Wednesday, January 26, 2005

Tom's Trades for Wednesday , January 26th 2005

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Subscribers received these last night, Test Drive Edition is
posted after the market closes. Enjoy!

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1: MARCH 30 YEAR T BOND
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USDH5 O=114-25 HI=114-28 LO=113-21 CL=113-30

To paraphrase W.C ... All things considered I'd rather trade today
than yesterday:)

I sold 114-14 and was stopped out at -05 for plus 11 ticks, 343. I
sold again at 113-30 and was stopped at B/E, sold a third time at
113-29 and stopped out at 26 for plus 3 giving me 14 on the day,
$437.

The 113-30 close puts us on 114-00 and 113-16 for tomorrow. NO
BUYS.

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2: MARCH EURODOLLAR
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EDH5 O=97.035 HI=97.040 LO=97.025 CL=97.035

We continue short from 97.040. The trade can still be entered on
a retest and susequent failure at .040.

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3: MARCH CANADIAN DOLLAR
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CDH5 O=8145 HI=8145 LO=8057 CL=8085

A gap down took us thru 8150. I sold 8140 with a stop at 8154. I
rolled to B/E at 8125. As we broke 8100 I brought the stop to 8107
and as we touched 8057 I brought it to 8061 and was stopped out
at 8065. We picked up a nice one here, $750.

We're back testing the bottom edge support of the recent trading
range at 8090-80. The U.S Dollar is banging it's head on some
significant recent resistance. I'd judge this a very important point
for the CD. Tomorrow I will buy a break above 8100 with an 8193
stop. Roll to B/E at 8109 and use the numbers above there from
TT for management guidance. I will also sell a break below 8979
with a stop at 8087 and a B/E roll at 8069. 7970 is the first logical
target. Trail a stop back $125-150 until we break 8000. From there
down, no more than $100 at risk.

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4: FEBRUARY GOLD
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GCG5 O=425.50 HI=425.70 LO=421.00 CL=422.10

The big gapower never gave us a shot at the 80 percentile sell.
The confirmation of the lower edge of the channel didn't surface
until too late in the day. Big range from yesterday and nothing to
show for it. Oh well.

Same numbers tomorrow ... 424 and $10 channel.

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5: MARCH COTTON
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CTH5 O=46.40 HI=46.80 LO=45.75 CL=46.78

We sold 46.40, stopped out at 46.05 for 35 ticks, $175. We made
it down to 45.75 which wasn't close enought to play the 45.50/60
focus. It launched from there but we couldn't do anything about it.
Too late in the day it broke above 46.60. I had to let it go.

I'll use the TT numbers again tomorrow. I will also sell a retest in
the 46.80-47.00 area that fails.

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6: MARCH COCOA
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COH5 O=1520 HI=1536 LO=1518 CL=1527

Nothing for us today. I'll play the same TT numbers tomorrow.

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

I bought 1.98 1/2. The stop is 1.97 1/4. We'll go as long as we can.
See TT for management guidance. Remember, we are scalping here.

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8: MARCH WHEAT
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WH5 O=2.95 HI=2.98 3/4 LO=2.95 CL=2.97

I bought 2.97 3/4 and was stopped out at 2.96 3/4 losing $50. I'm
going to go at 2.97 1/2 break again tomorrow. Same 2.96 3/4 stop.

Erich's Trades for Wednesday, January 26th 2005

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Erich's Update for Wednesday's Trades, January 26, 2005
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Subscribers received these last night for today's market
action, Test Drivers get theirs after the close. This is
the fairest way we can figure to give the whole issue to
the Test Drivers.

Erich
http://www.supportandresistance.com

"Perseverance is the hard work you do after you get
tired of doing the hard work you already did."
- Newt Gingrich

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1: MARCH CORN
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CH5 O=197 1/4 HI=199 3/4 LO=197 CL=199

Corn is still in limbo mode as prices struggle with both
support and resistance. While we could treat the current
formation like a channel the problem is that there's not
much potential profit either long or short - only about
$300 either way - so it's really tough to get a decent
risk/reward trade.

Think I'll keep watching for now.

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2: MARCH COTTON
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CTH5 O=4640 HI=4680 LO=4575 CL=4678

Cotton did break lower today; however the breakout was
temporary as prices rallied back to near the high. Cotton
is showing some serious reluctance about heading lower
and as such I'll stick with the long side of this market
for now.

I'll run with the weekend trade again tomorrow; however
I have to admit that cotton is making me a little nervous.
I would consider this a HIGH risk trade of working out.

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3: MARCH BEAN OIL
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BOH5 O=1970 HI=1985 LO=1961 CL=1971

Same ole song and dance for Bean Oil. Like many of the
other grain markets, bean oil is looking for an excuse
to rally, but can't find one. The monster support below
the market is making it tough to sell from here, but we'll
see what tomorrow gives us.

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4: ARPIL LIVE CATTLE
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LCJ5 O=8720 HI=8770 LO=8700 CL=8752

Regardless of whether you shorted Cattle from last week's
trade or this week, today's rally would have stopped you
out of the market. The only difference is that if you sold
the market from last week you would have picked up about
$600 per contract whereas yesterday's trade would have got
you out at breakeven.

I'll let this one pass tomorrow. Watching the RSI trendline
for a "test point".

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5: MARCH COCOA
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CCH5 O=1520 HI=1536 LO=1518 CL=1527

...and this is why we don't chase markets. Notice how
cocoa stalled out after yesterday's big rally? This is
a constant danger when trying to enter the trade after
a big move. Sure everyone's excited and wants to get on
board; however the move might be over...especially with
the 1550 resistance hovering.

Looking for a reaction here tomorrow so we can get
serious about selling again.

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6: MARCH WHEAT
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WH5 O=295 HI=298 3/4 LO=295 CL=297

A respectfully strong day for wheat today; however while
wheat suffers from the same long term support problems as
the other grain markets, there is a little more room to
the downside here, but not until we get below the contract
lows.

Looking for a reaction to come tomorrow. If we get it
we might try to sell early. If wheat breaks higher then
we might have to get more serious about a buy - maybe.

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7: MARCH CANADIAN DOLLAR
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CDH5 O=8145 HI=8145 LO=8057 CL=8085

The bottom fell out of the Canadian Dollar today as the
market gave us the breach of 8100 we were looking for.
I would look to sell the CD again tomorrow if we get a
break below today's low and cover the trade above the
resistance on the close.

While this is a fairly tight trade for a currency market
it still has a lot of money at risk, so judge for yourself
whether you can afford the risk. Watch your opening price
as well - we don't want the market to gap our entry.

*SELL March Canadian Dollar at 8053
*Stop 8086
*Approximate Risk Exposure: $330 per contract
*Profit Target: 7925 (first target)
*Approximate Profit Potential: $1280 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH

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8: MARCH SILVER
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SIH5 O=685.5 HI=687 LO=668 CL=668.5

Silver gave us an early reaction to resistance just above
the market. Today's very bearish day also brought us to
an RSI test point, which is our cue that this might be
a good time to enter the trade.

I'll be looking to sell tomorrow on a break of today's
low, but bear in mind that we could see a bounce off the
support as well. To be on the safer side you could consider
selling below 662 and covering above the 668 resistance for
the same approximate risk.

As with the Canadian Dollar trade, watch your opening price
if you can.

*SELL March Silver at 667
*Stop 673.5
*Approximate Risk Exposure: $325 per contract
*Profit Target: 641.5
*Approximate Profit Potential: $1275 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH

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9: DECEMBER EURODOLLAR
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EDZ5 O=96.35 HI=96.355 LO=96.305 CL=96.34

Strange day in the Eurodollar today as rates tried to
head lower by recovered slightly before the end of the
session. Still expecting rates to come down, but I'm
not convinced that this is the time to sell. Besides
the support at 9617 is making it tough to put together
a good looking trade.

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10: WILD CARD
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No wild card market tomorrow.
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RECOMMENDED BROKER
==================================================

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[email protected]

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CFTC Rule 4.41
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RISK DISCLOSURE!

Trading commodity Futures and options on futures
involves significant risk. You must consult licensed
professionals or your own advisors before trading to
determine if it is suitable for you.

Nothing contained herein is a solicitation to trade or
a recommendation of a specific trade. You must consult
your broker or advisor before making any trade to
ensure current prices, margin requirements and other
factors determinant to suitability.

By reading this publication you agree to make no trade
relying in whole or in part on the comments of the
writers. You agree before doing any trade contained
herein to consult your charts and advisors to verify
all information and make your own decision.

Hypothetical performance results have many inherent
limitations, some of which are described below. No
representation is being made that any account will or
is likely to achieve profits or losses similar to
those shown.

In fact, there are frequently sharp differences
between hypothetical performance results and actual
results subsequently achieved by any particular trading
program.

One of the limitations of hypothetical performance
results is that they are generally prepared with the
benefit of hindsight. In addition, hypothetical trading
does not involve financial risk and no hypothetical
trading record can completely account for the impact
of financial risk in actual trading.

For example, the ability to withstand losses or to
adhere to particular trading program in spite of
trading losses are material points which can also
adversely affect actual trading results.

There are numerous other factors related to the
markets in general or to the implementation of any
specific trading program which cannot be fully
accounted for in the preparation of hypothetical
performance results and all of which can adversely
affect actual trading results.

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