daytrade diaries... september 14

Morning traders.

Market wrap: Local stocks look set for a soft start to the week after Wall Street snapped its winning streak and key commodities retreated.

Futures traders expect our market to open marginally in the red. The SPI futures index closed 4 points lower at 4594 after the US ended its best week in a month with minor losses on Friday. The Dow's five-day winning run ended with a fall of 22 points or 0.23%. The S&P 500 lost 0.14% and the Nasdaq 0.15%. Major European markets added 0.48 - 0.78%.

Financials were the main drag on Wall Street, with banking indexes sliding 0.77 - 1.17%. The transportation sector, often seen as a bellwether for the health of the economy, was notably strong, rising 2.22%.

Also rising was the precious metals sector, up 1.2% after gold ended higher for a fourth straight week. The spot price closed the week at $1005.10, up nearly $10 on the day, as the US dollar hit a one-year low against the euro. But crude oil futures tumbled after Chinese data showed imports fell 6% from July's record high intake. Oil finished 3.69% lower at $69.12 a barrel

Base metal prices also came under pressure, with all except tin losing ground. Copper fell 0.7% in London trade to a one-week low after inventories in China leaped to their highest level in two years. Stockpiles monitored by the Shanghai Futures Exchange climbed 12% last week to the most since June 2007.

TRADING THEMES THIS WEEK

BRIGHTENING US ECON0MIC OUTLOOK? It's a big week for economic news in the US and expectations are high. Tuesday night's retail sales report will be watched closely for evidence that the government's cash-for-clunkers hand-out translated into a surge in retail sales. There are other important economic markers later in the week. Read more here: http://www.marketwatch.com/story/if-you-give-people-4500-they-will-spend-it-2009-09-13

GOLD: The soaring price may not mean much in Australian dollars but the uptrend is intact and will continue to generate strong interest in local gold miners. Friday's record close points to further gains this week.

OVERBOUGHT? As Redbacka suggests in his highly-recommended weekly XJO "snippets" (post #4480504), several indicators suggest this raging bull market is overbought in the short term. A period of consolidation to digest recent gains would be healthy but there's no evidence yet of the "September effect" kicking in. Indeed, the 5000 mark on the XJO looks increasingly attainable before the end of the year.

Good luck to all.