Good Evening,

Fundamentals stink. The economic calendar has shown deterioration again, this time in the form of ISM Manufacturing and Construction Spending. ISM Manufacturing sub-components such as employment and new orders were dismal as well. When I say dismal, I am talking about early 2009 levels. Keep an eye on the calendar to see if economic data continues to slip and more importantly, for the data not to impact the markets.

What do I mean by that? Well, all you have to do is look to the charts. Check out the SPX and the hard line stance that support is taking in the form of the 1400 level:

Past performance is not indicative of future results

I can't stress how important the charts are. Check out the red bars and the closing prices. How often do we close on our lows? How often do we close off our lows? Who seems to be in charge, the buyers or sellers? Even though it looks like congestion, think about the myriad of events that the markets are dealing with. Are they all positive? Absolutely not! You can refer to today's economic data as case in point. And technically, are the equity markets hanging near the highs or the lows.

Additionally, there are lots of quality companies that are hanging right on there highs. Will they eventually break out to the upside, taking the index with them? Check out Whole Foods:

Past performance is not indicative of future results

You can search for companies within a few percentage points of their highs and find a whole bunch of companies that are household names. Sticking with the green theme, here is First Solar. You know I love those Fibonacci Retracements and those DOUBLE FALL LINE trades:

Past performance is not indicative of future results

Moving to forex, the AUD/USD really held the trendline I have been talking about over the past few weeks. Remember in early summer when the equity markets fell off and commodity prices plummeted? What about now? Commodity prices are rising and the AUD/USD is dropping. Is the trendline stronger than the "inter-market relationship"?

Past performance is not indicative of future results

Overall, forex is still in tight ranges as the VIX stays low. You can tell that day trading opportunities are down as I have been forced to post longer term charts of the forex pairs that are on my watchlist. Even with more data coming out, I am expecting to see day trading opportunities 2 to 3 days out of 5 on a weekly basis. So far the "fall session" is off to an interesting start, but remember, lots and lots of data to come out, so again, keep your eyes on that economic calendar and on the international monetary policy scene.

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.