Wednesday, March 09, 2005

Traders Helping Traders Daily Update for Tuesday March 8th 2005

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Market Update for Tuesday, March 8, 2005
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Subscribers got these on Monday evening, but alas, Test Drivers get 'em after the fact. To get yours fresh, hot and steamy, go to
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"One half of knowing what you want is knowing what you must give up before you get it." - Sidney Howard
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1: MAY CORN
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CK5 O=7 1/4 HI=7 1/2 LO=2 3/4 CL=3 1/4

Corn prices fell through the 217 support, stopping us out of last week's position (if you took one). The market obviously didn't do as we had hoped and now we're on the sidelines waiting for support. I would like to see support occur at 210 - 211. If we break through here then we'll have to reassess our take on this market.
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2: MAY COTTON
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CTK5 O=30 HI=50 LO=40 CL=44

Cotton gapped our entry this morning putting the trade on hold for opening range. After opening range expired the market was still trading above our entry so I scrubbed the trade for the day. Turns out it was a good decision as the market did nothing but bounce around all day.

RSI has given us a serious breakout to the downside, which might indicate a 50% retracement is on the way. While I normally don't consider countertrend trades I might look at this one for tomorrow. NOTE: Countertrend trades are more risky than trend trades. Be certain you can afford the loss if you decide to take this trade!

*SELL May Cotton at 5029
*Stop 5066
*Approximate Risk Exposure: $185 per contract
*Profit Target: 4806
*Approximate Profit Potential: $1115 per contract
*RRR: 6:1
*Degree of Risk: HIGH
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3: MAY BEAN OIL
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BOK5 O=30 HI=32 LO=82 CL=97

Bean Oil retreated from resisance today. The range of the last week almost makes me feel like we've got the market cornered; however I'm not certain I want to try and sell the market at this time. If you wanted, you could look to sell below today's low and cover above the close. Risk would be small enough to take profit at the 2180 support...but personally I think I'll just run with the buy trade for tomorrow.

*BUY May Bean Oil at 2357
*Stop 2329
*Approximate Risk Exposure: $168 per contract
*Profit Target: 2459
*Approximate Profit Potential: $612 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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4: ARPIL LIVE CATTLE
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LCJ5 O=30 HI=50 LO=75 CL=90

Bit of a "nail biter" day in cattle and while prices fell off nicely from the open, they never got close enough to find our sell order. I might run the weekend trade for tomorrow again, but if we still don't see a good move to the downside, I might have to pull the trade.
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5: MAY COCOA
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CCK5 O=26 HI=82 LO=25 CL=76

Cocoa pushed slight higher today. Still hasn't quite reaced the 1800 resistance level, but I think we'll see a reaction when it does. I might consider a countertrend trade when we do see a reaction, but I'll have to see what the market gives us. Don't feel much like getting whipped, if you know what I mean.
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6: MAY WHEAT
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WK5 O=37 HI=37 1/2 LO=30 1/4 CL=32 1/4

Wheat moved slightly lower today and never got close to filling our buy order. RSI shows the market at a test point, so I would very much like to see a bounce tomorrow, so I'll run the weekend trade for one more day. There's a big report out Thursday, so if we don't see a decent move to the upside tomorrow I might put the trade on hold.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=19 HI=54 LO=03 CL=41

A "perfect" day for support and resistance technicians in the CD today. While the market never found our entry order, it did behave just like it was supposed to and kept us out of a potentially bad trade. Not sure what to expect tomorrow. I almost think we'll see the pennant formation hold and see rates decline - but that's just an opinion. I'll be running the weekend buy again, and let the market decide where it wants to go.
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8: MARCH SILVER
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SIH5 O=9 HI=6.5 LO=4 CL=9.5

I've got some bad data for silver, but it looks as though the market didn't trade high enough to find our order today. Rather the 746.5 high occurred during the overnight session, before the day session opened for trading. Either way I'm not as comfortable with this trade as I was at the beginning and think I'll just watch silver tomorrow.
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9: DECEMBER EURODOLLAR
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EDZ5 O=.005 HI=.015 LO=.98 CL=.985

The Eurodollar might have told us today that it is finished pulling back and might continue with the trend again tomorrow. Notice how we're still hovering around the 96.00 resistance area. We've got some good numbers here however. I really like this trade for Tuesday.

*SELL December Eurodollar at 95.9725
*Stop 96.025
*Approximate Risk Exposure: $135 per contract
*Profit Target: 95.785
*Approximate Profit Potential: $465 per contract
*RRR: 3 1/2:1
*Degree of Risk: Low to Moderate
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Tuesday, March 8, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=3-05 HI=3-14 LO=3-01 CL=3-10

Bought 1 at 113-03 and was stopped out at B/E. Did it again. Made it to -13 and was stopped out at 11, picking up 8 ticks, $250. That was it for the day. With today's close at 113-10 we will be looking for action at 113-16 or 113-00 for tomorrow.
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2: MARCH EURODOLLAR
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EDH5 O=.002 HI=.005 LO=.002 CL=.002

What can I say? It continues to resist all stimuli and therefore has me thinking seriously about an exit. My reasoning for this is quite profound ... if it can't go down, it's gotta go up. Pretty deep, huh? This isn't unprecedented in the Euro, let's just call unusual. let's exit tomorrow as best we can and regroup.
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3: MARCH CANADIAN DOLLAR
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CDH5 O=10 HI=43 LO=96 CL=33

We sold 8096 ... the low of the day as it turned out, ouch. We were stopped out at 8108 for a loss of $120. I then bought 1 at 8128. As we went thru 8130 I rolled to B/E. At 43 I rolled to 8137 and was stopped out at 36 recouping $80 of our loss. Same numbers from TT for tomorrow.
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4: MARCH MINI RUSSELL 2000
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ERTH5 O=5.90 HI=8.40 LO=3.10 CL=4.00

I bought 645.50. I bailed on the trade at 646.60 for $110. I didn't like the looks of things and it was jumping around pretty good ... not a comfortable feeling at all. I bought 645.60 a bit later. As we made our way up to 648.20 I brought the stop to 647.70 and was stopped at 647.50 for another $190. I bought 645.60 again, did my rolls in harmony with RRR and was stopped out at 647.60 adding $200 to the pot.

To tell you the truth, it was a bit nerve wracking. Reminded me a little of my Emini daytrading days. By following the TT guidance we might well have picked up another $200 or so on the sell later in the day. My nerves were shot so I packed it in. Same numbers for tomorrow from TT.
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5: MARCH $5 DOW
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EYMH5 O=970 HI=983 LO=919 CL=930

Nothing here today. I'm an observer again. I'm back on the same TT numbers once again for tomorrow.
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6: APRIL GOLD
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GCJ5 O=4.40 HI=6.30 LO=3.30 CL=5.80

Nothing for us today. Patience is the guidance. $10 Channel tomorrow. Be sure of the confirm and let it get out of the decision making zone before going after anything.
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7: MAY COTTON
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CTK5 O=.30 HI=.50 LO=.40 CL=.44

A big break south near the close. Right off that 5140 mark we discussed in TT. I will sell a break below 50.00 tomorrow but that's it. Stop is short at 50.11. Got to be at B/E by 4985. the target is 48.00 with rolls at 49.00 and 48.50. At all other times keep the stop trailing back no more than 25-30 points.
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8: MAY COCOA
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COK5 O=26 HI=82 LO=25 CL=76

1720 line is shaping up to give us enough strength to trade. Not quite there yet but it's working on it. In fact, let's sell a break below 1720 with a stop at 1723. Let's look at 1660 as a target and keep the periodic RRR under tight control. Limit risk to no more than $120-$150 after rolling to B/E at 1693.
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9: MAY CORN
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CK5 O=2.17 1/4 HI=2.17 1/2 LO=2.12 3/4 CL=2.13 1/4

I sold 2.16 3/4 in the opening 5 minutes. I decided to keep the trade open into tomorrow. After the close I moved my stop to 2.13 1/4 and also entered an order to exit at 2.12 1/4. Remember, our target on the sell was at 2.11. We broke 2.13 right near the close and then hit 2.12 1/4 barely 15 minutes into the night session. It bounced about a cent from there. With the target at 2.11 I only stand to make another $62 from 2.12 1/4 and with the stop at 2.13 1/4 I'd have $50 at risk ... I'm in about a 1:1 proposition right now. I think having the 2.12 1/4 working makes some sense.

If we get either order hit and are out for tomorrow's RTH open, I'll buy a break above 2.12 or I'll sell a break below 2.11. Both have some strength, 2.11 maybe a tad more. Stop on the buy is 2.10 3/4 for about a cent and a half risk; stop on the sell is 2.11 3/4 for risk of about a penny. Get the to B/E at 2.10 1/4.
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10: MARCH WHEAT
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WK5 O=3.37 HI=3.37 1/2 LO=3.30 1/4 CL=3.32 1/4

I tried to get Wheat sold. The best I could do was 3.35 1/2 or a quarter. I let it go. It came back pretty strongly from 3.32 and we would have most likely gotten stopped out at 3.34 something, so we didn't miss much by passing on it.

For tomorrow, I will play either way off 3.30 ... buy a test/failure and sell a break below. I'll also buy a break above 3.34. Stops on either are back a .01 1/4. Targets are 3.50 and 3.20 respectively.
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