Thursday, February 03, 2005

Erich's Update for Wednesday, February 2, 2005

Erich's Update for Wednesday, February 2, 2005
By Erich Senft, CTA
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Market Update for Wednesday, February 2, 2005
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Hot off the commodity presses to you!
Erich http://www.supportandresistance.com

"Pessimism ought to be considered a sin." - Conrad Hilton
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FYI
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Sorry this got out late tonight...I was stuck away from
home. You'll likely be reading this Wednesday morning,
these are your trades for today.

Erich
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1: MARCH CORN
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CH5 O=197 3/4 HI=198 1/4 LO=197 CL=197

Not too terribly impressed with corn today. The market
gapped our entry (opened right at our entry) and was
still hovering around 197 3/4 after opening range, so
I took the trade. Prices promptly stalled at 198 and
RSI is at a test point, so things don't look too
promising right now.

Keeping my fingers crossed for tomorrow.

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2: MARCH COTTON
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CTH5 O=4420 HI=4435 LO=4341 CL=4388

Another hit on support today as cotton began beefing up
the 4335 - 4340 range. RSI is almost at a test point, and
I might be pushing a little hard, but I'm going to hold
out for one more day.

If you wanted to be more aggressive, consider shorting
below today's low.

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3: MARCH BEAN OIL
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BOH5 O=1940 HI=1943 LO=1902 CL=1904

Go figure that once we give up on the downside and look
for a long trade bean oil decides to break the weekly
low. Isn't that always the way? LOL!

Well that's what I get for breaking one of my own
trading rules as I was looking to do a countertrend
trade in the face of a strong downtrend.

Nothing here for tomorrow. Have to wait for the next
good entry opportunity. Watch 1870 and 1850 for a
possible bounce.

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4: ARPIL LIVE CATTLE
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LCJ5 O=8845 HI=8870 LO=8800 CL=8850

Got long cattle today when prices retreated after the
opening gap. Looking at an intraday chart you can see
that cattle tested support most of the day before finally
committing to the upside - at least a little.

Have to leave exit stops where they are for tomorrow.
Hoping to see another strong session so we can at least
get our stops to breakeven.

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5: MARCH COCOA
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CCH5 O=1532 HI=1567 LO=1530 CL=1561

And there's the bounce! Got stopped out of our short
this morning on the open as cocoa made a perfect bounce
off the RSI trendline and support at 1530. It looks
like cocoa might try and make a run for it tomorrow
so I'll consider buying above the resistance on today's
high.

Exit stops go below the 1555 - 1560 support as that's
the most we can afford and still maintain a decent RRR.
Profit target is resistance at 1630.

*BUY March Cocoa at 1572
*Stop 1554
*Approximate Risk Exposure: $180 per contract
*Profit Target: 1629
*Approximate Profit Potential: $570 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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6: MARCH WHEAT
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WH5 O=291 3/4 HI=294 LO=290 1/2 CL=292 1/4

Wheat headed slightly higher today, but nothing to
get too excited about. RSI is at a trendline test
point, and as such we could see a bounce tomorrow.

If you wanted to be more aggressive on this market
you could short below today's low; however I'll stick
to the weekend plan for tomorrow (again).

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7: MARCH CANADIAN DOLLAR
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CDH5 O=8062 HI=8097 LO=8038 CL=8083

The Canadian Dollar rallied off support today and
never got anywhere near our selling order. Today's
session looked a little bullish and with a slight
bounce in RSI I'm thinking rates might head higher
tomorrow as well.

I might kick myself for this later, but I'm holding
off buying until we see how the market reacts to the
8150 resistance line. In the meantime I'll run the
short order in case something whacky happens and the
market spins on a dime.

*SELL March Canadian Dollar at 8014
*Stop 8037
*Approximate Risk Exposure: $230 per contract
*Profit Target: 7916
*Approximate Profit Potential: $980 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH

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8: MARCH SILVER
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SIH5 O=675.5 HI=678 LO=668 CL=673

Got stopped out of silver today for a $275 loss as
prices ranged just high enough to tag the stop order.
Still think we had the right idea on this trade, but
might have framed the orders a little tight.

Tomorrow's session should give us a better idea of
whether we want to be buyers or sellers, so I think
I'll just sit it out and see.

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9: DECEMBER EURODOLLAR
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EDZ5 O=96.30 HI=96.33 LO=96.29 CL=96.305

Nice, eh? Nearly the same range as yesterday as the
ED is waiting on the interest rate announcement due
out Friday. Expect to see more aimless wanderings from
this market tomorrow. Notice too how the trading of the
last week and a half has made a pennant formation.

We'll look at bracketing this market for Friday, but
nothing tomorrow.

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10: WILD CARD
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No wild card market tomorrow.

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RECOMMENDED BROKER
==================================================

If you are looking for a broker that understands the
recommendations and could help you place them, call
Matt Zimberg at his toll free trading desk at
1-800-870-3327. You can also reach him via email at
[email protected]

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==================================================

CFTC Rule 4.41

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
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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.

==================================================

"Tom's Trades" for Wednesday, February 2, 2005

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"Tom's Trades" for Wednesday, February 2, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O=114-30 HI=115-04 LO=114-18 CL=114-26

Beautiful thing it 'tis ... sold 1 at 114-28 exit
at 114-20 for plus 8, $250. Then watched it turn
and head right back north. Took all the will power
I could muster to keep from buying it. It was so
clear.

We'll get into buying mode here shortly. Just need
a tad more structure.

Tuesday's close at 114-26 has us back on the same numbers ... a sell off 115-00 or 114-26

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2: MARCH EURODOLLAR
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EDH5 O=97.020 HI=97.030 LO=97.015 CL=97.025

We inched higher today. Same deal as yesterday ...

I'm on the trail of the 97.055 buy for certain.
It will probaly take a ton of patience before we
get there. I'm prepared for that. I am also looking
for a bounce carrying us to 97.040 for a sell setup
on a failure there.

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3: MARCH CANADIAN DOLLAR
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CDH5 O=8062 HI=8097 LO=8038 CL=8083

Sold at 8057. We touched 8038 and I rolled to 49.
We got stopped at 8050 for $70. I then bought 1
at 8064 and began squeezing the trade as we passed
thru 8075. When we touched 8090 I rolled to 8087
and stopped out at 8084 for $200.

We ended the day at 8083 ... amazing isn't it? ...
We'll play the all same numbers from yesterday
for a third day.

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4: FEBRUARY GOLD
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GCJ5 O=423.60 HI=424.10 LO=421.40 CL=422.90

We sold 423.70 and was stopped out at 422.30 for
$140. There was a pretty good buy signal with about
2 hours to go. I tried twice to get one bought
and couldn't ... had i stayed on it the third time
might have got me in about 421.70or so ... we ended
the day at 422.90 so no great loss.

Same number from TT and yesterday will guide us
tomorrow.

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5: MARCH COTTON
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CTH5 O=44.20 HI=44.35 LO=43.41 CL=43.88

the gap open took us above the target entry. It
came back and turned north so I bought 1 at 44.10.
I got stopped out at B/E.

Same numbers for tomorrow.

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6: MARCH COCOA
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COH5 O=1540 HI=1558 LO=1523 CL=1525

I sold 1 at 1557 and got out at 1546 for $110
at the end of the run. Snapped back near the end
of day.

Same TT numbers for tomorrow.
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7: MARCH CORN
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CH5 O=1.97 3/4 HI=1.98 1/4 LO=1.97 CL=1.97

Never gave us the retest. Same deal tomorrow.
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8: MARCH WHEAT
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WH5 O=2.91 3/4 HI=2.94 LO=2.90 1/2 CL=2.92 1/4

Never gave us the number. Same startegy as yesterday ... lookin' for 2.88