US SESSION
A) CALENDAR
-GMT 12:30 USA Employment Cost (q/q), (Q3) EST 0.9% PREVIOUS 0.9%
Definition
The Employment Cost Index measures wages and inflation and provides the most comprehensive analysis of worker compensation,including wages, salaries and fringe benefits. The ECI is one of the Fed�s favorite quarterly economic statistics
-GMT 12:30 USA GDP Annualized (q/q), (3Q) EST 3.1% PREVIOUS 3.8%
-GMT 12:30 USA GDP Price Index (y/y), (3Q) EST 2.2% PREVIOUS 2.6%
Definition
Gross Domestic Product (GDP) is the total value of final goods and services produced within a country’s borders in a year. It is one of the measures of national income and output. It may be used as one indicator of the standard of living in a country, but there may be limitations with this view.
-GMT 13:45 USA Chicago PMI (Oct) EST 53.5 PREVIOUS 54.2
Definition
The Chicago PMI (officially known as the Business Barometer) is a monthly composite index based on opinion surveys of more than 200 Chicago purchasing managers regarding the manufacturing industry. The survey responses are limited to three options: slower, faster and same. As such, the index will not capture if a component is growing but at a much slower rate or vice versa. The index is a composite of seven similarly constructed indexes including: new orders, production, supplier delivery times, backlogs, inventories, prices paid, and employment. New orders and orders backlog indices indicate future production activity. It signals factory-sector expansion when it is above 50 and contraction when below it. The index is seasonally adjusted for the effects of variations within the year, differences due to holidays and institutional changes. Because it is an opinion survey, it is often influenced by respondents� perception of current events, as opposed to actual hard data. Also, it does not capture technological and production changes, which make it possible for production to expand, while employment contracts. Because the Chicago PMI is released the day before the ISM, it is watched in order to predict the more important ISM report, which is in itself a good leading indicator of overall economic activity. It frequently moves markets
-GMT 15:00 USA Construction Sp (m/m), (Sep) EST -0.3% PREVIOUS 0.2%
Definition
Measures the total amount of spending in the U.S. on all types of construction. The residential construction component is useful for predicting future national new homes sales and mortgage origination volume.
-GMT 18:15 USA FOMC Rate Decision EST 4.50% PREVIOUS 4.75%
Definition
The Federal Open Market Committee is a twelve-member committee made up of the seven members of the Board of Governors and five Federal Reserve Bank presidents. It meets eight times per year to determine the near-term direction of monetary policy, such as setting guidelines for the purchase and sale of government securities and setting policy relating to System operations in the foreign exchange markets. These changes in monetary policy are now announced immediately after FOMC meetings. Most importantly, the Fed determines interest rate policy at FOMC meetings. Market participants speculate about the possibility of an interest rate change at these meetings, and if the outcome is different from expectations, the impact on the markets can be dramatic and far-reaching. The interest rate set by the Fed the federal funds rate serves as a benchmark for all other rates. A change in the fed funds rate, the lending rate banks charge each other for the use of overnight funds, translates directly through to all other interest rates from Treasury bonds to mortgage loans. It also changes the dynamics of competition for investor dollars: when bonds yield 10 percent, they will attract more money away from stocks then when they only yield 5 percent. The level of interest rates affects the economy higher rates tend to slow activity; lower rates stimulate activity, a ripple effect that expands into all sectors of the economy.
B) SUPPORT-RESISTANCE
EURO/USD USD/JPY GBP/USD
R3 1.4520 115.85 2.0820
R2 1.4480 115.60 2.0785
R1 1.4465 115.30 2.0740
S1 1.4415 114.65 2.0660
S2 1.4390 114.30 2.0645
S3 1.4370 114.00 2.0595
C) WATCH
-Interest Rates
-GMT 12:30 USA Employment Cost
-GMT 12:30 USA GDP
-GMT 13:45 USA Chicago PMI
-GMT 18:15 USA FOMC Rate Decision
D) TRADING TIPS
THE ELLIOT WAVE
There are times when Elliot pictures are clear and other times when they are not. Trying to force unclear market action into an Elliot format, and ignoring other technical tools in the process, is a misuse of the theory. The key is to view Elliot Wave Theory as a partial answer to the puzzle of market forecasting. Using it in conjuction with all of the other technical theories will increase its value and improve your chances for success.