Monday, February 28, 2005

Traders Helping Traders Daily Update for Friday Feb 25, 2005

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Erich's Update for Friday, February 25, 2005
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Hot off the commodity presses to you!
Erich Senft, CTA
http://www.supportandresistance.com

"Nothing can stop the man with the right mental attitude from achieving his goal." - Thomas Jefferson
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1: MAY CORN
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CK5 O-3 1/4 HI-4 3/4 LO-2 1/4 CL-3 1/2

Nearly the same range today as what we saw yesterday. The fact that support held does look better for the bulls tomorrow, but I'm not keen on entering this trade on Friday only to hold it over the weekend.

Think there might be other traders with the same mindset so we'll pass tomorrow and look for a chance to buy on Monday.
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2: MAY COTTON
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CTK5 O-50 H-I20 LO-80 CL-75

Why do we get these kinds of set ups on a Friday? Everyone knows I don't like to trade cotton on a Friday and here we see RSI giving us a test point and good support at 4780. Ditto for the resistance at 4920, the market showed some definite sensitivity here today as prices fell from the high to the close.

If you wanted you could run with yesterday's plan for tomorrow, or if you wanted to be more aggressive take the market long on a break of today's high and cover the trade below the close. Either way I think you're looking at a HIGH risk trade.

With a little bit of luck cotton won't do anything tomorrow and then we implement our great plan on Monday.

*BUY May Cotton at 4966
*Stop 4924
*Approximate Risk Exposure: $210 per contract
*Profit Target: 5129
*Approximate Profit Potential: $815 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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3: MAY BEAN OIL
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BOK5 O-90 HI-08 LO-40 CL-54

Excellent! Just what we were hoping for...a bit of a pullback move! Today bean oil prices stalled out but didn't move too much either direction, reinforcing both support and resistance. I'm running the same trade for tomorrow; however I do consider it to be of greater risk. Ideally I would like to see the market continue to test support for one more session before we buy in.

*BUY May Bean Oil at 2222
*Stop 2189
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2359
*Approximate Profit Potential: $822 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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4: ARPIL LIVE CATTLE
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LCJ5 O-25 HI-72 LO-15 CL-27

Cattle found some definite resistance today as prices hit the 8670 area. Notice how low the closing price was? Prices ran up, touched the line and retreated. While I normally don't like to take a new position going into the weekend, I think cattle is due to come down tomorrow. RSI is at a test point and today's reaction is getting me thinking "sell".

Keep in mind that the "safer" trade is to wait for the confirmation of resistance tomorrow (ie. a lower session) and then sell the market on Monday. But if you wanted to be a little more aggressive consider the following:

*SELL April Live Cattle at 86.02
*Stop 86.37
*Approximate Risk Exposure: $140 per contract
*Profit Target: 84.02
*Approximate Profit Potential: $800 per contract
*RRR: 5 1/2:1
*Degree of Risk: Moderate to HIGH
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5: MAY COCOA
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CCK5 O-31 HI-58 LO-04 CL-56

Cocoa mounted a charge today and posted some higher prices, but my feelings about the market haven't changed too much. While I think we will see prices continue higher there is resistance above the market, most noteably at 1670 and 1700, plus a couple of gaps that are making me hesitant about getting in right now. Think I'll just watch for tomorrow.
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6: MAY WHEAT
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WK5 O-3 3/4 HI-6 LO-0 1/2 CL-1 1/2

Slightly smaller range than yesterday with prices reinforcing resistance and shying away from support. Like corn, I don't think wheat is ready to take off yet - I hope. I'd like to see at least one more session post lower prices, maybe even test the support at 317, that is, if it's not asking too much.
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7: MARCH CANADIAN DOLLAR
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CDH5 O-29 HI-74 LO-05 CL-57

Don't even talk to me about this market...I'm so mad I could spit! For the second time in a week the CD whipped us out of a perfectly good trade! Needless to say that the market is not behaving like it's supposed to, so I'm not even looking at this market tomorrow.
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8: MARCH SILVER
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SIH5 O-3 HI-9.5 LO-8.5 CL-8.3

Silver prices were all over the board today. The market looks like it should head lower to test support before posting another rally. I'd like to see a bounce off of 710's support before buying, but I don't think I'll try anything fancy for a Friday.
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9: DECEMBER EURODOLLAR
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EDZ5 O–.095 HI–.105 LO–.045 CL–.05

Nothing new to report in the ED. Rates continued lower and are just a couple of ticks shy of the 9600 support. Hopefully we will see a bit of support here going into the weekend - it might actually give us something to work with next week.
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10: WILD CARD - APRIL LEAN HOGS
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LHJ5 O-30 HI-85 LO-85 CL-90

There's our hiccup, but I'm not buying going into a weekend. Bad enough I'm considering getting into the cattle market on a Friday, forget hogs too!

Actually I think we'll see a testing of support tomorrow which will give us a chance to re-examine the market over the weekend and likely buy it going into next week.

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"Tom's Trades" for Friday, February 25, 2005
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A lot of folks have been asking me to put some Stock Index markets in the mix. I think I will probably do that and want to give you all a little heads up so you can begin getting yourself prepared. It will NOT be the S&P. I am presently testing 2 markets ... the Emini Russell 2000 and the $5 Dow.

Russell margin is about $3300 and the Dow about $1900. I'd suggest you go the exchange website and familiarize yourself with the specs. Russell trades on the CME and the Dow is CBOT. The week before I start with them I'll devote the Education Page to a discussion of both. This is just to give you some advance warning. I will probably trade them beginning Monday and start including them the week following.
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1: MARCH 30 YEAR T BOND
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USDH5 O-4-03 HI-4-14 LO-3-21 CL-3-24

I missed the first trade as I got started a little late this morning. I did try to buy 114-03 but couldn't get it. I hope you did. It looks like an easy 8 ticks or so as I think we would have gotten tossed at 114-11 most likely. Although the numbers weren't exactly text book, I sold 114-12 with a -15 stop. It was so clear to me we were done at -14. This was clearly bending the envelope a bit. I was stopped out on the little bounce back to -03 after we touched 114-01. Out at -03 for 9 ticks, $281.

I then sold 1 at 113-28 which didn't work so well. I got stopped out at 113-31 for a 3 tick loser. Last trade of the day was a sell at 113-30 ... caught a little break on the fill. We were exited this one at 113-23 by choice as EOD was upon us and the vol gas tank was dry. Added another 7 ticks, $218.

The very "back of my mind" goal for me is $500 a day in Bonds. I don't ... or at least I try not to ... let this influence my trades but it is sort of a yardstick for me. Today $499. Ya' think they'll let me go back and exit the loser 1 tick earlier? I don't think so either:)
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2: MARCH EURODOLLAR
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EDH5 O—.010 HI—.010 LO—.005 CL—.005

Still nothing ... TT numbers again tomorrow ... I wonder sometimes why I love this market so much.
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3: MARCH CANADIAN DOLLAR
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CDH5 O-29 HI-74 LO-005 CL-57

WOW! A big gap down to open the day. This eventually took us all the way back to numbersfrom 2 weeks' ago. I was really chomping at the bit to buy the failure at 8005. The S&R is there, no doubt, but not trade initiation strong so I passed. Wished I wouldn't have ... obviously.

TT numbers for tomorrow.
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4: APRIL GOLD
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GCJ5 O-8.00 HI-8.20 LOC-3.50 CL-5.70

TT/$10 channel for tomorrow. This was a cruel turn of events today. They got real close to selling territory but they yanked the rug out from under us before we got the numbers.
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5: MAY COTTON
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CTH5 O-.50 HI-.20 LO-.80 CL-.75

A good gap down at the open and a quick move to 48.00 ... our buy from TT over the weekend. The failure to press lower was good enough for me. I bought 48.10. We moved up rather smartly. When we punched above 49.00 and failed I brought my stop to 48.95 and got stopped out at 48.90 picking up 80- points, $400. Pick up guidance from yesterday's Update and Weekend TT for tomorrow.
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6: MAY COCOA
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COK5 O-31 HI-58 LO-04 CL-56

I sold 1618 and was stopped out at B/E. I then bought 1622 and was, again, stopped at B/E. I sold 1617 and was stopped out at 18 for a 1 tick loser. One mo' time, I bought 1623. When we poked our head above 1640 I rolled the stop to 37 and was stopped at 36 for $130. It never gave us an entry after that. We eventually moved up into the high 50's but I couldn't do anything about it. I'll sell a test of 1660 that fails tomorrow with a stop at 1663 highest. Other than that it's back to TT numbers.
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7: MARCH CORN
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CH5 O=2.05 HI=2.06 1/2 LO=2.04 1/2 CL=2.05 3/4

A virtual replay of yesterday. Look for a retest and failure to press lower at 2.04 1/2. I'll buy that with a very short stop at 2.03 3/4. Target is 2.09-2.10. We are still in scalp mode, don't get carried away thinking this is a major move beginning ... trust me, it isn't.
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8: MARCH WHEAT
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WH5 O=3.16 HI=3.17 1/2 LO=3.12 CL=3.12 3/4

Same focus from Tuesday's update for tomorrow. They showed us the 3.12 buy not in any way I could do anything with it.

Traders Helping Traders Daily Update for Thursday Feb. 24, 2005

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Erich's Update for Thursday, February 24, 2005
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Hot off the commodity presses to you!
Erich
http://www.supportandresistance.com

"Nothing can stop the man with the right mental attitude from achieving his goal." - Thomas Jefferson
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1: MAY CORN
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CK5 O-4 HI-4 1/4 LO-2 1/2 CL-3 3/4

Reality check today as trader's start second guessing yesterday's huge rally. The hesitation is good for us however as it clearly shows us the strength at 217.

I would like to see the market retreat a little more over the next day or two before entering again. Right now the timing just isn't right.
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2: MAY COTTON
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CTK5 O-20 HI-60 LO-75 CL-89

Should be no surprise to anyone that cotton took a bounce off the 4960 resistance today. Notice too how this level coincides with the 50% retracement.

Ideally I would like to see prices fall off a little more, maybe to 4790 - 4800 so that we could buy in again. If we see a bounce tomorrow I'll be ready with a buy above today's high - just in case.

*BUY May Cotton at 4966
*Stop 4924
*Approximate Risk Exposure: $210 per contract
*Profit Target: 5129
*Approximate Profit Potential: $815 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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3: MAY BEAN OIL
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BOK5 O-95 HI-97 LO-45 CL-91

Bean Oil proved to be the strongest member of the bean complex today as prices pretty much held their ground after yesterday's rally. The high close combined with yesterday's high gives us good parameters to build a trade for tomorrow, although I fully expect prices to head lower for the near future.

*BUY May Bean Oil at 2222
*Stop 2189
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2359
*Approximate Profit Potential: $822 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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4: ARPIL LIVE CATTLE
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LCJ5 O-60 HI-15 LO-35 CL-10

Got the extra hit on support we were looking for today and while prices might head higher tomorrow we've got a great line to sell below. Watch your RSI indicator for a bounce, which we could see come from the 8700 resistance. Also watch for support at 8400 - it's a pretty hefty line.

*SELL April Live Cattle at 8522
*Stop 8570
*Approximate Risk Exposure: $190 per contract
*Profit Target: 8355
*Approximate Profit Potential: $660 per contract
*RRR: 3:1
*Degree of Risk: Low to Moderate
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5: MAY COCOA
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CCK5 O-15 HI-40 LO-15 CL-27

I want to get more aggressive on buying cocoa, really I do, but the market just isn't giving us any decent setups. We've got a band of resistance at 1660 which is giving me some pause about buying from the current levels. I'm afraid I'll have to let it pass for tomorrow.
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6: MAY WHEAT
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WK5 O-21 HI-26 1/2 LO-18 3/4 CL-24 1/2

No real surprise that wheat prices stalled out today. Like the other grain markets I would prefer to see a testing of support before buying in again. I'd like to set up a "just in case" trade to buy the market on a break of Tuesday's resistance; however the resistance at 336 is keeping me out of the trade.

Could be a good day trade though.
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7: MARCH CANADIAN DOLLAR
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CDH5 O-15 HI-23 LO-30 CL-79

I thought I was being so smart buying the CD the day before the National Budget was announced - not! The CD handed me a bit of a spanking today as the market opened gap lower and took us out of the long trade. The only good thing is that we didn't lose too much money, but it's a small consolation.

I normally don't enter a trade the day after a losing trade; however we've got strong support on the low and a break below here could send rates lower still.

*SELL March Canadian Dollar at 8028
*Stop 8046
*Approximate Risk Exposure: $180 per contract
*Profit Target: 7965 (followed by 7920)
*Approximate Profit Potential: $630 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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8: MARCH SILVER
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SIH5 O-3 HI-6 LO-7.5 CL-4.3

Bit of a bearish day for silver as prices tested support, but seemed to remain solid. Tough to get a trade off in this market with the big ranges. Think I'll stand aside for tomorrow.
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9: DECEMBER EURODOLLAR
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EDZ5 O–115 HI–17 LO–065 CL–09

Big range followed yesterday's small range. Another tough market to get into given the amount of support near the lows. Expecting a rally tomorrow and a testing of resistance before we can sell again.
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10: WILD CARD - APRIL LEAN HOGS
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LHJ5 O-95 HI-50 LO-85 CL-42

Hogs rallied through resistance at the RSI trendline today. Good session to the upside as well as it appeared that the market rallied right from the open. Hogs don't normally rally for consecutive days without pausing, so we'll look for a hiccup and then plan our buy.
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"Tom's Trades" for Thursday, February 24, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O-3-20 HI-4-14 LO-3-17 CL-3-27

Today was a fun day in the Bonds. We began right after the open by buying 1 at 113-21. About 5 or 6 minutes later the Bonds exploded to the upside. The pullback from -09 stopped us out at 114-05 for 16 ticks, $500. It then started the climb again, topping out at 114-14. A clear failure brought on by -16 considerations. I pushed the envelope a bit but sold 1 at 114-12. We got thru 114-00 with a minimum of fuss and powered right down to ... all together now ... 113-17, a test of 113-16. I bailed at 113-19 for another 13 ticks, $406. Feeling somewhat on a roll, I bought 113-21 despite the late hour of the day. I exited purposely at 113-29 for another 8 ticks, $250. That makes it $1156 for the day.

We closed at 113-27, so we'll be all over 114-00 tomorrow. Buy a break above, sell a retest after the failure as it's heading south. We might go straight to 113-16 or gap down in which case we'll wait for a resolution there. May we do as well tomorrow. Be cautious and precise ... you know they like to come back after giving us a big winner and make us humble again.
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2: MARCH EURODOLLAR
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EDH5 O—005 HI—010 LO—002 CL—007

Still nothing ... TT numbers again tomorrow
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3: MARCH CANADIAN DOLLAR
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CDH5 O-15 HI-23 LO-30 CL-79

Sold 8096 ... a bit sloppy on the fill I thought. I exited at 8050 for $460.

We'll play the TT numbers tomorrow with 8080 added to the mix. Sell a failed test there. I will not buy until a break above 8125.
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4: APRIL GOLD
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GCJ5 O-4.00 HI-6.40 LO-2.80 CL-5.80

TT/$10 channel for tomorrow. They never gave us a a shot at anything today.
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5: MAY COTTON
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CTH5 O-.30 HI-.60 LO-.75 CL-.89

I was stopped out at the open at 49.20 banking 120 ticks or $600. A bit later I sold one at 48.90 and was stopped out at 49.00 for -10. I bought 49.10 and was stopped out at 49.40 picking up another $150.

I will follow the guidance in yesterday's Update for tomorrow.
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6: MAY COCOA
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COK5 O-16 HI-40 LO-15 CL-27

I bought 1622 and was stopped out at B/E. Same numbers from yesterday's update are in play for tomorrow.
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7: MARCH CORN
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CH5 O=2.06 1/2 HI=2.06 1/2 LO=2.04 1/2 CL=2.05 3/4

Barely a 2 cent range for the day andd no where near our numbers. We watched. Same Update numbers for tomorrow.
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8: MARCH WHEAT
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WH5 O=3.12 1/2 HI=3.18 LO=3.10 1/2 CL=3.16

We bought 3.12 1/2 and were stopped out at 3.11 even on a 3.11 1/4 stop. A $75 loser. Came right back and bought another at 3.12 1/2. This one was stopped at 3.16 1/2 for 4 cents, $200

I'm going to stay with yesterday's program again tomorrow. Above 3.12 I'm feelign a little like a fish out of water so I'll just watch unless they give me 3.12 to play.