Day Traders waiting for Big Ben and his Long Term Outlook for our Global Economy

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The James’ Report: Professional Resources for Professional Traders

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– the dollar index is finally breaking the overhead resistance that prevented the move higher on Monday resulting in the potential selloff we were expecting on Crude, Russell, euro currency futures, and gold futures. Now the DOLLAR INDEX is breaking new higher-highs and we can see that we have lots of room to move higher up to 78.240 so expect the dollar index to keep rising, giving us selling opportunities across the board this morning.

We then use the faster 13-range chart of the DX 12-11 to find the SHORT TERM trend, which in this case is rising higher, and with the negative dollar correlation this means we are looking for SHORT trades until this trend changes.

UP-DATE @ 900am EST on the Dollar, now moving sideways, so no directional bias

– gold futures was a waste of time on Monday, but today with the dollar index moving finally we are getting some personality this morning. Dollar index is moving higher, so we know to look for selling opportunities on gold futures this morning until that changes. We found the bull price channel and defined the ABCD locations which define our reversal zone. We are trading right in the reversal zone, so we know that below the ‘zone’ we are selling retracement down to 1627.6 at which point we will then take profit on the short side, and look to buy as support. If price rises up above the reversal ‘zone’ then we will buy pullback up to the BMT and then the PLOD as your magnet as price rises. Then if we make it above the PLOD we then start aggressively buying as we enter into the lows of the bull price channel and we want to buy the lows.

– euro currency futures is finally making this move happen from Monday, it was too sloppy Monday and the dollar index never made new higher-highs, until this morning. We have a bear price channel where we used our ‘price channel-break’ price structure to find the reversal zone, and then we know below the 3676 we want to sell short down to the target around 1.3557 the trend line support. We used the ‘trigger zone’ to find the target using the C @ 3142 up to the reversal zone high @ 1.3905 to find the ‘trigger zone’ and the trend line makes it a perfect target at the major support level in blue @ 1.3557. if price does NOT tumble and it rises back up into the reversal zone we cant really buy until we get above 1.3900. We want to sell the highs overhead with the trend lines, the reversal zone, and the PHOD all as major resistance, so beware if price moves higher, we want to wait for selling opportunities.

– Russell futures are still trading with the same price channel-break price structure from Monday. We took the big trade short below the PLOD on Monday and then it bounces off the ‘reversal zone’ and heads higher. We can see the Dollar index is trying to drop off its new higher-highs which would be a nice easy kick to the Russell to move higher. We know that when a bull price channel breaks we get buying opportunities at the major support below the price channel, and since the support levels held last night, we look to buy the Russell up into the price channel above us. Our target for the long trades will be the 700 area, and then with new higher-highs we can keep buying pullback above 700. I will then sell the PHOD as resistance and take profit from my long trades at the PHOD. If price drops on the Russell we will buy the trend line as support as well as the reversal zone for the price channel break at 677.5. If we break new lower-lows below 673.5 I will then look to sell retracements down to the BMT at 666.6.

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Around the Globe this morning:

– China Q3 GDP YoY at 9.1% vs +9.3e; Slowest pace in 2 years

– Moody’s to review France sovereign outlook within three months

– Germany ZEW survey falls for the eighth consecutive month

– UK inflation breaks 5% but expected to slow significantly in 2012

– European shares fell during today’s session, interrupting the week’s rally. German Finance Minister Schaeuble abruptly announced yesterday that investors should not expect a final solution for the Eurozone crisis during October 23rd summit.

– This healthy dose of reality check coupled with disappointing Chinese GDP dampened the optimism that had prevailed a few days ago after the G20 meeting. Furthermore, a disconcerting report from Moody’s on France cast a cloud on country’s AAA rating due to deterioration in French government debt metrics. French banks sank during the session.

– Analysts at UBS believe that European banks require funding guarantees and not additional capital.

– The financial press reported that the bond markets have started to view Spain as being less risk than Italy. The Italian/Spanish spread is near 60bps, which is the widest level since Dec 2008.

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Today’s Economic News:

Day Traders will be listening to hear what our Fed Chairman, Ben Bernanke, has to say about the lasting effects of the recession along with the long term outlook for the US and Global economy at 12:30pm EST today.

The day begins with early 830am EST news on Producer Price Index (PPI), followed by 900am EST Treasury International Capital (TIC Flows) which will get us started before the US open at 930am EST today. We then move to 1000am EST for the Housing Market Index and then we look for clues after 1030am for the reversal and possible dead zone settling in ahead of the lunch session and Ben Bernanke at 12:30pm EST today.

We will be looking for volume early in the session today, and then with Bernanke on the podium we expect volume to taper off just after 11am EST today so we will be watching the clock and for clues of this slow down.