daytrades september 21 pre-market

Morning traders.

Market wrap: Stocks are set to open at a four-and-a-half month high after U.S. equities smashed a major resistance level overnight.

The local December SPI futures contract closed 42 points stronger at 4693, which suggests the share market will start the day around 1% higher.

Wall Street surged to its highest level since mid-May after the National Bureau of Economic Research declared the post-GFC recession ended last June. The benchmark S&P 500 index rallied 17 points or 1.52% to 1,143, the Dow added 146 points or 1.37% and the Nasdaq continued to outperform both, rising 1.74%.

"Buyers were able to take the S&P above 1,131 resistance. If the S&P closes above 1,131, rally hats will be on," Elliot Spar, market strategist at Stifel, Nicolaus told MarketWatch ahead of this morning's close.

The National Bureau of Economic Research is the accepted U.S. authority on the duration of economic cycles. The bureau declared overnight that the longest U.S. recession since the Great Depression ended in June 2009 and lasted 18 months.

Also helping sentiment overnight was a US$1.7 billion takeover offer from IBM and a strong profit result from the US's third largest home-builder, Lennar. The news overshadowed a blowout in bond yields in Ireland and Portugal that suggested investors are once again worrying about the danger of sovereign defaults in Europe. The gap between yields on Irish and German bonds topped 400 points for the first time, and Portugal's gap hit 393 points.

"Better news out of the U.S. has offset bad news out of Europe," the chief investment strategist at Prudential International Investments Advisers told Bloomberg. "We've been watching U.S. economic data stabilise. There's also positive news on the M&A front as companies are sitting on a lot of cash. There's concern about Europe, but they will probably make sure there will be no major defaults."

The U.S. dollar eased as risk appetite picked up. The dollar index, which tracks the greenback against a basket of currencies, eased 0.15%, raising the appeal of dollar-denominated commodities for overseas buyers.

Oil rallied for the first session in five. Crude futures added 94 cents or 1.3% to $74.60 a barrel.

Gold marked a new record high but silver pulled back from the 30-year high set on Friday during a mixed night for metals. The spot gold price was recently $3.40 stronger than Friday's New York close at $1,278.10 an ounce after earlier breaking $1,183.

Industrial metals were mixed in slow trade due to a string of Asian holidays this week. In late trade in London, copper was down 0.2%, lead 1.5%, nickel 0.9% and tin 1.7%, while aluminium was up 2.1% and zinc 0.9%.

In Europe, the rise in Wall Street overtook any concerns over sovereign debt. Britain's FTSE surged 1.71%, Germany's DAX 1.37% and France's CAC 1.77%.

TRADING THEMES TODAY

KEY RESISTANCE GONE: Bulls rejoice. Last night's sharp rise blew away major overhead resistance in the U.S. and clears the way for this three-week rally to extend into a fourth week. Yes, the rally looks over-extended by some measures but we all know that indicators can remain in overbought territory for a long time before markets turn south. In my opinion these are the best trading conditions we have seen since the initial post-GFC rally after the market bottomed in March last year. The debt situation in Europe is an obvious worry - but for now, Wall Street frankly doesn't give a damn.

ECONOMIC NEWS: The minutes from the last RBA policy meeting are released at 11.30 am. The beleaguered housing market and interest rates are tonight's main focus in the U.S. Scheduled reports include building permits, housing starts and a rate-setting statement from the Federal Reserve.

Good luck to all.