daytrades jan 18 pre-market

Morning traders.

Market wrap: Shares face an uncertain start today after a soft night for commodity prices and a mixed session in Europe.

With U.S. markets closed overnight for the Martin Luther King Jr public holiday, the local March SPI futures contract last traded at midnight, closing 3 points or 0.06% stronger at 4748. However, the rest of the night delivered pull-backs in oil, industrial metals, U.S. futures and most European markets.

U.S. futures are currently pointing to a moderately weak start to trade tonight following yesterday's 3.03% plunge in Shanghai, an overnight rally in the U.S. dollar and news that Apple CEO Steve Jobs is taking a medical leave of absence. S&P 500 futures were down 0.35%, Dow futures 0.17% and tech-heavy Nasdaq futures a hefty 1.31%.

The Shanghai Composite yesterday suffered its biggest fall in two months as investors sold real estate and financial stocks following Friday's move to tighten bank lending restrictions. The People's Bank of China lifted banks' required reserve ratio on Friday for the seventh time since the start of 2009, by half a percentage point.

U.S. futures soured after Apple's popular CEO Steve Jobs announced he will take another leave of absence to deal with his health. Jobs suffered pancreatic cancer in 2004 and took a six-month leave of absence last year for a liver transplant.

Commodity prices came under pressure from a modest reversal in the U.S. dollar as optimism faded for an overnight meeting of European financial leaders to discuss the debt crisis in the euro-zone. The U.S. dollar index, which marks the greenback against a basket of major currencies, was recently stronger for the first day in six, rising 0.24% after German Finance Minister Wolfgang Schaeuble ruled out any quick increase in the size of the European Union bailout fund for debt-laden euro-zone countries.

"[European] Ministers seem to want a comprehensive plan that does not focus on bailing out one country or another, as this clearly doesn't work," a currency and fixed-income strategist at Standard Bank told MarketWatch. "Instead, a euro-wide plan is needed. But can ministers come up trumps, end the crisis and ensure that the euro rides off into the sunset safe and secure and heading for 1.50 against the dollar? We don't think so."

The major European markets finished mixed. Britain's FTSE fell 0.27% and France's CAC 0.2%. Germany's DAX was little changed at +0.03%.

Crude oil eased 52 cents or 0.57% to $91.02 a barrel. Spot gold was little changed, recently trading 30 cents weaker at $1,361.50 an ounce.

Industrial metals mostly retreated in London as the rise in the U.S. dollar lifted asking prices for holders of other currencies. In late trade in London, copper was down 0.5%, aluminium 1.5%, lead 1.3%, nickel 0.3% and zinc 0.7%. Tin was up 0.2%.

TRADING THEMES TODAY

WATCH CHINA: It's never easy to get a clear read on the prospects for the day when U.S. markets are closed, but if yesterday's action tells us anything it's the need to keep a close watch on China right now. Our resource stock-heavy market is traded by many overseas investors as a proxy for China, and Friday's increase in Chinese bank lending restrictions has spooked the market. The Shanghai Composite has been sliding since mid-November and the chart looks pretty grim after yesterday's drop. (See here.) Overnight falls in oil and industrial metals add to the pressure on our market today. We could see a rebound from yesterday's unexpected weakness but much will depend on how Shanghai trades today.

ECONOMIC NEWS: No major local economic news scheduled today. The U.S. returns tonight with regional manufacturing, long-term purchases and the housing market index.

Good luck to all.