daytrading sep 18 pre-market

Morning traders.

Market wrap:

A flat open is likely after US stocks broke a four-session winning run and key commodities pared recent rallies.

The September SPI 200 futures contract ended the night session one point or less than 0.1% weaker at 4397 as a rise in the price of iron ore yesterday offset overnight declines in oil and most metals.

US stocks retreated after disagreements re-emerged among European finance ministers over the continent's sovereign debt crisis and a gauge of regional US manufacturing hit a two-year low. The S&P 500 closed 0.33% in the red despite a late bounce that trimmed a heavier initial fall. The Dow lost 40 points or 0.3% and the Nasdaq 0.16% as Apple hit an all-time high.

"It looks like we need to take a smaller breather after the sizable rally that we've had," the managing director of active trading and derivatives at Charles Schwab in the US told Bloomberg. "There's the potential for a small pull-back, but I think we will move back into bull territory later in the week unless there's an unexpected negative news event."

US stocks followed European markets lower after a meeting of euro-zone finance ministers on the weekend failed to agree on a range of issues seen as important to treating the region's debt problems. The meeting failed to find common ground on plans for a more unified European banking system, a bailout plan for Spain and Greece's failure to meet the austerity terms for its rescue. The disagreements helped drag Germany's DAX down 0.11%, France's CAC 0.77% and Britain's FTSE 0.36%.

Also weighing on confidence was yesterday's 2.16% dive on the Shanghai Composite and a sharp deterioration in the Empire State Index, which measures manufacturing activity in the greater New York region. The index declined to -10.4 this month from -5.9 in August, its weakest reading since November 2010.

Falls among equities accelerated after market rumours that the US will release some of its strategic oil reserves fuelled a sudden plunge in the price of crude. West Texas crude for October delivery, which had been trading as high as US$99.56 a barrel, crashed to US$94.65 in just 20 minutes before recently paring its loss to $2.46 or 2.5% at US$96.53.

The jittery action in oil unsettled other markets, including gold. Gold for December delivery was lately down $9 or 0.5% at US$1,763.70 an ounce. Silver and platinum also pared recent advances.

Most industrial metals gave back a little of the surge on Friday that followed the launch of QE3 in the US. In London, copper lost 0.95%, aluminium 1.3%, lead 0.35%, tin 0.4% and zinc 1.3%. Nickel put on 2.5%. US copper for December delivery was recently down eight cents or 2% at US$3.76 a pound.

Spot iron ore yesterday rallied for a second day in China, rising $3.50 or 3.4% to US$105.10.

TRADING THEMES TODAY

CONSOLIDATION: No surprise to see markets take a breather overnight after several days of gains. Futures traders obviously don't see much cause for concern for our market this morning and nor do I. Unless news breaks or the falls accelerate, this looks like a standard pullback before a move higher. However, the action in the oil market shows that there are plenty of traders ready to lock in profits if markets start to reverse. Another worry is yesterday's 2.16% slide on Shanghai - the ASX won't be able to ignore that scale of reversal if it continues in the days ahead. Biotechs were a bright spot in the US overnight as cyclical stocks hit reverse. Banks and oil-related companies were notably weak.

ECONOMIC NEWS: The minutes from the last Reserve Bank rates meeting are due at 11.30am EST. Assistant Governor Guy Debelle is due to deliver a speech about regulatory reforms commencing at 1pm. Europe releases economic sentiment data tonight. A light menu in the US includes the current account, long-term purchases and the housing market index.

Good luck to all. (And welcome back Cgull.)