in metals miners. Lats night's moves were significant. A breakout in zinc and the rest pushing back towards the old yearly highs.

FRIDAY FADE?: This has been a bumper week. The news has been so unrelentingly positive that it's hard to see why our market shouldn't kick on for a third day. However, the U.S. reaction to some very healthy economic signals was more subdued than might have been expected last night - there were good reasons for the key indexes to push higher than they did. It will be interesting to see if our market can hold its initial gains after the opening bell.

ECONOMIC NEWS: A quiet 24 hours ahead. Nothing significant locally and August trade balance figures tonight in the US. Next week is busier.

Good luck to all.