February 15, 2012
- in Uncategorized by schooloftrade
Day Trading Strategies for Dollar Index , Euro, Crude, Russell and Gold futures
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The James’ Report: Day Trading Strategies for Professional Traders
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Professional
traders learn very quickly the value of technology in their careers, but for
some of us new technology means stress to learn how to use it, and we struggle
to keep up with everything new which comes out so quickly.
traders learn very quickly the value of technology in their careers, but for
some of us new technology means stress to learn how to use it, and we struggle
to keep up with everything new which comes out so quickly.
Just
like the first hammer was difficult to use for our ancestors, your first computer
may be a challenge. Just remember, to
make music that soothes the soul, we must learn to play the instrument first,
and our computers are nothing more than our ‘instrument’ so practice and find
harmony with your technology.
like the first hammer was difficult to use for our ancestors, your first computer
may be a challenge. Just remember, to
make music that soothes the soul, we must learn to play the instrument first,
and our computers are nothing more than our ‘instrument’ so practice and find
harmony with your technology.
***Notes/Observations
from around the world***
from around the world***
–
Risk appetite aided by China pledge of resources to Europe and more involvement
in EFSF
Risk appetite aided by China pledge of resources to Europe and more involvement
in EFSF
–
Eurogroup teleconference on Greece later today
Eurogroup teleconference on Greece later today
–
Greek bailout talks entered a new round of brinkmanship
Greek bailout talks entered a new round of brinkmanship
–
Major European GDP data beats expectations, Germany still contracts for the
first time in 3 years
Major European GDP data beats expectations, Germany still contracts for the
first time in 3 years
–
European shares rose after PBOC’s Governor Zhou committed to holding assets of
EU sovereign debt. Meanwhile, European leaders cancelled their meeting in Brussels
today and will, instead, hold a conference call to push Greece to commit to its
austerity measures in exchange for its aid package of €130B. Greek leaders said
they would provide written austerity promises in exchange for a EU bailout.
European shares rose after PBOC’s Governor Zhou committed to holding assets of
EU sovereign debt. Meanwhile, European leaders cancelled their meeting in Brussels
today and will, instead, hold a conference call to push Greece to commit to its
austerity measures in exchange for its aid package of €130B. Greek leaders said
they would provide written austerity promises in exchange for a EU bailout.
Speakers:
–
EU conference call on Greece said to be scheduled for 11:00 ET (1600 GMT)
EU conference call on Greece said to be scheduled for 11:00 ET (1600 GMT)
–
Greece Fin Min: Few remaining issues will be clarified at the Eurogroup
conference call today. Greece has fulfilled overwhelming part of its bailout
obligations. Few in the eurozone are ‘playing with fire’ and might even want
Greece out of the EMU
Greece Fin Min: Few remaining issues will be clarified at the Eurogroup
conference call today. Greece has fulfilled overwhelming part of its bailout
obligations. Few in the eurozone are ‘playing with fire’ and might even want
Greece out of the EMU
–
Greece PM Papdemos said to have sent the letter of commitment to EU/IMF (as
speculated)
Greece PM Papdemos said to have sent the letter of commitment to EU/IMF (as
speculated)
–
Renewed reports that Greece coalition member Samaras (ND) would commit to
austerity measures in letter at one point today with him working feverishly on
a draft at this time
Renewed reports that Greece coalition member Samaras (ND) would commit to
austerity measures in letter at one point today with him working feverishly on
a draft at this time
–
Four Greek banks are said to provide €800M collateral to satisfy Finland’s
demand for bailout participation
Four Greek banks are said to provide €800M collateral to satisfy Finland’s
demand for bailout participation
–
ECB’s Weidmann commented that any Greece exit from EMU could cause contagion
and added that it was hard to assess effects of such a scenario. He also
reiterated central bank view that there was no inflation danger at this time
but situation could change
ECB’s Weidmann commented that any Greece exit from EMU could cause contagion
and added that it was hard to assess effects of such a scenario. He also
reiterated central bank view that there was no inflation danger at this time
but situation could change
–
German Fin Min Schaueble commented in the press that he had doubts that Greece
had met its bailout conditions and that was not sure if all Greek parties were
aware of their responsibilities. He stressed that Greece must guarantee that it
will stick to pledges after elections. Germany could help Greece, but such help
would not be unlimited. Negotiations with banks over PSI were at an advance
stage.
German Fin Min Schaueble commented in the press that he had doubts that Greece
had met its bailout conditions and that was not sure if all Greek parties were
aware of their responsibilities. He stressed that Greece must guarantee that it
will stick to pledges after elections. Germany could help Greece, but such help
would not be unlimited. Negotiations with banks over PSI were at an advance
stage.
–
German FDP (coalition) member Schaeffler to oppose Greek support
German FDP (coalition) member Schaeffler to oppose Greek support
–
ECB’s Asmussen: Conditions for Finance Ministers to agree on Greek aid could be
met by the Eurogroup meeting Monday, Feb 20th. He noted that if aid was
approved the then bond exchange could begin immediately and still be completed
on time. Direct ECB contribution to
Greek second aid package was not possible. The ECB to pass any bond purchase
profits to national central banks and States, which then can be passed to
Greece as aid
ECB’s Asmussen: Conditions for Finance Ministers to agree on Greek aid could be
met by the Eurogroup meeting Monday, Feb 20th. He noted that if aid was
approved the then bond exchange could begin immediately and still be completed
on time. Direct ECB contribution to
Greek second aid package was not possible. The ECB to pass any bond purchase
profits to national central banks and States, which then can be passed to
Greece as aid
– India Divestment Sec: Not possible to achieve
INR400B divestment target for FY12
INR400B divestment target for FY12
–
China Central Bank (PBoC) Monetary Policy Report commented that the European
debt crisis could not be solved in the short-term. The Debt crisis was
spreading to the whole of EU and that a a global banking risk was rising with
threats to the real economy. The report highlighted that China continued to
face upward price pressure which would not stabilize by themselves. The PBoC
also reiterated the view of downside pressure on its domestic economy. To have
flexibly use interest rates and other tools to manage inflation and to fine
tune monetary policy at appropriate time. The PBoC also reiterated to use a mix
of policy tools to keep credit reasonable and again pledged to increase CNY
currency’s two-way flexibility and keep the yuan within a reasonable range.
Latly it vowed to continue to closely monitor capital flows
China Central Bank (PBoC) Monetary Policy Report commented that the European
debt crisis could not be solved in the short-term. The Debt crisis was
spreading to the whole of EU and that a a global banking risk was rising with
threats to the real economy. The report highlighted that China continued to
face upward price pressure which would not stabilize by themselves. The PBoC
also reiterated the view of downside pressure on its domestic economy. To have
flexibly use interest rates and other tools to manage inflation and to fine
tune monetary policy at appropriate time. The PBoC also reiterated to use a mix
of policy tools to keep credit reasonable and again pledged to increase CNY
currency’s two-way flexibility and keep the yuan within a reasonable range.
Latly it vowed to continue to closely monitor capital flows
–
China State Council: To push forward fiscal and tax reform to reverse the
widening income gap
China State Council: To push forward fiscal and tax reform to reverse the
widening income gap
–
Bank of England Inflation Report echoed recent BOE commentary and data that
inflation rate to be below the 2.% target for a good part of the forecast
period with risks to target to be broadly balance by the end of 2014. The
forecast did suggest there might be need for further stimulus. Extent and pace
Of inflation decline was uncertain.
Bank of England Inflation Report echoed recent BOE commentary and data that
inflation rate to be below the 2.% target for a good part of the forecast
period with risks to target to be broadly balance by the end of 2014. The
forecast did suggest there might be need for further stimulus. Extent and pace
Of inflation decline was uncertain.
–
BOE Gov King commented that there was substantial headwind hurting the UK
economic recovery and reiterated that further declines in inflation werere
expected. There were “challenging
times” for the UK economy. A rate hike at this time would cause a
recession.
BOE Gov King commented that there was substantial headwind hurting the UK
economic recovery and reiterated that further declines in inflation werere
expected. There were “challenging
times” for the UK economy. A rate hike at this time would cause a
recession.
Currencies:
–
The Euro benefited by continued rhetoric out of China in its support for Europe
as PBoC Gov Zhou pledged that the country’s central bank
The Euro benefited by continued rhetoric out of China in its support for Europe
as PBoC Gov Zhou pledged that the country’s central bank
would
increase its holdings of euro-denominated assets.
increase its holdings of euro-denominated assets.
–
The Eurogroup finance ministers put off the talks in Brussels, which they had
scheduled for Wednesday, and replaced them with a teleconference, saying Greek
political leaders had yet to give clear pledges on the implementation of fresh
austerity measures.
The Eurogroup finance ministers put off the talks in Brussels, which they had
scheduled for Wednesday, and replaced them with a teleconference, saying Greek
political leaders had yet to give clear pledges on the implementation of fresh
austerity measures.
Political/ In the
Papers:
Papers:
–
In its annual report, the Belgium Central Bank noted that GDP this year will
contract by 0.5% against the expected growth of 0.5% previously. It will need
to find an additional €2B in savings to achieve its budget deficit goal of
2.8%, where it is currently seen at 3.1% of GDP.
In its annual report, the Belgium Central Bank noted that GDP this year will
contract by 0.5% against the expected growth of 0.5% previously. It will need
to find an additional €2B in savings to achieve its budget deficit goal of
2.8%, where it is currently seen at 3.1% of GDP.
–
Credit agency S&P made comments today on the European risks to the Asia
Pacific banks. Under the base-case scenario, S&P assumed the global economy
will avoid a severe recession. While it expects the EMU to grow at 0.4% in
2012, it also sees a mild recession for the group. Other notable economies
include the US which it expects to avoid a recession. China is expected to
manage a soft landing with 2012 growth in the range of 7.7-8.0%.
Credit agency S&P made comments today on the European risks to the Asia
Pacific banks. Under the base-case scenario, S&P assumed the global economy
will avoid a severe recession. While it expects the EMU to grow at 0.4% in
2012, it also sees a mild recession for the group. Other notable economies
include the US which it expects to avoid a recession. China is expected to
manage a soft landing with 2012 growth in the range of 7.7-8.0%.
–
The UK Treasury has filed to sue the ECB in relation to the central bank’s
‘location policy’ per reports in the London Telegraph. The original lawsuit was
filed in the fall of 2011 and sought to block the EU’s proposal aimed at
banning clearing houses outside of the euro area from handling more than 5% of
the trade in any one euro-denominated instrument. London handles about 40% of
global over-the-counter derivative trades.
The UK Treasury has filed to sue the ECB in relation to the central bank’s
‘location policy’ per reports in the London Telegraph. The original lawsuit was
filed in the fall of 2011 and sought to block the EU’s proposal aimed at
banning clearing houses outside of the euro area from handling more than 5% of
the trade in any one euro-denominated instrument. London handles about 40% of
global over-the-counter derivative trades.
–
The Telegraph’s Evans-Pritchard commented on how weaker than expected growth in
Greece is making it more difficult for the government to reach its deficit
targets. Citing recent Greek data, the economy contracted at a rate of 7% in
the fourth quarter. According to the head of the Greek Confederation of Labour,
GDP could contract by an additional 7% in 2012. This suggests that the €325M in
cuts that Greece needs to undertake could target defense and salary reductions.
The Telegraph’s Evans-Pritchard commented on how weaker than expected growth in
Greece is making it more difficult for the government to reach its deficit
targets. Citing recent Greek data, the economy contracted at a rate of 7% in
the fourth quarter. According to the head of the Greek Confederation of Labour,
GDP could contract by an additional 7% in 2012. This suggests that the €325M in
cuts that Greece needs to undertake could target defense and salary reductions.
–
Reports out of Ireland revealed that the government has won concessions from
troika. Some proceeds from the program of asset sales will be now be reinvested
in the economy, and not strictly used to lower debts. As a reminder, last month
the Irish press reported that the Irish government and troika disagreed on the
use of funds from any asset sales. The government wanted to use majority of the
funds to facilitate employment and exports, while the troika preferred to
immediately pay down debts.
Reports out of Ireland revealed that the government has won concessions from
troika. Some proceeds from the program of asset sales will be now be reinvested
in the economy, and not strictly used to lower debts. As a reminder, last month
the Irish press reported that the Irish government and troika disagreed on the
use of funds from any asset sales. The government wanted to use majority of the
funds to facilitate employment and exports, while the troika preferred to
immediately pay down debts.
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Today’s Economic News:
Our
day trading
strategies today will depend on the news, and this morning we
have a FULL schedule to be watching, starting with manufacturing indexes at
830am EST.
day trading
strategies today will depend on the news, and this morning we
have a FULL schedule to be watching, starting with manufacturing indexes at
830am EST.
The
empire state manufacturing index saw some of the biggest improvement last month
with a 13.5 reading (above zero means good conditions) so we’re anxious to see
how this news will come out today. How
do we interpret this manufacturing news?
We see this as being a leading indicator of the recovery here in the US,
and when this news comes out higher than expected it is good for demand on
crude oil futures so price will most likely rise when we are in recovery
phases. In the future, when we get out
of this recession, this will be good for the dollar index and then crude oil
prices will actually fall, but for now what is good for the dollar index is
good for the recovery and most traders will buy crude oil because of that. Gold futures will fall with a higher reading
on this, and most likely the Euro futures will too based on the USD rising.
empire state manufacturing index saw some of the biggest improvement last month
with a 13.5 reading (above zero means good conditions) so we’re anxious to see
how this news will come out today. How
do we interpret this manufacturing news?
We see this as being a leading indicator of the recovery here in the US,
and when this news comes out higher than expected it is good for demand on
crude oil futures so price will most likely rise when we are in recovery
phases. In the future, when we get out
of this recession, this will be good for the dollar index and then crude oil
prices will actually fall, but for now what is good for the dollar index is
good for the recovery and most traders will buy crude oil because of that. Gold futures will fall with a higher reading
on this, and most likely the Euro futures will too based on the USD rising.
 |
| Empire State Manufacturing Index |
At
900am EST this morning we have another important news event, long term TIC
flows, which is difference between the US citizens purchasing abroad and people
outside the US purchasing here in the US.
This is a monthly report that has a big impact on the dollar index because
in order for someone outside the US to buy our products they first need to get
their hands on US Dollars. Also called
‘treasury international capital’ this will be a major market mover and
professional traders are always looking at this for clues for demand of our
securities here in the US. A positive
number will signal demand for our US securities and products, thus giving us
more confidence as we get out of this mess we’re in, and prices will react
accordingly.
900am EST this morning we have another important news event, long term TIC
flows, which is difference between the US citizens purchasing abroad and people
outside the US purchasing here in the US.
This is a monthly report that has a big impact on the dollar index because
in order for someone outside the US to buy our products they first need to get
their hands on US Dollars. Also called
‘treasury international capital’ this will be a major market mover and
professional traders are always looking at this for clues for demand of our
securities here in the US. A positive
number will signal demand for our US securities and products, thus giving us
more confidence as we get out of this mess we’re in, and prices will react
accordingly.
 |
| TIC Flows |
915am
EST we have industrial production, another big news event is the change in
output by manufacturers, mines, and utilities here in the US. This monthly report is a leading indicator of
economic health and when this number is
higher than expected it leads the recovery and growth of the manufacturing
sector in the US which is one the largest employers of US citizens. Crude oil will rise on a higher reading,
along with Gold futures falling with the Euro futures.
EST we have industrial production, another big news event is the change in
output by manufacturers, mines, and utilities here in the US. This monthly report is a leading indicator of
economic health and when this number is
higher than expected it leads the recovery and growth of the manufacturing
sector in the US which is one the largest employers of US citizens. Crude oil will rise on a higher reading,
along with Gold futures falling with the Euro futures.
 |
| Industrial Production |
1000am
EST we have the housing market index, and as you can see we are under water
since 2009 on this index. This monthly
report needs a reading above 50 to indicate a favorable outlook for the housing
market and last month we saw 25, not too impressive at all, and considering all
the bailout money and incentives that have been given this number is pretty
well inflated already. Not a very cheery
sign for home owners but today we will see if this trend of improving
conditions will make the housing market look ‘less worse’ than it was 30 days
again. We do not expect this to have
much impact on the markets because traders don’t trust the numbers, or the
people who release the data (NAHB).
EST we have the housing market index, and as you can see we are under water
since 2009 on this index. This monthly
report needs a reading above 50 to indicate a favorable outlook for the housing
market and last month we saw 25, not too impressive at all, and considering all
the bailout money and incentives that have been given this number is pretty
well inflated already. Not a very cheery
sign for home owners but today we will see if this trend of improving
conditions will make the housing market look ‘less worse’ than it was 30 days
again. We do not expect this to have
much impact on the markets because traders don’t trust the numbers, or the
people who release the data (NAHB).
 |
| Housing Market Index |
1030am
EST this morning is our favorite news of the week, crude oil inventories, which
are always some of the best opportunities if you know how to trade this report
correctly. First, we won’t trade after
1015am EST today on crude oil because it gets too sloppy. Second, we will wait for 1035am EST to take
our first trade, and we will wait for the market’s reaction to the news, rather
than trying to get into trades based on what we THINK should happen. Its hard to speculate what the reaction to
this news will be simply because we don’t have all the info regarding DEMAND in
the market yet. Tomorrow once this news
comes out we will hear the inventories and then the demand. The demand will be the variable I will use to
interpret how to trade this report. For
example, if inventories come out higher than expected…does that mean more
supply, or less demand? We will wait to
see the DEMAND reading and then use that to interpret where we go from there.
EST this morning is our favorite news of the week, crude oil inventories, which
are always some of the best opportunities if you know how to trade this report
correctly. First, we won’t trade after
1015am EST today on crude oil because it gets too sloppy. Second, we will wait for 1035am EST to take
our first trade, and we will wait for the market’s reaction to the news, rather
than trying to get into trades based on what we THINK should happen. Its hard to speculate what the reaction to
this news will be simply because we don’t have all the info regarding DEMAND in
the market yet. Tomorrow once this news
comes out we will hear the inventories and then the demand. The demand will be the variable I will use to
interpret how to trade this report. For
example, if inventories come out higher than expected…does that mean more
supply, or less demand? We will wait to
see the DEMAND reading and then use that to interpret where we go from there.
 |
| Crude Oil Inventories Data |
And
to wrap up our day today we know things will likely close up a little earlier
because we have FOMC Meeting minutes at 200pm EST which will have everyone’s
attention and people will sit on hands after 1100am EST most likely as they
wait for this report to come out from the Fed.
These ‘minutes’ are the notes from the Fed’s most recent FOMC-Day
meeting, which occurs 8 times per year.
Traders will be really digging into the ‘words’ that are used in these
minutes looking for clues for monetary policy and what may happen in the weeks
leading up to the next FOMC meeting.
to wrap up our day today we know things will likely close up a little earlier
because we have FOMC Meeting minutes at 200pm EST which will have everyone’s
attention and people will sit on hands after 1100am EST most likely as they
wait for this report to come out from the Fed.
These ‘minutes’ are the notes from the Fed’s most recent FOMC-Day
meeting, which occurs 8 times per year.
Traders will be really digging into the ‘words’ that are used in these
minutes looking for clues for monetary policy and what may happen in the weeks
leading up to the next FOMC meeting.
 |
| News for Day Traders |
As
always, today is a Wednesday so we will be closing for members-only after
1130am EST today. Come join us as a
member of schooloftrade.com and join today’s training!
always, today is a Wednesday so we will be closing for members-only after
1130am EST today. Come join us as a
member of schooloftrade.com and join today’s training!
Please SHARE this resource with
friends, they want to learn this too!
friends, they want to learn this too!
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