Tuesday, January 25, 2005

Daily Update for Tuesday January 25th 2005

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ERICH'S UPDATE for Tuesday, January 25, 2005
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Subscribers get theirs the night before, Test Drive version is sent
the next day.

-Erich
"To think too long about doing a thing often becomes its undoing."
- Eva Young

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1: MARCH CORN CH5
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Corn rallied slightly today but we're not close enough to the 201
resistance yet to see a reaction...at least I don't think so.
The market is trying to get bullish; however with all the
resistance above the market a reaction will get me sticking with
the short side, but we'll see what happens.

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2: MARCH COTTON CTH5
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Cotton continued to test support today, but didn't manage to make
any gains to the downside. The RSI indicator has broken the
trendline, but just barely. Think I'll stick with the buy scenario
from the weekend for tomorrow and get serious about selling if we
see a breakout lower.

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3: MARCH BEAN OIL BOH5

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Small day for Bean Oil as well as prices tried to test resistance.
This is another market that is trying to get bullish; however I've
got to stick with the trend for the time being. If we see a lower
session tomorrow it will confirm our short position; however we've
still got the whack of weekly support to overcome.

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4: ARPIL LIVE CATTLE LCJ5
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If you're not short cattle from last week you had another chance to
sell this market as prices fell off right from the open. Bring your
exit stops at least to breakeven for tomorrow. There is also some
intraday resistance at 8710 which you can use to cover your
position if you wanted to "lock in" some profits. Just don't bring
your stop in too tight.

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5: MARCH COCOA CCH5
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Strong day in the cocoa market. If you were short from last week
then you would have gotten stopped out with a small loss as the
market rallied right from the open. If you were trying to sell
cocoa today the market never got close to our entry.
Thinking we'll see higher prices tomorrow; however the 1550
resistance is making me a little reluctant to buy right now. Think
I'll just wait and see what happens.

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6: MARCH WHEAT
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A near identical range to what we saw last week as wheat continues
to battle with support below the market. We're in a better position
to sell now and I think I'll run with the weekend trade. If we see
another reaction to the contract lows I might get more serious
about a bullish position, but right now I'm a cautious bear.

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7: MARCH CANADIAN DOLLAR CDH5
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Wow, serious reaction today to the 8200 resistance line. I still
like the CD long however, at least for the short term and will run
with the weekend buy for one more day before reassessing the
position.

To the downside we'd have to see a good breach of the 8100 support
to make me comfortable about selling.

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8: MARCH SILVER SIH5
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A moderately higher day today as silver "felt" the resistance on
the highs. I'm not saying that prices can't go higher just that I'm
not comfortable trying to take a trade at these levels, there's
just too much resistance to screw up the trade.
Standing aside for tomorrow.

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9: DECEMBER EURODOLLAR EDZ5
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I'm a little surprised that the ED stalled out today...a little,
but not a lot. I thought the market would attempt more of a rally
before finding resistance; however we could see a reaction as early
as tomorrow, which will get me short the next day.

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10: WILD CARD
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No wild card market tomorrow.

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"TOM'S TRADES" for Tuesday, January 25, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O 4-14 HI 4-25 LO 4-10 CL 4-23

I did 3 sells at 114-14 and was stopped out at B/E on all of them.
We spent the majority of the day chopping around -16 to -11. The
message was pretty clear after about 3 hours. the message was
assuming any risk in the Bonds today was not a good proposition
from a RRR perspective. That being the case, I moved on to other
markets.

We settled at 114-23 bringing tomorrow's focus to 115-00 and
114-16. I'll do nothing at 115-00 and will only sell a break below
114-16. I will do no buys regardless of price level this week.

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2: MARCH EURODOLLAR
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EDH5 O--.045 HI--.045 LO--.037 CL--.040

I sold 1 at 97.040 with a 97.055 stop. We'll see what unfolds in
the coming days.

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3: MARCH CANADIAN DOLLAR
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CDH5 O 93 HI 93 LO 50 CL 67

CD just missed rising enough to engage the sell by opening at 8193
and never getting any higher. I was tempted to call it close
enough, but didn't. Never gave us a shot at any reasonable play.
I'll play all the TT numbers again tomorrow.

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4: FEBRUARY GOLD
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GCG5 OB6.90 HIB8.20 LOB6.70 CLB7.10

Nothing for us today as Gold stayed in a very narrow range all day.
Same play for tomorrow ... 424 and the $10 channel.

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5: MARCH COTTON
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CTH5 OF.70 HIF.85 LOF.05 CLF.44

I sold 1 at 46.40. As we broke 46.20 I brought my stop to 46.19.
There's a pretty strong range at 46.20-25. Once we'd broken it, I
had no interest in staying short if it came bach there. I was
stopped out at 46.20 picking up lunch money for the week, $100.
Back on the TT numbers for tomorrow.

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6: MARCH COCOA
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COH5 O 88 HI 30 LO 86 CL 26

I bought 1 at 1488. I rolled to B/E as we approached 1500. We went
on a pretty good run from 1500 to 1518 and the stuttered. I bailed
at 1515 picking up $270. I judged the 18 point run to be sizable
enough to qualify under my numerous cautions about runs over the
past week. Yes, I left a little on the table. It was worth all that
for the peace of mind I gained.
I'll play the same TT numbers tomorrow.

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7: MARCH CORN
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CH5 O=1.99 HI=1.99 3/4 LO=1.97 1/4 CL=1.97 3/4

The gap up open took our planned trade off the table PDQ. We set
the low and started back up but I passed as we were too close to
the close. I had no interest in having anything on the books as EOD
approached in light of the weakness after the opening gap.
All the same plays for tomorrow, Wednesday.

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8: MARCH WHEAT
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WH5 O=2.96 1/2 HI=2.99 LO=2.93 3/4 CL=2.95 1/4

I bought 1 at 2.97 3/4. At 2.99 I brought it to 2.98 1/2 and got
stopped right there. Made $25. Oh well, took a shot and paid for
it. Could be worse.
I'm going to take 1 more hack at 2.97 1/2 break tomorrow.

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