Fed Pledges to keep rates low, Crude bounces and Gold flattens

—————————————————————————————

The James’ Report: Professional Resources for Professional Traders

—————————————————————————————

– FOMC: Fed said it would hold rates LOW until mid-2013, gave no indication of QE3. All markets opened in positive territory

– Crude Oil comes off the lows on Fed Statements

– Gold stable after Fed Statement, shows signs of failure at the highs

– Germany has called on Italy and Spain to sell some of their gold reserves in order to reduce debt levels.

– Key piece of economic data was China July Trade balance. The surplus of $31.5V was the highest level since Jan 2009 and beat expectations.

– BOE cautious on growth but optimistic on inflation outlook

– The Financial Times reported that the cost of gold storage is rising, as demand for gold increases. Since March most top gold dealing banks have raised fees by as much as 100%.

—————————————————————————————

Today’s Economic News:

Looking at the news this morning, today is Wednesday so all eyes on crude oil. We need to remember the 3 phases of crude oil inventories today, which we will discuss in our live trade room in more detail.

We begin our day with the US Markets opening at 930am, followed by 10:00 Wholesale Trade (a minor news event) and then at 10:30 we have Crude Oil Inventories. Today is a summer trading day, so we do not expect to see a late morning move, and traders will be leaving the market early in the afternoon because we have important news at 2:00 regarding the Treasury Budget.

Look for the volume to taper off quickly after 1030am news, so keep an eye on the 11:00am hour this morning to wrap up our trading day going into the afternoon news and summertime slow-down after the morning session.

News for Day Traders

—————————————————————————————

Looking at the Charts:

—————————————————————————————

Crude Oil Futures have bounces off their 75-area lows from Tuesday after the Fed pledged to keep rates low in the US through 2013. We can see some easy price structure this morning to give us trading clues today. First we see the bear price channel has been broken, and we get a sideways range and a new short term bull channel after the break.

The key today will be using these levels marked on the 89range chart posted below. The bull channel tells me to buy pullback with new highs above 83.05, looking for a target at the BMT 84.83. If we see strong bullish moves this morning we will be entering pullbacks above these resistance levels overhead (83.05, 84.56, 85.04, 87.26, 87.95, and 88.32) and taking profit at the next level of resistance. If price is to fall to the lows of this range we want to buy the lows as support (consider the bullish channel) and then if price breaks through the support we can look at selling retracements. The key level will be getting below 77.64 then the sellers will be back in charge and we will try and sell the highs of the bear channel. SO if prices keep rising today we’re buying pullbacks with new higher highs, and if price drops im looking to buy at support first, then keep an eye on entering back into the bear channel below 77.64