daytrade diaries... september 11

Morning traders.

Market wrap: A fifth straight winning session on Wall Street points to a strong end to the week for local stocks.

A larger-than-expected drop in weekly jobless claims helped US indexes close at fresh 2009 highs. The S&P 500 put on 1.04% overnight, the Dow Jones added 0.84% and the Nasdaq again set the pace at +1.15%. The gains came despite news that the US trade deficit registered its biggest increase in more than 10 years in July.

Airline stocks soared after analyst upgrades. The Nyse Arca Airline index roared 6.67% higher. Also advancing in a broad rally were precious metals miners, up 3.21%, oilers +1.42%, REITs +1.34%, telecoms +2.16 and banks +0.32%. European markets were mixed - the Dax rose 0.37% but the FTSE slid 0.33% and the CAC was near flat at -0.05%

Crude oil futures survived a choppy session to advance for a fourth day, their longest winning streak in four months. A bigger-than-expected drop in US inventories and news that the International Energy Agency raised its forecast for global oil demand helped crude futures rise 0.88% to $72.24. Natural gas futures bounced off last week's seven-year low and surged 15% after data showed US inventories rose less than expected.

Gold futures remained under pressure despite a weakening US dollar. December gold futures, the most actively traded contract, edged down 30 cents to $996.80. Base metals reversed course after yesterday's positive session. Copper fell 1.9% as rising inventories aroused demand fears. Inventories monitored by the Shanghai Futures Exchange have increased for six straight weeks. Lead, aluminum, nickel, tin and zinc also fell in London. Lead tumbled hard and nickel hit its lowest level since early August.

Futures traders expect our market to build on this week's strong advance. With 30 minutes left to trade, the SPI futures index was up 47 points at 4612.

TRADING THEMES TODAY

OIL: Crude oil's longest winning streak in four months points to further gains for our oilers today.

CHINA: The economic interest today lies in China, where a slew of important indicators will be released at 12 pm our time. Local investors will look to the August industrial production and retail sales figures and producer price index for confirmation that China's V-shaped recovery remains intact. Any weakness would be bad for our miners.

FRIDAY FADE: This has been a very good week and we can expect some profit taking before 4 pm today. If the usual Friday pattern plays out, we will see healthy gains at the open, a reasonable morning and then a gradual drift south to the close.

Good luck to all.