Wednesday, February 09, 2005

Traders Helping Traders Daily Update for Tuesday , Feb 8th 2005

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"Erich's Trades" for Tuesday, February 8, 2005 ==================================================
Hot off the commodity presses to you!
Erich http://www.supportandresistance.com

"When prosperity comes, do not use all of it." - Confucius

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1: MARCH CORN
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CH5 O5 HI-7 1/4 LO-4 3/4 CL-6 1/4

Corn took a strong bounce off the 195 support line today. The fact that prices closed above 196 (just barely) is also a good sign for the bulls. Technically the market is still in a downtrend however, and a single session does not a rally make.

Running with the weekend trade for tomorrow; although I don't expect to get filled.

*SELL March Corn at 193 3/4
*Stop 196 1/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 184 3/4
*Approximate Profit Potential: $450 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate

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2: MARCH COTTON
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CTH5 O-50 HI-75 LO-01 CL-24

Got stopped out at breakeven with our cotton short trade from last week. The market is wandering a bit, no doubt in anticipation of the cotton report out this week.

Standing aside tomorrow until we get a better entry.

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3: MARCH BEAN OIL
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BOH5 O-10 HI-40 LO-97 CL-00

Bean Oil rallied hard today but was turned around when prices hit the 1940 resistance. Sound familiar? It should, that was the resistance level we were expecting a reaction from.

Today's low close is encouraging for our short trade tomorrow but RSI is suggesting prices could head a little higher. Running the sell tomorrow anyhow. Our entry is far enough away that we shouldn't be filled prematurely.

*SELL March Bean Oil at 1879
*Stop 1906
*Approximate Risk Exposure: $162 per contract
*Profit Target: 1761
*Approximate Profit Potential: $708 per contract
*RRR: 4:1
*Degree of Risk: Moderate

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4: ARPIL LIVE CATTLE
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LCJ5 O-25 HI-80 LO-10 CL-65

Cattle is still struggling with the long term support on the high. I am really tempted to sell this market tomorrow as I think the resistance is going to be too much for it; however I'll wait for the confirmation before committing to the trade.

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5: MARCH COCOA
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CCH5 O-70 HI-21 LO-58 CL-15

Well, I'm certainly glad I waited to see what cocoa was going to do around the 1550 support, because it was a doozie of a reaction! A more moderate bounce off the support would have gotten me long tomorrow; however the big range today is likely to bring the sellers out of the woodwork tomorrow and put a damper on the upside.

Not to worry though. A stall/pause will be just what we need to confirm resistance and give us another chance at this market.

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6: MARCH WHEAT
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WH5 O-8 1/4 HI-3 LO-8 1/4 CL-2 1/2

Wheat rallied along with the other grains today, but topped out at the 293 resistance we were watching. The strong close might see prices continue higher tomorrow but right now I can't bring myself to buy - not yet anyway.

Running the weekend sell trade tomorrow, but I don't expect to get filled.

*SELL March Wheat at 295 3/4
*Stop 289 3/4
*Approximate Risk Exposure: $200 per contract
*Profit Target: 266 3/4
*Approximate Profit Potential: $950 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate

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7: MARCH CANADIAN DOLLAR
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CDH5 O-85 HI-86 LO-45 CL-62

Good news, bad news in the Canadian Dollar today. If you sold the market from last week's trade, today's range earned us some very nice profits; however if you tried to sell the market today, you would have gotten shut out as the market never rallied high enough to find our entry order.

We've got a little over $500 in profit per contract as of today's close. Let your account be your guide as too how much of that money you care to risk for tomorrow. Personally, I'm not leaving my exit stops too far away and might place them just above the intraday resistance at 7975.

First profit target is support at 7916 followed by 7881.

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8: MARCH SILVER
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SIH5 O-4 HI-0 LO-4 CL-5.5

Silver gave us a nice entry today as prices shattered the 658 support line. This is how we normally like to enter this market, on a strong breakout, and silver has a tendency to decimate a resistance area once it puts it's mind to it.

The problem now is how to manage the trade. Again you will have to let your account be your guide as the "best" plan is to leave stops above 662 or 660, if you wanted to snug them up a bit. Alternatively there is enough room (but just barely) to get stops to breakeven for tomorrow. Regardless, remember to have your stops working during the overnight session.

First profit target is 642.5.

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9: DECEMBER EURODOLLAR
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EDZ5 O–.27 HI–.28 LO–.26 CL–.26

Got the pause and the RSI bounce today we were looking for. The very small range makes me inclined to want to bracket the high and low and try to sell it to the next significant support at 9617.

Note: while we don't have a lot at risk here, the tighter parameter could lead to a whipsaw tomorrow, so it is a higher risk trade for that reason.

*SELL December Eurodollar at 96.2575
*Stop 96.2825
*Approximate Risk Exposure: $63 per contract
*Profit Target: 96.17
*Approximate Profit Potential: $215 per contract
*RRR: 3:1 *Degree of Risk: Moderate

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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, February 8, 2005 ================================================
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1: MARCH 30 YEAR T BOND
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USDH5 O-5-30 HI-6-18 LO-5-28 CL-6-15

A continuation of the strength from Friday propelled the Bonds higher still. We settled at 116-15 adding another half a point. We started off the day with a run to test 116-00 which it did and failed just as we were hoping for. From there we went to -28 a couple of times and bounced right back. Had I been able to I probbly would have taken a shot at the sell but it never gave us a shot at a fill until the third chance. By then I was way to leery to take it. From there we tacked on the half higher.

Some might wonder why I'm not doing anything to speak of at these levels since I play -00 and -16 almost mechanically. Altough that's true I will only utilize the -00/-16 methodology when I am surrounded by S&R. The 115-16 sell in TT was a departure from my normal approach. I was willing to do this because of the failure from 116-00 that ocurred on Friday.

I am a spectator tomorrow ... unless ...

If we test 117-00 and then fail I will make a play selling 116-30 to 28 with a 116-31 stop. Very, very tight management. This is NOT a delegatable trade, if you aren't watching it by the tick, let it pass and we'll take a look at a 116-00 sell later.

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2: MARCH EURODOLLAR
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EDH5 O—.025 HI—.030 LO—.020 CL—.025

More of the same ... nothing. My numbers are still the numbers.

I guess you have to assume there is no interest in selling here ... ya' think that might be a chart that has run out of downside go juice? My lord, that is ugly.

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3: MARCH CANADIAN DOLLAR
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CDH5 O-85 HI-86 LO-45 CL-62

I sold 1 at 7984. I found that little drop, bounce back to the open high and second failure too much to resist. Once we finally broke 60 I rolled to 67, when we broke 55 I rolled it to 61, when we broke 50 I rolled to 53, when 45 was touched I brought it 51 and was stopped out that 52 for $320.

I can't play anything in this neighborhood. It "ok" management structure but won't support an entry for me. I will hope for a return to test 8000 tomorrow. IF we seee that, we obviously pick up the TT numbers and go again.

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4: APRIL GOLD
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GCJ5 O-6.40 HI-7.70 LO-4.00 CL-5.40

Stingy dudes down there in that Gold pit. You'd think knowing our $10 Gold Channel they'd be nice and run that thing right up there about 419.50 and THEN fail but, no ... they take it to 417.70, thumb their collective noses at us and take off south.

We will press on despite their inhospitable nature ... 410-420 $10 Channel for tomorrow.

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5: MARCH COTTON
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CTH5 O.50 HI.75 L.01 CL.24

We tapped on 43.00 twice and then bounced a bit. Too bad it was too late in the day for me to play. It was aboput the way I drew it in the playbook. Real purdy like.

We'll hope they give us another test of 43.00 earlier in the day tomorrow. Follow the TT numbers agin tomorrow.

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6: MARCH COCOA
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COH5 O-70 HI-21 LO-58 CL-15

Well, I was smart enough to call 1560 strong for protective reasons, sure wish I'd been smart enough to call for a buy on a failed test of it. It was so obvious I hope some of you were able to see it and capitalize.

Same TT numbers for tomorrow ... include a retest of 1560 that fails as a buy as well. A barn door closing with no horse.

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7: MARCH CORN
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CH5 O=1.95 HI=1.97 1/4 LO=1.94 3/4 CL=1.96 1/4

Bought 1 at 1.95 1/2 with a stop at 1.94 1/4. The stop is now at B/E and we head for the open tomorrow. Tune in for tha adventure tomorrow.

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8: MARCH WHEAT
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WH5 O=2.88 1/2 HI=2.91 LO=2.88 CL=2.89 3/4

I bought 1 at 2.89 even with a stop at 2.87 3/4. I now have the stop at 2.92 1/4 headed into the morning. If I should get stopped out and then we turn north I will buy the break above 2.95 or sell the failed test there.

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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 insure 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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