All eyes on the EU Leaders Summit as markets come off their highs

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The James’ Report: Professional Resources for Professional Traders

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– Dollar index trading at the lows of the price channel, and we have a perfect price channel structure all we need is better price action. We assume this sloppy price action on the dollar index is from the EU Leaders Summit, so this may change very quickly. We know that if price drops to new lower-lows on the dollar index we have concerns trading the lows of the bear price channel. We ideally want the dollar index to rise off these levels so we can sell short on the markets we trade most such as crude, Russell, Euro, gold.

– euro currency futures are trading in a fake-out breakout type of situation as they wait for the EU Leaders Summit. We can see the highs of the price channel are right above us so beware buying into the highs, I will sell the highs at resistance if price rises and buy the support as price falls. We expect the price action to be sloppy ahead of the EU news later today, so keep an eye on this it can easily change. The key today is to fade those breakouts. Sell as price rises, and buy as price falls.

– crude oil futures trading in sideways range at the highs of the price channel. If price rises I’m selling the highs. If price falls I’m buying the support below it, fading the breakouts until this market personality improves this morning.

– Gold futures trading at the highs this morning. I will buy pullbacks at major support and sell the highs when the dollar index pulls off its lows. Careful trading gold futures today, very emotional at these highs right now which will be sloppy.

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Around the Globe this morning:

– Australia’s Q3 inflation data sparks rate cut hopes

– Pressure rises for Italy PM Berlusconi to deliver credible budget cut plans

– China Premier Wen hints at macroeconomic policy that would be more accommodative to stabilize economic growth

– The FX markets were relatively quiet ahead of the ‘decisive’ EU Leader Summit that will begin after the European markets close today. The EUR/USD maintained a stead, positive tone above the 1.3930 level despite the preparation for disappointment from the results of today’s summit.

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Today’s Economic News:

Traders have a lot going on in the news today. We begin with the EU Leaders Summit which is on everyone’s minds for a solution to this threat of double-dip recession in Europe. We will be looking for clues from the EU all morning so keeping an eye on the tape for the reaction in the market to this news that comes out throughout the day.

We begin our day with 830am Durable Goods Orders, follow by the 930am US Open, 1000am New Home Sales, and then 1030am we have the very important Crude oil Inventories. Remember to set your alarm 15 minutes before the 1030am new as crude will get sloppy ahead of this report.

We will be looking for clues after 11am EST this morning to see where market personality is. We may be slow today due to this EU meeting, or we may be just fine with volume, we will look for those close after the 1030am news.

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