Day Trading Strategies for Dollar Index , Euro, Crude, Russell and Gold futures

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– European equities opened the session broadly lower led by declines in the DAX and CAC-40 indices. Most of the European banks opened the session lower, following comments  by officials related to the EU summit, cautious comments by Moody’s on French banks, and some disappointment with comments from ECB President Draghi, which were made at the central bank’s press conference. In other news related to banks, on yesterday’s session the European Banking Authority (EBA) raised its estimate for the total shortfall of EU banks to €114.7B versus the Oct estimate of €106B. Within the banking sector, Italian financials have outperformed on the session, while Spanish and French banks have underperformed.

– EU released an Official Statement of the Summit agreement which noted that all major economic plans of Euro nations would be discussed in advanced as it must move towards a genuine fiscal stability union. The Rules would be implemented into national laws.Annual structural deficit must not exceed 0.5% of GDP and automatic sanctions to take effect at above 3% of GDP deficit. Measures put in place are for ex-ante debt issuance plans. – Leveraged EFSF would be rapidly deployed and targeted ESM entry by July 2012. The EU would reassess EFSF and ESM cap of €500B in March 2012. Lastly EU President Van Rompuy to present report on further integration in March 2012.

– German Chancellor Merkel commented that important decisions were taken for the Euro and she was satisfied with Summit decisions and stressed that no lousy compromise was made

– UK PM Cameron confirmed UK would not take part in treaty  and would never join the euro. The PM would not present treaty to parliament.

– China Foreign Ministry stated that Beijing has noted that important steps had been decided at the EU Leader Summit and hoped that measures can help to stabilize markets and increase confidence. China reiterated its support for EU efforts to overcome the sovereign debt crisis

– Following the monthly CPI and industrial production data out of China, mining shares in London are trading mixed. As of the time of writing, equity markets are off of the session’s worst levels, following speculation that the ECB is buying Italian sovereign debt.

– EU Leader Summit: come up with agreement to prevent future debt buildups, a plan to accelerate the rescue fund and an agreement to meet again in March. No euro bonds nor a bank license for the ESM

– EBA’s warns that euro zone banks needed to raise more capital than envisaged at the October summit

– China economic data paints possible picture of interest rate cut with Industrial production at lowest level in two years while CPI comes in less than expected

– China CNY currency declined by 0.5% daily limit against USD for 8th straight session

– The FT reported that Hedge funds are set for the worst year since 2008, and the second worst in 20 years. According to Hedge Fund Research data, the average hedge fund managers lost 4.37% in the year to the end of November, and overall were at a loss in the six of the last seven months. Only in the aftermath of the Lehman collapse in 2008 did the industry fare as worse. Managers including Paulson & Co, Highbridge, Lansdowne and Odey failed to recover double-digit percentage losses for their performance in August and September.

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Our day trading strategies today will depend on the news, and this morning is a Friday with consumer sentiment news so this will certainly be something to pay close attention to.  We begin our day knowing that Friday’s are always about looking for the windows of opportunity.  There will be periods of great volume this morning, but we need to be patient to wait for them.  We begin the day with 830am EST International trade news, which is nothing major, but will be on the radar of traders today.  We then go through the 930am EST US Open, we will grab the Mini-Russell Futures and then head into the major news of the morning, Consumer Sentiment at 955am EST this morning.  Consumer Sentiment will certainly get all the markets moving up or down, and we will be looking for the best price action of the morning session to be around 1000am through 1045am EST.  Be looking for market personality clues after 1045am EST this morning as we expect to see the volume slow down going into the weekend.  Remember that we have the ECB Leadership Summit today, and the same reasons you and I want to finish our week’s early is the same reason the markets slow down early on Friday’s so be careful after 1100am EST today.

As always, we will wrap up the week with your questions in our live webinar.

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