daytrades march 15 pre-market

Morning traders.

Market wrap: Local stocks look likely to remain range-bound for a fourth day after a flat end to last week on Wall Street and some softening in key commodity prices.

Futures traders expect our market to open just one point higher this morning. The March SPI futures contract finished at 4820, within a few points of the last three closing prices as the market has drifted sideways.

The major U.S. stock indexes closed mixed but little changed on Friday and with gains of 0.6% - 1.8% for the week. On Friday, the Dow climbed 13 points or 0.12%, the S&P 500 lost 0.02% and the Nasdaq 0.03%.

Mixed reports on the American consumer offered the market little direction. Retail sales rose 0.3% last month, matching expectations, but the consumer sentiment index fell from 73.6 to 72.5, against economists' expectations for a rise to 73.8. Business inventories were unchanged in January, reflecting lacklustre sales and missing expectations for a rise of 0.1%.

The 10-day rally in financial stocks which has carried the market higher finally snapped after a rise of nearly 7%. Traders have been buying recipients of government bailout money on expectation that the government may soon look to unload its stakes in companies such as AIG, Citigroup, Freddie Mac and Fannie Mae.

Traders said the rally in financials was healthy for the short-term outlook.

"It's good to see them showing some leadership again, since you really need the financials to participate in order to have a bull market that lasts," a trader in Cincinnati told MarketWatch. "They were the ones that got us into the mess, and to a certain extent, they have to bring us out."

Hugh Johnson, chairman of Johnson Illington, told MarketWatch that last week's incremental rises in the market were a healthy sign.

"We've got a market right now that in some ways is very news-sensitive, but the news has not been enough to move it decisively up or down, so we're just noodling. As boring as that might be, it's very healthy."

A softening U.S. dollar did not do much for commodity prices. The dollar index, which measures the greenback against six major currencies, dipped to its lowest level in almost a month but gold, oil and copper all lost ground.

Crude oil futures fell back from the January resistance level, sliding 1.25% to $81.24 a barrel after the soft consumer sentiment reading.

The spot gold price fell $8.10 to $1,101.50 an ounce and needs to hold around these levels for the recent up-trend to remain intact (see below).

Copper continues to track sideways as a softening greenback balanced long-term concerns about Chinese demand. In London, copper edged 0.05% lower but other metals were modestly stronger - aluminium +1.1%, lead 0.6%, nickel 2%, tin 1.1% and zinc 0.1%.

The major European markets pushed higher but pared gains by the close. Britain's FTSE climbed 0.15%, Germany's DAX 0.28% and France's CAC was near flat at -0.04%.

TRADING THEMES THIS WEEK

BREAKOUT: Our market has been treading water for three sessions and the futures suggest little will change today. However, these narrow range-bound spells never last and we're due a sharp move one way or the other in the next two or three sessions. There is a fair case to be made for a break in either direction - bulls can point to U.S. indexes at 17-month highs and the fact long-term up-trends are intact, while bears can call on over-extended stochastics and evidence of buyer fatigue after a strong move north. Frankly, a strong move in either direction will come as a relief to this daytrader after last week's sluggish low-volume, low-volatility sessions.

GOLD: The strength of the recent recovery will be tested in the next few sessions as the price hovers above support just below $1,100 an ounce. A break below $1,090 would be bad news for gold bulls and could see a decline back towards the February four-month low above $1,060.

ECONOMIC NEWS: The local news-flow slows this week with the local highlight probably the minutes from the last RBA meeting due tomorrow. There is nothing major scheduled today. The U.S. has a solid schedule this week, starting tonight with manufacturing, industrial production, long-term securities and the housing market index.

Good luck to all.