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

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Let’s review today’s day trading strategies together in the live trade room

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– European shares fell on continuing rising yields, especially in Spain which fueled contagion fears. But equities pared their losses after circulating chatter that ECB was buying Italian and Spanish bonds. Markets also focused on the first speech of ECB’s freshly minted chief Mario Draghi who noted that weakness was likely to persist in the developed economies. He also expressed exasperation at the slow pace politics are moving in Europe, namely the implementation of the EFSF which was launched over a year ago.  French banks were among the most significant decliners.

– ECB Draghi made his first major address as head of the central bank in a speech to the European Banking Congress. Draghi expected economic activity to weaken in most advanced economies and defended the surprise rate cut earlier this month was due to the economic outlook and the downside risks to EMU outlook had increased.. The ECB was aware of current difficulties for banking sector from the current debt crisis as interbank markets remained subdued and the use of ECB deposit facility reflected the tension, He also stressed that anchoring CPI expectations was the ECB’s major contribution.

– ECB Chief Draghi holds standard ECB line in first major speech

– EU/IMF/ECB Troika arrives back in Athens today

– Funding strains have been apparent this week, which exacerbated the run on stocks and spilled into commodities

– EU crisis spreads from banks to corps as higher capital costs force funding problems.

– UK banks cut lending to EU periphery

– Spain to hold national elections Sunday, Nov 20th

– China Central Bank advisor: Trade surplus shrinking. CNY currency  could face depreciation pressure over next 2 years

– Global equity markets s appear to be running scared as year-end approaches

– Gold holding steady after Thursday sell-off sparked by IMF selling gold rumors

– Barclays believed that Britain may not be able to eliminate its structural deficit until 2017 due to high levels of unemployment and weak growth rates. The Office for Budget Responsibility (OBR) expects the Treasury to get rid of the structural deficit by 2015. Barclays had expected that the OBR will cut its growth forecast from 1.7% to 1% for 2011 and from 2.5% to 1.2% for 2012.

– According to the Telegraph, a leaked German government document noted that a European body with the authority to take over struggling states should be established to deal with the current crisis. The document was a six-page memo by the German foreign office. The proposals urge the European Stability Mechanism (ESM) should be changed into an IMF for the EU. The European Monetary Fund (EMF) would be able to take full fiscal control of a failing nations, including taking them into receivership. The UK would be relegated to a new outer group of EU members who are not including in the single currency. Germany also has plans to prevent a UK referendum regarding an EU overhaul.

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Our day trading strategies today will depend on the news, and today is Options Expiration Friday (OPEX) which is the last day of the month before options expire on Saturday.  This means that traders will be getting into the office early this morning to finish up a long week of options re-balancing and the morning will start relatively early and finish relatively early.  Today is a Friday so we need to watch the clock after 1045am EST today, and we will look for early morning volume to pick up ahead of the 930am EST open.

We only have some very minor news at 10am EST today so the most emphasis will be put on the news we hear from Europe and the US today regarding the bailouts in Europe.

And as always, Friday’s mean being patient for the best ‘windows of opportunity’ so be patient and remember that there will be times of great price action, and times when we need to sit on hands today, so be prepared for that mentally.

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