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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Creation
is the process from which something comes out of nothing, and every trader is
an example of this. As humans we are
created from nothing, if you look back millions of years our planets were
created from nothing, etc, etc.
Everything manifests from nothing, with unlimited potential, and this
morning we want to step back and appreciate this opportunity to make something
from nothing today in our trading strategy.
The more we understand this simple fact, the more prepared we will be
for every trading day.

***Notes/Observations
from around the world***

– Moody’s downgrades 6
European sovereigns (Italy, Spain, Portugal, Slovakia, Slovenia & Malta)
lowers outlook on several AAA (UK, Austria and France)

–
BOJ sets an inflation target (and cranks up the printing press); Announced
further easing measures (first since Oct)

–
Fed’s Williams (voting member): Vital to keep policy throttle wide open.

– Germany ZEW Survey
registers its first positive reading since May 2011

–
UK inflation data declines in Jan as expected by BOE

–
European shares traded mixed during today’s session hurt by Moody’s action
which downgraded 6 European states, including Italy and Spain. The most
worrying action for the markets is Moody’s cutting UK’s and France’s outlook to
negative from stable. However, Italy sold its debt in the indicated range.
Losses were limited after Germany’s ZEW increased and was a positive
number, beating analysts’ estimates.

Speakers:

–
China Premier Wen met key European officials in Beijing and hereiterated that
China was ready to “get more involved” to help Euro debt and
maintained confidence in Euro. He also hoped EU maintained its stability and
prosperity and supported strengthening of fiscal discipline in Europe

–
EU President Van Rompuy welcomed China’s PM Wen support for Europe and noted
that both regions were becoming increasingly inter-dependent. China was making
progress on its CNY currency rate and rebalancing its economy. China showed
“solid interest” on EFSF investment

–
EU’s Barroso commented from Beijing that EU was doing what was necessary to
restore confidence and that the region was seeking more investment access in
China

–
Austria Fin Min Fekter commented that she was confident that Greece would get
more help. She noted that no Austrian banks have asked for aid

–
Bank of Japan Gov Shirakawa commented at his post rate decision press
conference that the BOJ would not end
its inflation targeting until the 1% CPI rise was in sight. He stressed that
the BOJ would ensure Japan’s economic recovery through its policy and that the
central bank was not pressured by gov’t in today’s action but both did share
the perspective of what is deemed as price stability. Today’s decision meant
buying JGBs at a faster pace

But
not use JGB purchases for monetizing debt. The change in wording on prices
aimed at clarifying BoJ’s determination to deal with deflation.

–
ZEW Economists commented after the better Feb data that the economic slowdown
in Germany was unlikely to last as domestic demand expected to support economic
growth. It stressed that a solution to Euro Zone crisis remained an important
issue but progress with Greek creditors might have reduced uncertainty. Lastly
it noted that Germany might see slight uplift in H2 2012

–
ECB’s Nowotny reiterated the central bank view that it did not see risk of
inflation. He cautioned that Euro region needed to avoid the same fate as
Japan’s. The main objective was to avoid longer periods of stagnation.

–
ECB’s Coeure commented that the ECB should distribute profits on Greek debt to
member nations who could use it to contribute to sustainability of Greek debt

–
Bank of England released its inflation letter noting that inflation was falling
broadly as expected and expected to hit around target of 2.0% by end of 2012.
Impact of factors that pushed up inflation was now waning. CPI decline due to
VAT and energy prices but cautioned that a risk of an oil shock was possible
due to political tensions. Extent of CPI
decline was highly uncertain with key uncertainties of wages and profit margin
building. To focus on spare capacity and inflationary expectations and that the
key policy outlook was the medium-term view

–
France Fin Min Baroin commented on Moody’s lower revision of the French
sovereign outlook that the Govt will continue to seek an increase its economic
growth and competitiveness. He noted that Moody’s action was due to risks
associated with the Euro Zone. He confirmed France 2012 GDP growth forecast of
0.5%

–
Poland Fin Min Rostowski Greece’s Euro exit would be less damaging at this time
compared to 2011 but would pose legal
obstacles. Greek default would have less impact with new EU policies because of
the European Central Bank’s liquidity measures. He noted that it was not clear
how it would be possible for Greece to leave the euro zone under its legal
system

–
China State Administration of Foreign Exchange (SAFE) reiterated it stance to
enhance monitoring of two-way cross-border capital flows and improve policy
response to impact of capital flows.

–
Turkey Econ Min Babacan commented that the country’s 2011 imports came in at $240.8B and added
that he was not comfortable with the level of imports

Currencies:

–
The session shrugged off the initial effects of the multi-country European
sovereign downgrade and revisions to AAA outlooks. The EUR/USD clawed its way
from late Asian session lows of 1.3128 and moved above 1.32 handle by the NY
morning following better German ZEW data and commentary of out China’s Premier
Wen.

–
The USD/JPY was probing the upper end of its three-month range with 78.30 being
the key resistance following the BOJ policy decision to set a inflation target.
Some dealers noting that the continued threat of BOJ FX intervention would be
more successful if enacted above the pivotal 78.30 level

Political/ In the
Papers:

–
Portugal is to hold a fresh round of discussions with its international
creditors this week before the next tranche of funds are set. Troika officials
and the IMF will arrive Wednesday for a two-week review of the country. If
approved, then it will be given the next tranche of €14.9B.

–
The Independent looked at who could replace the current Bank of England
Governor King next year when his term expires.
The decision on the succession will be made by the Prime Minister, and
advised by the Chancellor and the Cabinet Secretary. Note that the last two
Governors were chosen from within the Bank, which places the leading internal
candidate, the present deputy governor, Paul Tucker, in a strong position.
Other candidates include Andy Haldane, external candidate Lord Turner, Sir John
Vickers, John Varley, and former HSBC chairman Lord Green.

–
The UK federation of trade unions, Trades Union Congress (TUC), released a
report that finds true unemployment in the country may be as high as 6.3M, over
twice the official figure of 2.68M released last month. The higher figure was
found by using an American measure, which includes part-time employment due to
the lack of full-time jobs, recent redundancies. TUC found that
under-employment (those taking on temporary or part-time work because they
cannot find permanent, full-time work) increased to 1.3M (record).

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Today’s Economic News:

Our
day trading
strategies today will depend on the news, and this morning we
begin right away with 830am EST news regarding retail sales and import/export
prices here in the US. First, core
retail sales are the change in total sales at the retail, excluding autos for
each month, and we can see the end of 2011 was very low, and we look forward to
seeing if these can rebound in early 2012 along with most other news we saw end
of last year. Remember, this does not
include autos, so this number will be used across the board by many different
traders today.

Core Retail Sales 2 Years

We
also have the overall retail sales, and this will INCLUDE the autos, and you
can see these numbers look much different.
Retail spending is the BIGGEST indicator of our economic recovery and
growth. If consumers are confident (we
had mixed reading for confidence last week) they will spend more, and when they
spend new businesses can open and grow our economy more every day. See below for the TOTAL retail sales expected
at 830am EST.

Total Retail Sales 2 Years

After
we go through the 930am EST US market open we then move into the 1000am EST
hour block where we have Business Inventories this morning, which is the total
value of goods held in inventory by manufacturers, wholesalers, and retailers.
This is considered a leading indicator for business spending because businesses
will spend when their inventories get lower.
Traders will be watching this news to see if the reports we saw earlier
this month will hold up with their inventories.

Business Inventories 5 Years

We
also will have our US Treasury Secretary Tim Geithner testifying about the
Budget here in the US at 1000am EST this morning, a follow up to Ben Bernanke
who testified last week this time. Its
‘Tiny’ Tim’s job to report the economic policies that our President Obama puts
in place, and his speeches are ALWAYS watched closely for clues towards the
future of monetary policy at the Fed and the US White House.

It’s
going to be interesting this morning to see what happens AFTER 1030am EST. Will things be slow after people listening to
Geithner? Will the testimony take all
day? We don’t know exactly what will
happen after 1030am EST this morning but we will be watching and looking for
clues for market personality.