Part Two - Tom's Trades - by Tom Loge' 7-30-06

Notable Trading Tactics for Stocks and Commodities
Inside this Issue:

Opening Comments :: New Trades :: Educational and Q&A
 

After the show we hit the tables for about an hour in an attempt to make it a free night. The Black Jack gods were not kind this trip. I hit an early bad run but managed to battle back to break even and then made a hasty exit. Let's go lay out the plan for the coming week.

Just a reminder … check those FND's and LTD's every Monday … here's a good place to bookmark to do that … http://www.thectr.com/mmvi/visionlp/index.php

SEPTEMBER TBonds

A weaker than expected GDP for the second quarter sent Bonds higher breaking below a 5% yield for the first time since June 13th. The sentiment was this softened the chances for another rate hike for the next FOMC meeting. Monday and Tuesday we'll see reports on manufacturing activity that could lead to yet stronger no hike sentiment and propel Bonds higher still. There are some mid-week reports of note but the remaining biggie will the monthly employment report which we know is very influential. Friday's close at 108-09 will have us staking out 108-00 and 108-16 as focus points for initial trades Monday morning.

DECEMBER Eurodollar

The same factors playing on Bond prices carried over to the ED picture as well propelling the December Contract to … Ok, everyone, all together … 94.550.

We'll buy the break above .550 or sell a failure there. It'll take a real effort to get above it so I suspect a bit of lower action will surface overnight and maybe carryover to the RTH start. I'll get real cautious as the Monday Chicago PMI report hits at 9am CDT and is digested.

The target for the buy is 94.700 with aggressive rolls at .615 and .650. The sell target is .425.

SEPTEMBER Canadian $

A very narrow focus marks my approach to this week just as it did last week. The numbers have changed only slightly.

I'm first most interested in the 8900 level as a focus I'll sell a break lower or buy a failure to push lower as it turns back north. I will also sell a retest of 8880.

I'll also have my eye on 8860 and 8820 as places to buy as it fails and turns higher or a place to sell a break lower.

The stops are somewhat formulized … all the sells get stops at the next XXX3 above the fill price; all the buys get stops at the next lower XXX7 below the fill price. Targets are a bit difficult. I'll go with 8760 on the sells and 9000 on all the buys. All the numbers we've cited can be used as management tools for rolls.

SEPTEMBER Swiss Franc

I still think 8150 holds a lot of power but I'm going to bump my focus up the ladder to 8160 based on recent action. We'll sell a failed retest there or buy a break higher. I play 8150 as well which might be kind of tricky to pull off with 2 targets in such close proximity. Buy the failure to push lower or sell the break out lower.

I'll also sell a break below 8125 but forego the buy there. At 8075 I'll trade either way. I'll sell the break lower or buy the failure to push lower as it turns north. I think the range at 8060/8050 also presents an interesting play. I'll sell the 8050 break lower or buy a retest into that range that turns back north pulling the trigger as it breaks above 8060. I'll also play both ways at 8025 selling the break lower; buying the failure to press lower as it turns back upward.

Any retests of 8200, 8225 or 8250 that surface and fail to march higher are also good sell levels. I don't think we'll have to worry about any of those numbers for a bit … just know they are out there and attractive for future reference.

All the sells have stops at the next highest XXX3 above the fill price and all the buys have stops at the next lowest XXX7 below the fill price. The target on all the sell trades is 8000. All the buy trades are targeted to reach 8250. Use all the mentioned numbers for management guidance for rolls and squeezes.

SEPTEMBER Mini Russell

Last week we were down at the lower end of the ranges we'd discussed at 675. This week we occupy the opposite end of the range at 705. This is a epic level for the Russell and the action here will define what's to come for the rest of the week, I think.

Here are the numbers currently in play for the September contract:

790, 785, 783, 780, 778, 775, 772, 770, 767, 765, 760, 755, 750, 747, 745, 742, 740, 737, 735, 732, 730, 728, 725, 722, 720, 717, 715, 712, 710, 707, 705, 700, 695, 692, 690, 688, 685, 683, 680 and 675.

SEPTEMBER Mini Dow

The DOW put in a very good week ticking higher each day with higher highs and higher lows. We settled Friday at 11254. I'd love to see a test of 11300 and then go from there.

Here are the current numbers in play:

11780, 11750, 11700, 11600, 11580, 11550, 11500, 11450, 11400, 11380, 11350, 11330, 11300, 11265, 11200, 11180, 11150, 11100, 11050, 11000, 10980, 10950, 10900, 10875, 10850, 10780 and 10750.

DECEMBER Gold

We'll roll out to the December Contract as First Notice Day in August contracts for all metals comes up tomorrow. Any trading done tomorrow will be done in the December contract. Double check to be sure you are out of all long positions first thing in the morning if you have any.

The Dec chart looks just like the August but about $13 dollars an ounce higher. The Dec closed Friday at 647.80. With any luck at all we'll test 650, throw off a confirmation Helen Keller could see and zoom to 640.

The $10 Gold Channel is the total focus.

DECEMBER Cotton

I'm only going to trade 2 numbers, 56.00 and 54.75. I'll sell a failed retest of 56.00 and sell a break below 54.75 or buy a failure there to press lower. My stops will be 11 points back of the number; not the fill.

Target on the sells is 54.00 and 56.00 on the buy. We'll require aggressive rolls at 55.00, 55.50 and 54.50. Keep an eye on long runs and periodic RRR.

SEPTEMBER Cocoa

I'll buy a break above 1560 or sell a failure there. I'll also buy any failure that happens below 1530. Use periodic RRR to manage anything entered. Stops will be 1563 on the sell off 1560 and 1517 on any buys at the low number. For a buy on the break above 1560 I'll use 1557.

SEPTEMBER Corn

I'll buy a retest of 2.36 that fails to press much lower as it breaks back above. I'll buy a break above 2.40. I'll sell a failure at 2.44.

These are all scalps so the usual penny and a quarter stops and rolls apply.

I have abandoned any thoughts of doing the call spread.

SEPTEMBER Wheat

I'll buy 3.80 on a failure to move lower as it turns back north. I'll sell a failure to break higher at 3.93 or buy the break higher. All scalps; all penny and a quarter stops and rolls.

That's it for this edition. Keep in touch at the Forum!

Tom
 

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