daytrade diaries... september 4

Morning traders.

Market wrap: There should be relief for local stocks this morning after Wall Street broke its losing streak and gold neared the $1000 mark.

Trading in the U.S. was volatile ahead of tonight's monthly employment report. Stocks swung in and out of positive territory as traders digested disappointing jobless claims and service-sector activity, but turned decisively higher in the final hour of trade. The S&P 500 closed 0.85% higher, the Dow added 0.69% and the Nasdaq 0.82%.

Initial claims for jobless benefits fell 4,000 to 570,000 in the week ended August 29, but analysts had hoped to see a deeper decline to 562,000. In another report, a service sector index came in at 48.4 in August, an improvement from a 46.4 reading in July but still a level that suggests the sector is contracting and below analysts' expectations of a reading of 48.8.

The market was buoyed by a recovery in financial stocks (+2.5%) and a second day of gains for gold miners (+4.65%) and airlines (+3.46%). Earlier, European markets lost around 0.5% each.

Goldbugs cheered gold's charge towards the $1000 resistance level and a new six-month high. Gold for December delivery, the most active contract, gained $19.20, or 2%, to $997.70 an ounce in US trade after touching $999.50.

Crude oil futures were little changed for a second day, trading recently at $68.09. Base metals recovered some of this week's losses after yesterday's 4.8% bounce in Chinese stocks eased fears of fading demand for industrial metals. In London, copper for delivery in three months rose 1.3%. Zinc, aluminum, tin and nickel prices all rose, and lead surged to a new 12-month high.

Futures traders expect a positive start to the local trading day. With 30 minutes left to trade, the SPI futures index was up 22 points at 4454.

TRADING THEMES TODAY

GOLD: This is the moment goldbugs have been waiting for. Will the $1000 resistance level shatter at the fifth attempt in the last two years? If it does, the gains on the other side are likely to be quick and lucrative. This should be another boom day for our gold miners.

US AUGUST JOBS: Trading on the local market today is likely to be cautious ahead of tonight's monthly jobs report in the US. There has been a definite change of sentiment on Wall Street this week, with good news ignored and bad news embraced as a reason to sell. A bad jobs figure tonight will likely see a resumption of this week's downtrend. I'll look to sell into any strength on our market today.

Good luck to all.