Day Traders Prepare for Debt Ceiling Vote, Crude, Gold, Russell, Euro tumble to lows

—————————————————————————————

The James’ Report: Professional Resources for Professional Traders

—————————————————————————————

· Debt Ceiling Vote Delayed in the US until today, something today?

· Spain receives another possible downgrade by Moody’s

· Euro Zone sees lower CPI reading, Inflation concerns decrease

· Crude Oil trading at Weekly Lows, at the 89Range BMT

· Gold continues to play with new highs, traders take profit at highs

· Euro continues to trade in transition, lows of bull price channel

· Russell heads back to new lows, breaking major channel support

More from the news this morning…

– In US politics, the delay in the debt deal continues as initial reports state that the House of Representatives would not vote on Thursday. House Republicans are expected to meet on Friday at 10:00 EST to determine how to proceed on the debt ceiling talks. The US House Rules Committee will allow changes to debt bill to proceed. The panel will permit changes to the debt bill on Friday.

– According to the London Telegraph, based on yields, British gilts are seen as being safer than US debt. The yield on the 10-year gilt has recently moved below the 10-year US Treasury yield. Monument Securities analyst said that Gilts are being treated as a safe haven amid the EU and US debt issues.

—————————————————————————————

Today’s Economic News:

Day traders have a very busy Friday morning with economic news. We begin the day with some items that will be on everyone’s minds this morning; The Fed Economic Summit starts today in Wyoming, and they will be voting (again) on the debt ceiling here in the US.

The day begins with the assumption there will be lower volume because of a summer Friday, so expect less volume early, and volume slowing down around 1030am this morning.

We begin with 830am GDP and Employment Cost Index news, then followed by 930am US Markets Open, 945 we have Chicago PMI, 955am Consumer Sentiment, and at 1000am they are meeting again on the Debt Ceiling. We will have the transition into lunch after 1030am today because it’s a summer Friday (earlier than normal) and then 215pm this afternoon we have a press conference with our Fed Chairman Ben Bernanke which will assumedly have traders sitting on hands waiting to hear what he has to say about the whole debt situation in the US.

Overall, the key trading today will be get in early, be selective with our trades, and then look for volume to slow down after they begin speaking at 10am about the debt ceiling. We hope to have volume into 11am today but it is unlikely, so we will keep that in mind.

News for Day Traders

—————————————————————————————

Looking at the Charts:

—————————————————————————————

The US Dollar Index is trading in a transitional area this morning at the highs of the short term bear channel, and the lows of the long term bull channel. You can tell by looking at the bullish candlestick we see most recently that today the US Dollar may try to pop back up into the lower end of the bull channel, which will then push back up into the 76.000 area next week.

Looking at the faster 13range chart on the dollar we see a strong up trend with higher highs and higher lows, giving us clues that rising dollar prices will result in selling opportunities on the markets we trade.

US dollar Index 89r

US Dollar Index 13r

Crude Oil Futures are trading sloppy around the BMT this morning on the 89Range chart. We can see a sideways range from 98.00 down to 96.50 which will be our main focus until we breakout of that range. If we make new lows we look great to be selling retracements on the way down, and then look to take profit, as well as look for buying opportunities at the major support levels of 96.50, 95.70, 95.00, 93.86. We will also be able to find minor levels of support and resistance as we get into our faster timeframes, but these levels will be the highest percentage today, and with the dollar making new highs we know that selling opportunities on crude oil will be high percentage today.

Crude Oil Futures

Gold Futures are trading just off their all time highs again today, pushing new highs on Thursday and then pulling back off those highs as traders take their profit wisely. The big issue with Gold is that the highs like this make for very sloppy price action, so we need to be careful where and when we trade gold today. The best trades will be to buy support as price falls off these highs. The bullish price channel tells us to buy pullbacks and buy at support, however, buying pullbacks at new all-time highs will be very high risk, so keep that in mind. Im looking to buy Gold today at support levels of 05.5, 93.0, 86.0, 83.5, 78.7, 67.5. If price breaks through these support levels I will then consider selling retracements with new lower lows, keeping an eye on these support levels as profit targets for short trades.

Gold Futures

The Euro is trading at the lows of its bullish price channel, looking for support here, and possibly tumbling to new lows and testing major support levels we see on our 89Range chart. We can see the bullish price channel tells us to buy at support levels if price drops out of this channel, and if we see new highs we then buy pullbacks, being aware that the BMT area of 4300 will NOT be a good place to get into a trade. As price rises im selling at 4346, 4381, 4515, 4547, however, this bull channel tells me to look more to buying a pullback above those levels of resistance when they are broken. If price falls im buying support levels of 4220 channel lows, 4115, 4085, 3990, 3920, 3815. The Euro will be watching the US Debt Ceiling Vote today, so volume will be a concern, watch your speed.

Euro Futures

The Russell Futures are trading at the lows of the major bearish price channel (a very bearish sign) and we see that Thursday’s attempt to come off these lows was a failure, and we make new lows again today. This bearish channel tells me to sell at resistance if price rises, and sell retracements with new lower lows. We can see easy profit targets for our short trades at 779.0 and 770.3, however, remember we will be looking to buy at support 790.0 first, which is the low of the channel. if we make new lows, then we look to sell retracements.