Despite a lack of triggering data, animal spirits were evident in overnight trading. All three major US indices hit record highs as a wave of bullish sentiment swept the globe. Starting in the Asia Pacific region, the rally also lifted European markets significantly.

Local investors shrugged off weaker than forecast GDP data yesterday as many economists typified it as a turning point rather than an emerging trend. Investors of both persuasions possibly saw positives in the numbers. Shareholders looking for a bounce next quarter added to portfolios on the better outlook.Those seeing a weakening economy bought shares on the back of a potentially lower interest rate environment.

The potential for strong trading in Australia is enhanced by a further surge in iron ore, although weaker oil and copper prices may dampen other resource stocks. The Australia 200 index is at an important chart level, and a push higher today may see technical buying driving a Santa rally into year end. The line in the sand is 5521 – a close above that point will almost certainly see traders buying this important technical signal.