Wednesday, February 09, 2005

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

"Erich's Trades" for Tuesday, February 8, 2005 ==================================================
Hot off the commodity presses to you!

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

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


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.


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


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.


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.


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


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.


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.


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

No wild card market tomorrow.

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 Tuesday, February 8, 2005 ================================================
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.

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.

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.

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.

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.

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.

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.

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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