Wednesday, March 02, 2005

Traders Helping Traders Daily Update for Tuesday, March 1, 2005

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Erich's Update for Tuesday, March 1, 2005
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Subscribers got these Monday evening, Test Drivers get it the day after. To get yours hot off the presses, go to http://www.supportandresistance.com/subscribe.html
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1: MAY CORN
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CK5 O-4 3/4 HI-5 LO-9 1/2 CL-2 3/4

Corn took a little bounce off the 225 resistance today but managed to close the day fairly strong. There's a bundle of resistance up here and I'd dearly love to see the market either test support or stall just a little bit longer before we look at buying. C'mon corn, show us what you really want to do and then we'll jump all over you!
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2: MAY COTTON
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CTK5 O-70 HI-35 LO-55 CL-27

Mighty decent of cotton to find our first profit target today allowing us to pick up $815 profit per contract you exited. If you're still long this market it might be a good idea to bring up the remaining exit stops at bit. At the very least you want to put them under today's low; however we are at the 62% retracement line, so I wouldn't be surprised to see a bit of a reversal tomorrow.
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3: MAY BEAN OIL
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BOK5 O-15 HI-47 LO-02 CL-35

Another stellar day for our bean oil position as the market continued higher on a small gap, never threatening our stops - I love it when that happens!

We're almost to the first profit target at 2359, which also happens to be the 50% retracement level. I'd be inclined to bring exit stops up to at least the 2326 intraday support to protect as much profit as possible tomorrow. Since this is the 50% retracement we might expect to see a reaction here.
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4: ARPIL LIVE CATTLE
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LCJ5 O-20 HI-95 LO-95 CL-05

Cattle really tried to push higher today, but the resistance at 8700 knocked them back down. RSI is still at a test point and was hoping to see a hook by now. The safe trade is to stick with the weekend plan and wait for a break below the 8530 support before shorting. If you wanted to be more aggressive however you could consider shorting below today's low.

*SELL April Live Cattle at 8577
*Stop 8622
*Approximate Risk Exposure: $180 per contract
*Profit Target: 8402
*Approximate Profit Potential: $700 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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5: MAY COCOA
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CCK5 O-65 HI-46 LO-65 CL-30

Few markets can make a fool out of you like cocoa can... and that's exactly what happened today. What the heck happened to the resistance at 1690? The market blew through it like it wasn't even there. Yeah, right. Thanks a lot.

I'm inclined to sit out tomorrow because of today's big range. Given the quick ascent in prices I think we might see a countertrend trading opportunity open up tomorrow or the next day.
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6: MAY WHEAT
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WK5 O-38 H-6 1/2 L-33 CL-5 1/2

Wheat skyrocketed today as well, right through the 337 resistance. In reality we would have had a hard time getting the entry we wanted given this morning's opening gap. Looking for a reaction tomorrow at 353 before trying to get in again.
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7: JUNE CANADIAN DOLLAR
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CDM5 O-20 HI-55 LO-12 CL-17

The Canadian Dollar rallied this morning on a gap (which isn't that unusual on a Monday) but took a bit of a bounce off the 8150 resistance and close reasonably low. This makes me think we could see a reaction to the resistance continue tomorrow as well. While the more aggressive among you might consider selling below today's low, I think I'll wait for a confirmation.

Since prices are testing the trendline I will consider putting in a buy above today's high and take the market long if we see a rally tomorrow.

*BUY June Canadian Dollar at 8166
*Stop 8147
*Approximate Risk Exposure: $190 per contract
*Profit Target: 8257
*Approximate Profit Potential: $910 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate
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8: MARCH SILVER
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SIH5 O-8 HI-2 LO-5 CL-5.9

Not a good day in silver as prices promptly stalled after filling our order. We got stopped out for a small loss about an hour later as prices broke the 734 support. Only good thing is that we were able to keep the loss small, which I suppose is the next best thing.
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9: DECEMBER EURODOLLAR
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EDZ5 O-.03 HI-.035 LO-.955 CL-.975

The Eurodollar really has some momentum behind it as prices fell right through the 9600 support line. I was hoping to see a reaction here so we could try to get on board this market, but it didn't happen. We've got a big rounded top formation now. Maybe that will be the impetus rates need to stall. We'll see.
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10: WILD CARD - APRIL LEAN HOGS
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LHJ5 O-35 HI-65 LO-92 CL-22

I'm a little choked with hogs today as the market ranged barely enough to whipsaw our position. I was/am pretty confident we were right about this trade; however I think I'll give them the day off tomorrow as I'd hate to get whipsawed two days in a row.
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"Tom's Trades" for Tuesday, March 1, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O-3-10 HI-3-12 LO-2-01 CL-2-11

A little gap up at the open, a failure and then a run up to 113-12. It wasn't quite high enough to let us sell there. I had to wait until the break of 113-00. Next week int he education page I'll suggest some ways to combat this situation. Short answer revolves around the quarter points which are -08 and -24. I bet most of you are smart and saavy enough to figure out what I'm going to say before I write it all out.

I digress ... I sold 112-29. I rode it to -12, rolled the stop to -15 and poof ... we were gone banking 14 points. We then sold 112-15, rode it to -01, rolled the stop to -03 and exited there for another 12 ticks. I was done on that note as the final hour was looming large. We pocketed 26 on the day, $812. A nice first day intro to June.

With the close at 112-11 we will be ready to go tomorrow at either 112-00 or 112-16. We'll do buys or sells according to what path the market shows us.
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2: MARCH EURODOLLAR
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EDH5 O-.997 HI-.997 LO-.987 CL-.990

Does drying paint or growing grass make a sound? I swear I can hear it. We continue short from 97.000.
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3: MARCH CANADIAN DOLLAR
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CDH5 O-11 HI-46 LO-00 CL-08

Was that a test of 8100 or what ... slide, boom gap higher. Geez. If I could have gotten in there at 8110 or lower I would have. They wouldn't hear of it so I just let it go for the day. TT numbers again for tomorrow.
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4: MARCH MINI RUSSELL 2000
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ERTH5 O-7.70 HI-8.90 LO-8.70 CL-4.70

Remember this market trades from 5:00 pm CST until 3:15 and reopens at 3:30 pm and goes to 4:30 pm which that days session. We then open the next session at 5pm. I'm going to trade this staring in the morning to parallel the open outcry Russell RTH session. That session opens at 8:30 am and closes at 3:15 pm. I'm trading the electronic but will do so only in parallel hours to the RTH. I WILL work stops and profit taking limits in the other hours of the session. I will NOT initiate trades there. If you don't catch what I mean, email me. The O, H, L, C prices quoted above are for the entire electronic session.

We rose to 638.50 and failed. I sold 637.50. I exited at 630.70. We were pretty much right on the traget and I saw no reason to push the envelope on our good fortune. Out with 6.80 ticks, $680. I shopuld have bought it on the break back above 630.00 but didn't. Maybe a little too cautious on our first day.

For tomorrow we'll buy a retest and failure to go lower at 630.00. Use the numbers from TT for guidance on the way back up. We'll also repeat the TT numbers if we can get back above 637.90.
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5: MARCH $5 DOW
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EYMH5 O-845 HI-864 LO-731 CL-778

As with the Russell above, we will confine our trading moves to the RTH of the big contract. In this case that will be 7:20 am to 3:15 pm daily CST. The O, H, L, C prices quoted above are for the entire electronic session.

We sold 10835, I rolled the stop exactly as described in TT. I'm out at 10819 for $80. I left a lot on the table today. In part to a cautious start and in part because I was very busy with a couple of other trades and wasn't comfortable with the full management plate.

Tomorrow we'll sell a retest of 10840/50, we'll buy a test of 10750 after a failure to carry lower and as it starts back north. I'll also sell the break below 10750 but NOT buy the break above 10850.
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6: APRIL GOLD
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GCJ5 O-8.00 HI-8.20 LO-3.50 CL-5.70

I sold 438.40 on the second spike up. I bailed at 437.00 grabbing $140. $10 Channel for tomorrow.
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7: MAY COTTON
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CTK5 O-.70 HI-.35 LO-.55 CL-.27

All I could do was watch. Tomorrow I will buy a break above 51.45 with a stop at 51.37 for risk of $40. Snug the stop up within 15 points or so at 52.00. The rest of the time keep trailing a stop back no more than 25 points. Do not forget about the end of runs rules.
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8: MAY COCOA
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COK5 O-65 HI-46 LO-65 CL-30

My hands are tied. Nice, strong move today. I can't do anything up here. I'll buy a retest of 1660/70 tomorrow with a stop at 1663.
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9: MAY CORN
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CK5 O-2.24 3/4 HI-2.25 LO-2.19 1/2 CL-2.22 3/4

Pretty good failure at the 2.26 resistance. Think any brokers were on the phone today touting Corn? I'll sell a retest at 2.26 as it fails and heads lower. I'll also sell a break below 2.22 or buy a failed retest there as it heads higher.
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10: MARCH WHEAT
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WK5 O-3.38 HI-3.461/2 LO-3.33 CL-3.45 1/4

Another powerful day up. I'm still a watcher.
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