daytrading may 21 pre-market

Morning traders.

Market wrap:

A cautiously positive start to trade is likely after strength in commodities partly offset a stuttering finish on Wall Street.

The June SPI 200 futures contract edged up seven points or 0.1% to 5227 as the big two miners gained in US trade, metals rebounded and oil rallied for a fourth night.

US stocks surrendered mid-session gains as the debate over a winding back of the Federal Bank's stimulus program rumbled on. The S&P 500 was up as much as 0.3% at mid-day but faded to a loss of one point or 0.09%. The Dow dropped 19 points or 0.13% and the Nasdaq lost 0.08%.

With no significant economic data to set the agenda, the night's headlines were dominated by conflicting views on the outlook for the Fed's bond-buying program from two Fed members. Dallas Federal Reserve President Richard Fisher said he would have started to reduce the program at the last Fed meeting, while Fed Bank of Chicago President Charles Evans said the current level of stimulus was appropriate for now. The comments came as the market waits for Fed Chairman Ben Bernanke's testimony before Congress and the release of the minutes from the last Fed meeting, both tomorrow.

"Some minor pullback should be expected after the steady gains we've achieved," the chief investment officer at First Citizens BancShares in the US told Bloomberg. "I don't think that we're going to see any immediate tapering off of monetary policy, though we can expect from hawkish members or others outside the FOMC questioning the policy, which might lead to market volatility."

A milestone night for US small caps saw the Russell 2000 index crack the 1,000 level for the first time before fading to 998 and a closing gain of 0.17%. The Morgan Stanley Cyclical Index also resisted the headwinds, rising 0.23%, but the Dow Jones Transportation Average sagged 0.58%.

BHP and Rio Tinto advanced in US trade despite a slump in iron ore to a five-month low. BHP put on 0.61% and Rio added 1.6%. Iron ore with 62% iron content yesterday fell to US$123 a tonne, the lowest since December, according to The Steel Index.

"Chinese mills appear to be undertaking yet another iron ore destock, resulting in the usual price weakness," an analyst at Macquarie in Shanghai told the Financial Times [subscription required]. "In our view, prices will continue to fall over the coming weeks until destocking is complete.”

An index of US precious metals miners surged 5.72% after gold bounced back from a seven-session losing run in a flurry of short-covering. Gold for June delivery was recently up $26.70 or 2% at US$1,391.50 an ounce. Silver for July delivery rallied 50 cents or 2.3% to US$22.86 an ounce. Read more here.

Base metals benefitted from a retreat in the US dollar and a drawdown in Shanghai copper inventories. US copper for July delivery was recently up 0.95% or three cents at US$3.35 a pound. In late trade in London, copper was ahead 0.8%, aluminium 0.8%, lead 3%, nickel 1.65%, tin 1.6% and zinc 1.3%.

Oil extended its rebound into a fourth night. West Texas Intermediate crude oil for June delivery was lately ahead 63 or 0.7% at US$96.66 a barrel.

Britain's FTSE 100 hit its highest level since September 2000 overnight as European markets caught the early rise on Wall Street but closed ahead of the fade. The FTSE gained 0.49%, Germany's DAX 0.69% for another record close and France's CAC added 0.54%.

TRADING THEMES TODAY

CONSOLIDATING THE BREAKOUT: A quiet night on Wall Street offers the ASX little impetus today, but the close likely wasn't negative enough to stoke a sell-off following yesterday's XJO charge to a new 58-month high. The excitement came in commodity markets, where those who bet on a short-term low in gold yesterday were proved right. US goldies enjoyed a huge rebound, with obvious implications for our own beaten-up gold sector today. Financials were solid in the US but biotechs eased with the general market. The minutes from the last Reserve Bank meeting are due at 11.30am EST and have the potential to move the market if there is any significant change in tone. The dollar, currently buying 98.17 US cents, will tell the story.

ECONOMIC NEWS: The Conference Board's leading index is due at 10am EST, followed by the minutes from the last RBA meeting at 11.30. The light run of economic data in the US continues tonight with speeches from a couple of Federal Reserve members likely to garner attention ahead of Ben Bernanke's Congress testimony tomorrow.

Good luck to all.