daytrades june 18 pre-market

Morning traders.

Market wrap: A late rally on Wall Street and a new record high for gold point to a modestly positive start to local trade despite a weak overnight session for most commodities.

The September SPI futures contract advanced 8 points this morning to 4540 after the Dow Jones Industrial Average reversed a 90-point fall in the final minutes to finish 25 points or 0.24% stronger. The benchmark S&P 500 added 0.13% to hold above its 200-day moving average for a third day and the Nasdaq edged 0.05% higher.

U.S. investors once again largely ignored weak local economic data and focused on Europe, where a successful Spanish bond sale bolstered hopes that the euro-zone is muddling through its debt crisis.

"The economic news is pretty tepid, but the good news is Spain had a relatively good auction. So there's a tug-of-war between economic fundamentals and sovereign debt issues," the chief investment officer at Jurika, Mills & Keifer told MarketWatch.

The major U.S. stock indices were underwater for most of the session as jobless numbers and regional manufacturing added to a growing list of disappointing economic reports over the last few weeks. The federal government reported an unexpected increase in first-time unemployment claims and the Philadelphia Federal Reserve said manufacturing in its area expanded this month, but slowed from last month.

Other overnight U.S. economic reports were more positive. An index of leading economic indicators climbed 0.4% in May, pointing to expansion into the second half of the year, and consumer prices fell 0.2% last month for the second month in a row, dismissing inflation fears.

"The market over the past two days - given the economic data we've gotten - it's actually held up, and I'm pretty impressed," a manager at Greenwood Capital in the U.S. told Bloomberg. "I was expecting it to sell off a little bit harder, but [the S&P 500 has] been able to stay above that 200-day [moving average] level and that's good."

However, other market observers warned that the outlook for the U.S. was deteriorating. "Economic surprises, which had been very positive, are now becoming negative," an investment manager at Fiduciary Trust in the U.S. told Bloomberg. "If we continue to see economic deceleration happen, including what looks like a double dip in housing, maybe we have to look at those earnings with much more questioning eyes."

The weak economic news took a toll on commodity prices, despite a slide in the U.S. dollar. The dollar index, which measures the greenback against a basket of currencies, was recently down 0.5%.

Oil has been tracking the recent rebound in equities but sagged on demand worries. Crude futures were recently down $1.09 or 1.4% at $76.58 a barrel.

Industrial metal prices fell back as a subdued return by Chinese traders from a three-day holiday raised demand concerns. Copper slipped to a near-one-week low after the first rise in London Metals Exchange stockpiles in a month. In late trade in London, copper was off 3%, aluminium 3%, lead 1.4%, nickel 2.4%, tin 1.1% and zinc 4%.

Gold was the main beneficiary of the weakening outlook in the U.S., charging to a new record high. The spot price was recently $15 higher than Wednesday's New York close at $1,245.10 an ounce, after earlier punching through $1,250.

European equities advanced for a seventh straight day but pared gains as U.S. economic news filtered into the market. Britain's FTSE added 0.3%, Germany's DAX 0.53% and France's CAC 0.19%.

TRADING THEMES TODAY

EDGING HIGHER: Another fascinating night's trade for students of market psychology. Two weeks ago, those economic reports in the U.S. probably would have sent the Dow down 200-300 points. But for now, at least, momentum is upwards and the market is in a very forgiving mood. Every day the S&P 500 holds above its 200-day moving average adds to the argument that this rebound has legs. I remain cautiously bullish about the near-term direction, with the caveat that U.S. investors can only ignore so much bleak economic news before something cracks.

GOLD: A golden night for the true believers as the precious metal broke decisively out of its recent trading range. Momentum buyers jumped on board once the break-out took place. Analysts at Goldman Sachs last night told clients they expect prices to rise through to 2011. Their report said the current pace, if sustained, points to a price around US$1,400 per ounce by the end of this year.

ECONOMIC NEWS: A busy week ends in silence - there's nothing scheduled here or in the U.S. tonight.

Good luck to all.