daytrade diaries... september 28

Morning traders.

Market wrap: Stocks will open in the red this morning for the third straight session after another soft night on Wall Street.

Local futures traders marked the SPI futures index down 20 points to 4705 as US investors fretted over weak manufacturing demand and disappointing home sales. US equities finished lower for a third session to complete their first losing week in three. The S&P 500 lost 0.61%, the Dow 0.44% and the Nasdaq 0.79%. European markets were mixed. The FTSE closed 0.06% higher but the CAC fell 0.51% and the DAX by 0.42%.

Demand for durable goods in the US unexpectedly fell last month. Manufacturers' orders for durable goods dropped 2.4% - economists surveyed by Dow Jones Newswires had projected orders would climb 0.3%. Also harming sentiment: sales of new homes rose less than forecast and tech heavyweight Research In Motion released a disappointing earnings forecast and saw its shares plunge nearly 17%. The triple whammy of bad news confirmed concerns over the strength of the recovery in the US.

Telecoms were notably weak in the US, falling 2.44%. Tech stocks lost 1.46%, transport 1.02% and banks 0.57%. Airlines advanced 2.35%, oilers 0.29% and REITs 0.21%.

Crude oil futures had their worst week in two months, falling 8.4%, but finished Friday marginally ahead for the session. Crude inched 0.2% higher to $66.09 a barrel in choppy trade. Gold futures ended lower for the first week in six. On Friday, the spot gold price slipped $3 to $990.70. Silver sank 1.4% and October platinum declined 1.8%.

Base metals were mixed. Copper rose 0.5% in London. Tin, lead and zinc also gained but nickel and aluminum fell.

TRADING THEMES TODAY

BUY THE DIPS: Friday's ASX action confirmed that there is a ton of money sitting on the sidelines waiting to enter the market. At the first whiff of takeover action among the big banks the institutions piled into financials, sending our market higher against the global trend. That was a very bullish signal. Sentiment may be fragile elsewhere but this bull market is very much alive in Australia.

AIRLINES: The pick of the sectors in the US on Friday, rallying 2.35% after UBS upgraded its ratings for five carriers. Analysts are convinced that the outlook for beaten-up airlines is improving.

ECONOMIC NEWS: It's a quiet day locally but US investors have two indicators to ponder tonight: the Chicago Fed's National Activity Index will show whether US economic activity is continuing to pick up; and regional manufacturing data due from the Dallas Fed will show whether manufacturers are ramping production.

Good luck to all.