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

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The James’ Report: Day Trading Strategies for Professional Traders

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You
have the power to create your own beliefs, rather than using those of
others. Look at the charts today, what
are they trying to tell you? Don’t take
someone else’s word for it, dig into them yourself, and create your own belief
system of why the markets move the way they do and you will instantly create
your own confidence in your trading.

***Notes/Observations from around the
world***

–
European shares traded mixed to negative territory even after positive German
IFO. EU commission cut its forecast for Eurozone FY12 GDP to -0.3% noting that
the Eurozone was seen in a mild recession although signs of stabilization were
seen.

–
Concern that money was leaving China at an alarming rate, China FX regulator
responds

–
German IFO Survey again exceeds expectations

– UK oil imports
exceeded production for first time since 1978

–
EU Commission slashes Euro Zone 2012 growth forecast; sovereign downgrade
rumors result

Speakers:

–
German IFO economist Abberger commented after the better German IFO Survey that
he did not see recession for Germany for now as economy was supported by
domestic factors and exports. He did caution that one could not yet rule out
risks with Euro Zone crisis still a danger and high energy was an additional
risk which could impact both consumption and auto sector. He did add that the
current ECB interest rate level was appropriate

–
EU Commission issued its interim economic forecasts which noted that it saw the
Euro Zone in mild Recession but signs of stabilization were seen. The EU
slashed the Euro Zone 2012 GDP to -0.3% from its November view of +0.5%. The
cuts in GDP views ranged from the core to the peripheral countries.

–
EU’s Commission Rehn in a press conference stated that any decision on Spain’s
deficit target to be taken after all economic data had been released by
Eurostat. He expected Spain to share all information with EU over fiscal
slippages in 2011 and Spain must ensure
sustainability of its public finances. Rehen also noted that the Euro zone had
entered a ‘mild recession and those economic prospects had worsened as risks to
growth remain. He did add that recent forecasts suggested that economic
slowdown to be mild but no strong turnaround was seen just yet

Currencies:

–
The USD was generally softer throughout the early part of the European morning
with various sovereign names cited as buyers of Euros. The better German IFO
survey propelled the Euro to achieve fresh 2012 high of 1.3340. – However, the
European currencies were off their best level following the release of the Euro
Zone interim economic forecasts. The cuts in 2012 GDP views was across the board
from core to peripheral countries. There was renewed chatter that Portugal
could again face a sovereign downgrade after the EU Cut the country’s 2012 GDP
to -3.3% vs. -3.0% prior Nov view. China Commerce Ministry (MOFCOM) comment
that it would link the current EU trade probe on steel tariffs with any
assistance on EU debt help also stymied the Euro momentum.

Political/
In the Papers:

–
The German Finance Ministry released its Monthly Report noting that Germany
should gradually overcome weak economic growth. It sees exports stabilizing,
the job market improving, and total tax revenues for January +3.9% y/y.

–
According to data from Fitch, large US prime money market funds increased their
exposure to the EU in January. The FT reported at the end of January, the
exposure of the largest 10 US prime money funds to EU banks rose to 11% of
total assets under management (AUM) compared to the prior month of less than
10%. US prime money market funds have about $1.44T in assets. Since mid-2011,
large US money market funds have cut their EU exposures from about 30% of total
assets, which suggests that the ECB’s LTRO has eased some of the concerns of
money market funds.

– The Telegraph’s Ambrose Evans-Pritchard
looked at the negative side-effects related to the ECB’s lending measures,
noting that the measures by the ECB could eventually lead to distortions in the
debt markets. RBS’ European credit chief Alberto Gallo said that while the
measures lower default risks, they also lower recovery rates if adverse
scenarios occur. He added that the ECB’s
LTRO has hurt the capital structure of banks, as some Spanish and Italian banks
have used ECB funds to buy more of their own government’s debt than is covered
by equity.

–
The UK and Japan cautioned that the ‘Volcker rule’ may harm the economic
recovery. Per the report in the FT, both the UK and Japan suggested that the US
rewrite the rule, as trading restrictions on US banks could negatively impact
the int’l sovereign debt market.

–
The British housing market may face ‘lost decade’. According to Colin Stewart,
government proposals to increase mortgage lending may result in unintended
consequences placing first-time buyers in negative equity as house prices
declines. He sees at least two or three years of steady house price erosion.
And he added that the notion of a structural shortage of housing in the UK is
based on ‘flimsy evidence’.

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Today’s Economic News:

Our
day trading
strategies today will depend on the news, and finally this
morning we have some important news to get these markets moving! The beginning of the week was plagued by low
volume due from the holiday weekend and the lack of major news, hopefully that
ends today.

We
begin the day at 830am EST with Jobless Claims which are always a vital news
report to watch each week. We have seen
jobless claims tumble for the past 4 weeks in a row, and with claims falling
this will give more confidence to the recovery which will aid crude oil prices
higher along with gold lower. We will be
anxious to see if this bullish trend in jobs continues today at 830am EST.

Jobless Claims News 2 Years

We
have some minor news to consider this morning at 1000am EST with Home Prices
and then at 1030am for Natural Gas but these will be small on our radar so we
wont care too much to worry about them.

Our
biggest news this morning outside of jobless claims will be the crude oil
inventories report at 1100am EST. This
is always an exciting part of our week, and we need to remember that this news
is usually on a Wednesday @ 1030am EST so we MAY see light volume in response
to this news as traders get out of their ‘comfort zone’ to trade this time of
the week. Its hard to tell now, but we
will know more about how the markets look in response to this news after 1100am
EST today but don’t force anything, it may be quiet due to the fact that this
report is not typically in this time slot and on a Thursday. Also remember to sit on hands from 1045am
through 1105am EST making sure not to over-trade too close to 1100am EST when
the news is released and then my biggest mistake has always been trading too
early AFTER the news is released. We
often know what SHOULD happen after the news is released but if that’s all it
took we’d all be rich…I need to wait for the market to REACT to this news and
then I can enter long buying pullbacks or short selling retracements. Again, patience is key to trading this report
at 1100am EST today, and remember we always use the DEMAND report to interpret
what the inventories are trying to tell us.

We’re
excited for another day of profitable trading this morning, let’s stay focused
on locating the highest percentage opportunities and follow that trading plan!