Friday, February 04, 2005

Erich's Update for Friday, February 4, 2005

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Erich's Update for Friday, February 4, 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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1: MARCH CORN
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CH5 O=195 1/4 HI=195 1/4 LO=194 1/4 CL=195

Can't seem to catch a break in corn lately. We sold
the market on the low today before prices recovered
and closed relatively high - overall not a good thing
going into tomorrow.

The good news is that we've got a strong resistance
level to say "you're wrong" without too much money at
stake. Leaving everything as is for tomorrow.

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2: MARCH COTTON
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CTH5 O=4430 HI=4445 LO=4310 CL=4312

That's a little more like it! Got a nice fill in cotton
today as prices fell off right from the open. As you
know we tried to sell cotton off the high, if we got the
opening price we were looking for. Unfortunately we didn't
get it; although in the future I might entertain selling
cotton from the open next time we're relatively certain
about the direction.

Bring exit stops to breakeven to protect yourself tomorrow.
First profit target is 4251.

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3: MARCH BEAN OIL
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BOH5 O=1898 HI=1903 LO=1882 CL=1886

Not much has changed for bean oil in respect to our
chance to get into another trade this week. The market
is getting closer to weekly resistance and we might
see a pause tomorrow since it's Friday. RSI is also
getting quite oversold, so support is likely not too
far away.

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4: ARPIL LIVE CATTLE
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LCJ5 O=8780 HI=8847 LO=8755 CL=8825

Nasty session today as cattle opened with a major gap
to the downside only to recover to where the market
left off yesterday. Regardless of where your stops were
you would have gotten taken out on the open for a loss.

This market is behaving even more wickedly than normal.
Think it's time to take a breather and reassess our
position over the weekend.

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5: MARCH COCOA
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CCH5 O=1590 HI=1609 LO=1580 CL=1594

Bit of a surprise out of cocoa as prices put on the
brakes today. RSI is hooking which makes me think we
could see lower prices tomorrow.

The more aggressive line is to take the market short
below today's support on the low and cover the trade
above 1600 (or the high if you can afford it). The more
conservative trade is to wait to see how prices respond
to the 1550 support before selling.

Since it's Friday, and I'm not crazy about holding cocoa
over the weekend, I think I'll opt for Plan 'B'.

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6: MARCH WHEAT
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WH5 O=288 1/2 HI=291 LO=288 CL=289 3/4

If you sold wheat yesterday then you would have likely
gotten stopped out for a small loss today as prices ranged
a little bit without going anywhere. Yes, we framed this
trade a little tight; however given our potential profit
target at 278, we really didn't have a lot of choice if
we were going to try and sell.

There's such clutter on all the grain charts right now
that it hardly seems worthwhile trying to trade them.
Sitting this one out tomorrow until we either get closer
to weekly support or see prices rally a bit.

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7: MARCH CANADIAN DOLLAR
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CDH5 O=8064 HI=8076 LO=8024 CL=8054

This is one trade that I'm feeling better about all
the time. Notice how rates made a stab at support today
but were unable to get low enough to find our order.
This is what support and resistance is supposed to do,
and if we're choosey about our lines, then we can stay
on the right side of the market.

Don't know if rates are coming down tomorrow or if they'll
rally off support, but if they do break the significant
support at 8017 we'll be there to sell!

*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

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8: MARCH SILVER
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SIH5 O=675 HI=678 LO=659 CL=667.7

Big day in silver range-wise; however prices really didn't
go anywhere. Tomorrow's interest rate announcement will
undoubtably have an effect on silver's prices (probably
down) but I'm not going to chance getting whipsawed. The
ranges are just too big right now to make for a predictable
entry.

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9: DECEMBER EURODOLLAR
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EDZ5 O=96.23 HI=96.24 LO=96.21 CL=96.22

Small day in the ED even though rates fell off a bit
from yesterday. While I want to sell the market there
isn't enough structure to put together a trade from
these levels. Unfortunately we just have to wait until
we get our next cue.

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10: WILD CARD
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No wild card market tomorrow.
==================================================
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 at
www.OptimusFutures.com

Erich's Update for Thursday, February 3, 2005

==================================================
Market Update for Thursday, February 3, 2005
==================================================
Hot off the commodity presses to you!

Erich
http://www.supportandresistance.com

"Pessimism ought to be considered a sin." - Conrad Hilton
==================================================
1: MARCH CORN
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CH5 O=196 HI=196 1/4 LO=195 CL=195 1/4

My fears were confirmed today when the bottom fell out
of the corn market. Not a real surprise however as buying
the market was a riskier countertrend trade...and I knew
I shouldn't have done it...but it was worth the risk.

The "good" news is that we're back to solid support and
a break below 195 should see prices continue lower to the
next weekly support at 191 and 184. 191 is obviously too
close to work, so we'll have to be a little more aggressive
and try and sell it to 184.

*SELL March Corn at 194 1/4
*Stop 196 1/4
*Approximate Risk Exposure: $100 per contract
*Profit Target: 184 3/4
*Approximate Profit Potential: $475 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate

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2: MARCH COTTON
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CTH5 O=4400 HI=4450 LO=4375 CL=4427

Okay, close enough. I don't think we're going to see
a test of 4500 as RSI is currently at a test point and
as such we could see a reversal as early as tomorrow.

If you wanted to be really aggressive you could sell
the market in anticipation of the resistance holding. If
we saw cotton open 4500 - 4500 you could sell it with
stops above 4500.

A more traditional sell would be to short below today's
support at 4370 - 4375. Covering the trade above 4400 would
place less than $200 at risk, which is good for cotton.
Profit target is 4250, but prices could go lower still.

*SELL March Cotton at 4367
*Stop 4402
*Approximate Risk Exposure: $175 per contract
*Profit Target: 4251
*Approximate Profit Potential: $580 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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3: MARCH BEAN OIL
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BOH5 O=1910 HI=1915 LO=1892 CL=1894

"Annoyed" is the word that best describes my attitude
towards bean oil right now. Each market has it's own
personality, and bean oil's personality is to try and
whipsaw you out of the trade before it makes a break
for it. This market has more moves than Shaq, Kobe and
Jordan combined.

Just sitting and stewing more tomorrow.

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4: ARPIL LIVE CATTLE
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LCJ5 O=8865 HI=8875 LO=8817 CL=8825

Cattle ran headlong into the resistance at 8870 - 75
and put on the brakes. Obivously I was hoping for a
stonger session so we could move our stops to break
even for tomorrow, but right now things aren't looking
so good.

We've got support at the 8815 area - I just hope it's
enough to hold the market up, otherwise I'm going to bail.
You can leave exit stops where they are, or bring them
just under today's low.

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5: MARCH COCOA
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CCH5 O=1575 HI=1606 LO=1575 CL=1603

Doesn't that just frost your cookies! This is the fifth
time (yes, I've counted) that we called cocoa beautifully
only to have the market gap our order and keep us out
of the trade. I'm beginning to think I've got to buy the
market on the open in order to have a chance at getting
into this market!

Sadly I expect cocoa to head higher tomorrow as well;
however there's not enough profit potential left to make
a trade worthwhile.

Sitting this one out.

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6: MARCH WHEAT
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WH5 O=291 1/2 HI=291 1/2 LO=287 3/4 CL=288 1/4

Got the bounce we were looking for in wheat today when
prices tested the RSI trendline. You would have easily
gotten filled if you were more aggressive and shorted
below yesterday's low; however it was hit 'n miss if
you got filled from the weekend order as prices only
made the low in the closing moments of today's session.

If you didn't get short today you can sell the market
again tomorrow; however I'd recommend giving prices a
couple of ticks before placing your order. First target
is 278 3/4.

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7: MARCH CANADIAN DOLLAR
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CDH5 O=8100 HI=8101 LO=8053 CL=8080

Yet another good bounce off the 8100 resistance line
today. You could place a buy order above the 8100 line
and look to trade the CD to 8200, which is the likely
target if the market advances; however I'm sticking with
the short side for now.

Friday's US interest rate report is likely to have some
effect on the CD as well.

*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=673.5 HI=682 LO=672 CL=675

Silver continues to tease as prices test resistance and
support. No doubt traders are watching the US dollar to
see whether they need to buy silver as a hedge or put
their money elsewhere. Silver's likely to remain choppy
tomorrow as well in anticipation of Friday's report.

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9: DECEMBER EURODOLLAR
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EDZ5 O=96.30 HI=96.31 LO=96.245 CL=96.25

Today's drop in the ED was a bit of a surprise as the
market broke mild support at 9629 in advance of Friday's
interest rate report. I want to sell the market tomorrow
however today's large-ish range is making it difficult
to get a decent RRR before encountering support.

Maybe we'll get lucky and rates will stall tomorrow
so we get another chance.

==================================================
10: WILD CARD
==================================================
No wild card market tomorrow.
==================================================
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]

"Tom's Trades" for Thursday, February 3, 2005

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"Tom's Trades" for Thursday, February 3, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O=114-24 HI=115-01 LO=114-18 CL=114-28

I sold 1 at 114-28 and exited at 114-20 after it failed to press lower than -18.
This play took us to within an hour of the FED announcement. I was on the
sidelines for the balance of the day.

The last hour today was very choppy as the market digested the FED rate
rise and later comments. We ended up at 114-28. Make sure all the dust has
settled before attempting any trades tomorrow. If there is any choppiness early
on, sit tight, it'll mellow out. Same numbers tomorrow 115-00 and 114-16. Sells
only.

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

We inched lower today. Same deal as yesterday ... Boring, Boring

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=8100 HI=8100 LO=8053 CL=8080

The gap up and failure was too good to pass up. Sold 1 at 8088 and exited
at 8062 for $260. Once we'd broken 8060 there was no reason to let it come
back on us. I had actually rolled my stop to 8061 ... a little slippage. Had
the move back to 8080 not started so late in the day I might very well have
bought something on the break above 8060.

We climbed right back to 8080 so we'll play the same numbers again tomorrow.

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4: APRIL GOLD
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GCJ5 O=423.80 HI=424.10 LO=421.90 CL=423.00

Almost a carbon copy of yesterday. Sold 423.80, brought the stop to B/E as
we broke 423.00 and bailed at 422.30 for $150. 422.00 is becoming a very
strong support area.

Same numbers from TT and prior updates will guide us tomorrow.

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5: MARCH COTTON
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CTH5 O=44.00 HI=44.50 LO=43.75 CL=44.27

I bought 1 at 44.15 today. I actually considered keeping this trade on over
night ... until it hit 44.50 and failed. zi chose to exit at 44.40 picking up $125.
I would have bought again on the late drop to 44.10 but it was just too late
in the day.

Stay with all the same numbers for tomorrow.

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6: MARCH COCOA
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COH5 O=1575 HI=1606 LO=1575 CL=1603

I was all poised to sell the break back below 1580. Only 1 problem ... it never
did it. Near end of day it made a run on 1600, hitting 1605. Too lat ein the
day to play it. We ended the day at 1603 just off the highs for the day. I'll
be watching very closely tomorrow. Do the plays from TT ... buy a break
above 1600, sell a break below 1580. I will also sell a break below 1600 now.

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7: MARCH CORN
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CH5 O=1.96 HI=1.96 1/4 LO=1.95 CL=1.95 1/4

I bought 1.95 1/2 with a stop at 1.94 1/4 risking $62. I'll roll the stop to
B/E on a trade above 1.96 1/2 and to 1.97 at 1.98. If we see 2.00 I'm gone
unless it's just smokin' to the upside. Every where we go, people wanna' know
who we are, so we tell them, we are the scalpers, the mighty, mighty scalpers
... :) Sorry, one of the grandaughters is a cheerleader.

For tomorrow, you can join me if you can manage a fill below 1.96 or you
can sit back and laugh at me ... your choice.

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8: MARCH WHEAT
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WH5 O=2.91 1/2 HI=2.91 1/2 LO=2.87 3/4 CL=2.88 1/4

I bought 1 at 2.88 1/2 with a stop at 2.87 1/4 risking, again, $62. Any available
fill below 2.89 can be bought tomorrow. Based on Project A numbers into
the night I'm not looking real good on eithe rthe Corn or this one, am I?
We'll see what tomorrow brings.

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