Debt Ceiling Deadline Looms as Day Traders prepare for personal spending news

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The James’ Report: Professional Resources for Professional Traders

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– Today is the deadline for the Debt Ceiling, and the US Senate is expected to Vote today around 2pm EST.

– Consumer Spending numbers due out today at 830am expected to be lower than previous years

– Slowdown in the US Economy affecting Stock Indexes and Gold Futures

Interesting news out of the EU this morning…

High EU youth unemployment rates are expected to worsen. According to Eurostat, the unemployment rates among job seekers between the ages of 15 to 24 are above 20%. The austerity measures are expected to help drive youth unemployment rates even higher. EU countries with the highest youth unemployment rates include Spain (45.7%) and Greece (38.5%). In Germany the youth unemployment rate is 9.1%.

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Today’s Economic News:

All eyes this morning are on the debt ceiling here in the US, and finally we may be able to get this issue behind us and move forward after it seems we’ve spent a year sitting around waiting for both sides of the isle in the US to get this deal done.

We dont know exactly when the vote will be this afternoon, we can assume mid-afternoon EST at the very least and we will listen for updates on that all day today.

We begin our day here in the US with 830am Personal Income news.

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Personal income in May rose 0.3 percent, matching the gain the month before. However, wages & salaries increased a modest 0.2 percent, following a rise of 0.4 percent in April. Personal spending weakened in May, posting at no change, following a 0.3 percent boost the prior month. The slowdown was largely due to a decline in motor vehicle sales as durables dropped 1.5 percent, a drop related to shortages of autos dependent upon Japanese parts.

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After our news at 830am we then wait through the US Market Opening at 930, and begin to look for the price reversal at 1030am and then the European Close at 1130am this morning. We will be watching speed of the tape along with big money in the market looking for the slowdown for lunch, and we assume that lunch will come early today knowing the debt ceiling vote will be happening this afternoon…so no Golden Lunch is expected.

News for Day Traders

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Looking at the Charts:

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The US Dollar Index is trading higher this morning as the US is somewhat agreed on this debt ceiling measure. We use the 89range to see the big picture and we see the price has broken the bear price channel and now in a transitional area at the lows of the bull channel. We use this timeframe to get a better understanding of where we are today. I need to use the 13range chart to see the short term trend, which will help day traders make more accurate decisions when they trade. The 13range shows us a clear bull price channel so prices are rising to new highs and higher lows, and then I added 3 price alert indicators to help me stay aware of when the dollar makes a new high or new low. Using the Dollar Correlation we can use this 13range chart to really help confirm our day trading entries.

Crude Oil Futures have broken the long term bull price channel, trading in a short term bear channel. We can see that on the way down we are creating large swing lows, giving us price wedges temporarily, until the support is broken again when we head back to new lows and looking for targets at the major support levels listed on the 89range chart.

The key today will be using this bear channel as our guide. Selling at resistance if price rises up, and then selling new lower lows with retracements, keeping an eye on the key support levels as price targets and price reversal opportunities.

Gold Futures are flirting with all-time highs again this morning as concerns across the globe lead traders and long term investors to seek shelter from the storm. Gold trading at the highs is a very tough spot to trade, so my plan of attack will be to stay away from the 37.6 all-time highs and focus on buying at support levels as price falls off these highs. Buying Pullbacks will always be the most efficient way to trade rising prices, and on Gold this is very important to keep us away from the emotions involved with trading at the highs.

Look to buy 18.8, 12.1, 08.1, 05.7 and if possible buying 85.9, 83.6, 78.9 on the way down. The bullish trend and the fundamentals make buying pullbacks the higher percentage trades today.

Euro Futures are trading outside of the bull price channel, now moving towards major support inside of a new bear price channel. We’ve seen this price structure many times before and we know that the major bull channel tells us to buy at these major levels of support listed on this 89range chart. You can see we’re at the lows of the short term bear channel, so looking for buying opportunities here at 4115, 4085, 3990, 3920, and 3815. Another high percentage trade will be selling the highs of this new bear channel below the 4300 area. Strategy today will be buying at this major support, but then looking for selling opportunities if the support is broken and we move lower.