Monday, February 14, 2005

THT Daily Update for Friday, February 11, 2005

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PART ONE: Erich's Trades for Friday, February 11, 2005
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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 O-6 1/2 HI-9 3/4 LO-6 1/2 CL-8 1/4

Hey, whaddaya know...there is some life left in the corn market after all! Today's rally looked to be pretty strong as the market took off from the open. As before I'm not getting too excited about buying just yet, but I will keep a lookout tomorrow. If prices head higher look for resistance in the gap from January 12, 2005.

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2: MARCH COTTON
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CTH5 O-45 HI-00 LO-40 CL-74

While we saw the bounce in cotton coming, I have to admit it was much more aggressive than I was expecting. It'll be interesting to see what prices do with the 4500 resistance tomorrow - after all, it is Friday.

If we see a stall we could have a good line to play for next week.

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3: MARCH BEAN OIL
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BOH5 O-23 HI-35 LO-17 CL-19

Bean Oil showed us a bit of resistance today when the market closed near the low of the day. Notice too that RSI is at a test point and as such we might see a bounce tomorrow and lower prices.

You could stick with the weekend plan (although you're likely not to get filled tomorrow) or if you wanted to be more aggressive you could sell below the 1915 support.

*SELL March Bean Oil at 1914
*Stop 1936
*Approximate Risk Exposure: $132 per contract
*Profit Target: 1761
*Approximate Profit Potential: $918 per contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate

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4: ARPIL LIVE CATTLE
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LCJ5 O-15 HI-15 LO-65 CL-72

Well, that worked out pretty well, don't you think? ;-)

Sold cattle today as per our plan and the market almost found our first profit target in a single session! I love it when that happens! Now for the tough part - managing the trade.

We'll probably see another bearish session tomorrow; however there is no denying the abundance of support on the low. At the very least you should bring exit stops above the intraday resistance at 8722 to protect some profit. There's about $500 on the table right now though, so don't be shy about bringing those stops in closer to the close.

Certainly if we see a low opening tomorrow (if you can watch the open), we should bring stops in tighter in case of a "fade", but right now it looks as though we will make a run at the 50% level - 8630.

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5: MARCH COCOA
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CCH5 O-45 H-60 LO-35 CL-59

Thought we would at least see cocoa try to get to 1515 today, but it seems the 1530 support was good enough to hold the market up for a bit. Today's session has a bit of "time-to-run-prices-up-again" flavour, so I'm not entirely sure what to make of this market tomorrow.

Think I'll just stand aside.

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6: MARCH WHEAT
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WH5 O-9 1/2 HI-7 LO-9 CL-6 1/4

Wheat was a regular bottle rocket today as prices rallied right from the open. Thinking this market might be ready to head higher (I'm a little more comfortable buying wheat than corn right now); however tomorrow's Friday and we've got a bunch of resistance above the market.

Would love to see wheat stall out tomorrow, this would give us a chance to buy into the market on Monday. Keep your eye on RSI to time your entry.

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7: MARCH CANADIAN DOLLAR
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CDH5 O-74 HI-73 LO-64 CL-59

Big day in the CD. I imagine a few daytraders did alright here as the market made a nice little breakout after opening range expired. Alas us position traders didn't have a trade here today, and tomorrow doesn't look much better.

The resistance at 8100 is making me a little gunshy about buying, but if we clear that (with a reasonably strong close) I'll consider buying it early next week.

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8: MARCH SILVER
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SIH5 O-0 HI-8 LO-7 CL-6.5

Holy Moley...who lit a fire under Silver today? These are the ranges I live for, unfortunately we weren't on board with this one today. Needless to say the market is looking a little bullish (how's that for an understatement) and as such our focus has shifted to buying...but not tomorrow, not after today's huge range.

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9: DECEMBER EURODOLLAR
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EDZ5 O–.365 HI–.37 LO–.31 CL–.325

Dare we try selling the ED again? Today the market showed us resistance at 9637, and RSI is very close to a test point. While we might see a bounce tomorrow we're still able to keep risk reasonably small, so I might look at selling below today's support.

*SELL December Eurodollar at 96.3025
*Stop 96.345
*Approximate Risk Exposure: $107 per contract
*Profit Target: 96.17
*Approximate Profit Potential: $325 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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10: WILD CARD - ARPIL LEAN HOGS
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LHJ5 O-70 HI-50 LO-70 CL-77

We got even with hogs today for the gap that shut us out of our trade a couple of weeks ago. In fact the market found our order quite nicely right from the open and never looked back.

Management is the key now. There could be some profit taking tomorrow as we're currently up over $700 per contract as of the close. Don't be shy about getting those stops in nice and tight in case of a bounce. At the very least you will want to have stops at 7225 or 7210 to protect the majority of our accumulated profits.

First target is support at 7137.5 which we will likely see tomorrow.

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RECOMMENDED BROKER
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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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PART TWO: "Tom's Trades" for Friday, February 11, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O-6-23 HI-6-27 LO-5-28 CL-6-01

The gap down open took us well beyond a comfortable sell level and the ensuing rise didn't quite get high enough for me at 116-27. Let me restate that ... -27 was high enough but they wouldn't give me a bid/ask that allowed me anything better than a -25 fill. In retrospect I probably should have taken it and ratcheted down my management as a compensation strategy.

I sold 116-14 and was stopped out at B/E. I then sold 116-15 and was stopped out at -03 for plus 12, $375. We were by then close enough to the final hour I just buttoned up shop.

The close at 116-01 has the focus at 116-00. Since we are not buyers yet, we can proceed with the 116-00 sell as usual even the we are at 116-01. The earliest I will initiate the trade is 115-29.

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2: MARCH EURODOLLAR
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EDH5 O—.035 HI—.035 LO—.025 CL—.030

Keep the eyes on the TT numbers. Had I known it would stay right here for a month and a half I would have sold some option premium ... lol.

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3: MARCH CANADIAN DOLLAR
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CDH5 O-74 HI-73 LO-64 CL-59

Straight out of TT I bought 1 at 8010 after the break of 8008. We did all the rolls right up to 60. We didn't quite make it all the way to 8075 but, at 73 I moved the stop to 69 and was stopped out at 8088 for $780.

Tomorrow I will sell a failed test of 8100, I will sell a failed test of 8080 and I will buy a break above 8100. My money is on the failed test of 8080.

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4: APRIL GOLD
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GCJ5 O-4.80 H-0.10 LO-3.10 CL-8.70

They are really torturing me. A $500 plus move today and they would even give us a fighting chance at a play. We are back up near the top of the channel with the close at 418.70. I'll be looking for the sell above the 80th percentile tomorrow after the confirmation.

$10 channel for tomorrow, gang.

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5: MARCH COTTON
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CTH5 O-.45 HI-.00 LO-.40 CL-.74

With the cloe yesterday at 43.00 it did not surprise me the see the gap open up at the next exact resistance level. I bought at 43.55. We touched 44.50 and broke back hard. I got out at 44.30. It of course then made it thru 50 and worked higher before closing at 44.74 off the high for the day at 45.00. I'll take the 75 points, $375 and quietly mutter under my breath how I really feel.

For tomorrow, I'll buy a break above 45.00 with a stop at 44.83 and a B/E roll at 45.22. The target is 45.90-46.00. I'll also ... and I think this is the more likely trade ... sell one on a failed retest of 45.00 with a stop at 45.03 or 07, a B/E roll at 44.81 and a target of 44.00. On both the buy and the sell keep a trailing stop running 25-30 points behind the market. Do tight rolls at .50 both ways and 44.25 on the sell and 45.75 on the buy.

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6: MARCH COCOA
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COH5 O-45 HI-60 LO-35 CL-59

Nothing for us in Cocoa today. We stayed in between the numbers at 1560 and 1520 all day.

All the same TT numbers plus the 1560 trade from yesterday's update. With the close at 1559 we are looking at a buy above a 1560 break or a sell on a failed retest.

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7: MARCH CORN
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CH5 O=1.96 1/2 HI=1.99 3/4 LO=1.96 1/2 CL=1.98 1/4

We began the day long from 1.95 1/2 again. The gap up open was nice to see but the midday bounce to 1.99 3/4 was just stellar. We bailed at 1.99 1/2 picking up another 4 cents, $200.

Tomorrow it's the TT numbers as well as selling a failed test of 2.00 or buying the break above 2.00 with a very short stop both ways ... 2.00 3/4 on the sell and 1.98 3/4 on the buy.

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8: MARCH WHEAT
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WH5 O=2.89 1/2 HI=2.97 LO=2.89 CL=2.96 1/4

I thought the open was a test of th elows so I bought one as best I could paying 2.90. We were operting under the belief that 2.95 would end it all. Consistent with that belief I was stopped out at 2.95 1/4 for 5 1/4 cents $262.

Traders Helping Traders Daily Update for Thursday, February 10, 2005

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PART ONE: Erich's Trades for Thursday, February 10, 2005
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The Subscribers got this on Wednesday Night. The Test Drive version is posted the day AFTER for tracking and educational purposes only. Enjoy!

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

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1: MARCH CORN
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CH5 O-4 1/2 HI-5 3/4 LO-4 1/2 CL-5

[YAWN!] Nothing new in corn today - again. This is almost getting to be too much to bear. Prices want to go higher, but can't. They should go lower, but won't.

Sticking with the weekend sell tomorrow.

*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: Low

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2: MARCH COTTON
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CTH5 O-05 HI-06 LO-65 CL-70

Cotton recovered slightly off the 4260 support today as buyers recognized this to be a good price level. Still looking for a test of 4200 before selling; however I think we could see a continued push higher tomorrow.

Standing aside for now.

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3: MARCH BEAN OIL
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BOH5 O-15 HI-25 LO-07 CL-15

Bean Oil held the yesterday's resistance today. I'm thinking that prices might rally higher tomorrow, but with all that resistance at 1940 and 1950 I'm can't put together a decent trade, so I'll have to stick with the weekend sell for now.

*SELL March Bean Oil at 1897
*Stop 1926
*Approximate Risk Exposure: $174 per contract
*Profit Target: 1761
*Approximate Profit Potential: $816 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate

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4: ARPIL LIVE CATTLE
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LCJ5 O-65 HI-85 LO-10 CL-12

Got the reaction we were looking for today as prices fell off to the trendline. I guess the decline was spurred on by the news that the US border will reopen to Canadian beef imports in a couple of weeks, and as such traders envision an abundance of supply around the corner.

Regardless of the "funnymentals" I'm looking to sell below today's low. Bear in mind selling below a breakout below today's support would be safer; however that will mean entering the trade on a Friday - which I'd rather not do.

*SELL April Live Cattle at 87.975
*Stop 88.425
*Approximate Risk Exposure: $180 per contract
*Profit Target: 86.575
*Approximate Profit Potential: $560 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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5: MARCH COCOA
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CCH5 O-90 HI-98 LO-30 CL-34

"RSI is at a test point, and while I would normally look at selling from here, I'm going to wait for a confirmation tomorrow" - hmmm, I guess I should have sold it anyway. ;-)

Cocoa took off on us today. Too bad, since we had the right idea about this market. Would love to sell it again tomorrow, but I think the 1515 support is going to get in the way.

Next support reaction we'll be all over this market.

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6: MARCH WHEAT
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WH5 O-2 1/2 HI-3 3/4 LO-9 1/2 CL-0

More of the same from wheat today as prices didn't do too much except continue to test support. We'll likely see higher prices soon; however with all the resistance above the market I can't bring myself to buy just yet.

Sticking with the weekend plan 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-99 HI-15 LO-85 CL-01

Notice today's high and close? Right back to the 8017 resistance from the long term charts and the round numbers at 8000. I thought seriously about selling the CD tomorrow below the 7985 support, but it would be a risky trade. Alternatively I'll wait for confirmation before selling again.

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8: MARCH SILVER
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SIH5 O-5.5 HI-1 LO-9.5 CL-9

Silver surprised me a bit today as we got stopped out at breakeven. That wasn't the surprise however. The surprise was that prices stayed below the 662 resistance. I thought for sure we would see a rally above there today but it didn't happen.

Watching RSI for a test of the trendline to cue our next sell order - but nothing for tomorrow.

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9: DECEMBER EURODOLLAR
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EDZ5 O–.26 HI–.365 LO–.255 CL–.36

Big day in the ED today as rates rallied to the top of the trading range, stopping us out for a $65 loss in the process. While I'm reluctant to buy this market it continues to show us support at 9626, so selling is becoming more difficult as well.

I'd like to see it clear 9640 before getting too serious about buying however.

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10: WILD CARD - ARPIL LEAN HOGS
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LHJ5 O-70 HI-50 LO-70 CL-77

Hogs made a run for it today before getting stomped on from nearby resistance. Tomorrow could be our second chance at this market that gapped us the week prior before running straight to our profit target.

Looking to sell a break of today's low and cover the trade above the intermediate resistance at 7400. First profit target is 7135 but I think prices could go lower still.

*SELL April Lean Hogs at 73.575
*Stop 84.025
*Approximate Risk Exposure: $180 per contract
*Profit Target: 71.375
*Approximate Profit Potential: $880 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate

==================================================
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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PART TWO: "Tom's Trades" for Thursday, February 10, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O-6-13 HI-7-06 LO-6-12 CL-6-24

The open was the retest of 117-00 we sought. I sold 116-27. The ride south was swift from there. We barely had time to roll stops before we were at 116-16. I took what I could get at 116-17 for a 10 tick winner, $312. After the brief foray down to -10 where I did a breakeven sell of -15 we started the climb north again. It was just almost a picture perfect buy off the break back above -16. There was a pullback from -26 to -21 that probably would have stopped us out at B/E or close to it. I watched but stayed on the sidelines.

We settled at 117-07 still exhibiting some upside power. The structure is building but no where near enough to get comfortable with the full array of trades. For tomorrow I will sell a break below 117-00 much as we did today and yesterday.

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2: MARCH EURODOLLAR
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EDH5 O—.025 HI—.035 LO—.020 CL—.030

We inched a teeny bit higher, still nothing tradable. Keep the eyes on the TT numbers.

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3: MARCH CANADIAN DOLLAR
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CDH5 O-99 HI-15 LO-85 CL-01

We opened with a little bit of a gap down. It got very choppy and unpredictable I watched for a while and said "no thanks". Just too, too much goofiness to risk anything.

TT numbers for tomorrow again. Make it prove itself before jumping in. Be very cautious of the chop, if it surfaces again, just leave it be until it smoothes out some.

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4: APRIL GOLD
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GCJ5 O-3.30 HI-4.80 LO-1.50 CL-4.50

I bought 1 at 412.10. Not the optimum fill by any stretch but it was the only thing available after the confirmation. We started getting close to EOD so I took what was on the table exiting at 413.80 for a small winner, $170. We probably won't see anything playable tomorrow as the end of day move was pretty bullish.

$10 channel for tomorrow, gang.

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5: MARCH COTTON
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CTH5 O-.70 HI-.70 LO-.61 CL-.07

I should have treated 42.61 as a test of 42.50 and bought it right after the open. I didn't. I waited for ther break of 43.00 andbought 1 at 43.05. I brought my stop to 43.57 as we touched 43.70 and was stopped out at 43.55 picking up 50 points, $250. After that we came right back down to 43.00 closing at 43.04.

Same TT numbers for tomorrow.

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6: MARCH COCOA
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COH5 O-90 HI-98 LO-30 CL-34

After about an hour of watching Cocoa beating itself half to death on 1600 to 1595 I sold 1 at 1595 hoping it would go somewhere before it got too late. About an hour prior to the close we finally got some movement. It pulled up pretty sharply, as one would expect, at 1560. I exited there just in time to see it fall another 30 points. I'll take my $350 and bite my tongue.

All the same TT numbers plus the 1560 trade from yesterday's update. With the close at 1534 we are obviously hoping to see 1520 and a following failure at 1520 tomorrow.

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7: MARCH CORN
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CH5 O=1.94 1/2 HI=1.95 3/4 LO=1.94 1/2 CL=1.95

I bought 1.95 1/2 again today with a 1.94 1/4 stop. Night action seems to say we did good ... we'll see tomorrow. Remeber this about scalping.

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8: MARCH WHEAT
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WH5 O=2.92 1/2 HI=2.93 3/4 LO=2.89 1/2 CL=2.90

I left the Wheat alone today. It really never got to any of our numbers. We settled near the lows of the day at 2.90 even. I'll be looking at the 2.88 deal from TT tomorrow.

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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.

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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.

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