Monday, March 14, 2005

Traders Helping Traders Daily Update for Friday 3-11-05

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Erich's Update for Friday, March 11, 2005
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Hot off the commodity presses to you! Well, ok, not quite. This is the Test Drive version, which is delivered after the fact. The subscribers got theirs on Thursday evening, before the markets.
Click here to get yours! http://www.supportandresistance.com/subscribe.html
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1: MAY CORN
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CK5 O=5 1/2 HI=0 1/2 LO=4 1/2 CL=0

Big day in corn as the WASDE report caused the market to rally hard. A very predictable session overall... just like we like them. You can bring exit stops up to breakeven or just below the 217 support for tomorrow's session. First profit target is resistance at 233 1/4.
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2: MAY COTTON
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CTK5 O=30 HI=20 LO=65 CL=65

We had the right idea in cotton, but today's ranges were much like yesterday's and too difficult to trade. Notice how prices bounced off the 5165 - 5180 support from the other day? Almost made me wish I was a day trader. ;-)

Nothing here for Friday.
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3: MAY BEAN OIL
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BOK5 O=68 HI=78 LO=31 CL=66

If you left your stops be today, you would have rode out the run down...but just barely. Isn't it great when support and resistance work like they're supposed to? If you brought stops up yesterday then you would have been stopped out at breakeven, or something close to it. Hoping to see Bean Oil catch fire tomorrow and head higher. It's the only part of the grain complex that seemed to be lagging today.
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4: ARPIL LIVE CATTLE
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LCJ5 O=50 HI=55 LO=60 CL=70

No surprise here as cattle "adjusted" themselves a bit after yesterday's strong rally. It's not uncommon to see traders second guess their position after a strong day and you should learn to expect it. It will help you decide whether you want to try and ride out the adjustment or capture as much profit as possible before the adjustment. Nothing new here tomorrow.
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5: MAY COCOA
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CCK5 O=75 HI=75 LO=35 CL=53

Interesting day in cocoa as prices continued to test the 1775 resistance. The market did close lower, but not as low as yesterday's session. I'm not crazy about running a cocoa trade on a Friday, especially a counter trend trade, but here it goes (maybe I am crazy!)

*SELL May Cocoa at 1724
*Stop 1746
*Approximate Risk Exposure: $220 per contract
*Profit Target: 1646
*Approximate Profit Potential: $780 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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6: MAY WHEAT
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WK5 O=39 HI=48 1/2 LO=34 CL=48

Wheat mirrored the other grains today and headed higher after reaffirming support. If you brought stops up you would have been stopped out this morning, but if you left them "as is" you managed to ride out the pullback. Don't worry if you did get stopped out though. We'll have another kick at this market, but it might be best to wait until next week before starting a new position.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=33 HI=44 LO=97 CL=17

No real surprise here either, except maybe at the range. I would have thought we would see something a little more aggressive in terms of a pullback today, but it didn't happen. Ideally we will see rates decline to the 8250 line before recovering. If we get that I'll be all over buying the market...but not tomorrow.
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8: MAY SILVER
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SIK5 O=4.5 HI=7 LO=9.5 CL=2.7

I'm quite pleased with how we've been calling silver's moves lately; however the large ranges are making it nearly impossible to participate, at least from a position trader's point of view. Looking for prices to continue to decline tomorrow and maybe find support around 740.
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9: DECEMBER EURODOLLAR
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EDZ5 O=.90 HI=.945 LO=.885 CL=.915

If you didn't sell the ED the other day you would have gotten another crack at the market today as prices did the ole yo-yo. Bring exit stops to above today's high. I'm not terribly impressed with today's session and if we see a reversal we might as well leave before the weekend.
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Friday, March 11, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=0-15 HI=1-16 LO=0-14 CL=1-12

A nice day ... for the most part. We started by buying 110-20. It just sailed up to 111-05. I rolled to -03 and was stopped right there for 15 ticks, $468. I bought 111-03 and was stopped out at B/E. I then sold 110-31 on a fortuitous bounce. I elected to reverse here buying 2 at 110-22. That left me long 1 and the other closed out the sell at -22 for another 9 ticks. We were stopped out of this trade at 110-31 bagging another 11 ticks. We failed at this level and made a run back to 22. I took a stab at buying 22 again but they wouldn't give it up. I bought one at 111-03 and bailed at 111-09 for 6 as we were well inside the final hour. Total take for the day was 41 ticks, $1281.

The close at 111-12 sets us up on 111-16 or 111-00 as the initial focus for tomorrow.
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2: JUNE EURODOLLAR
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EDM5 O=.535 HI=.550 LO=.525 CL=.545

Hit the replay button, kids ... As you'd expect, the June chart is not quite as flat lined as March has been. Pretty much the same idea, though at lower levels. 96.535 is the obvious level to take a short trade as it breaks below that level. It doesn't quite have the strength I'd like to see so we'll watch another day as it pumps iron.
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3: MARCH CANADIAN DOLLAR
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CDH5 O=33 HI=44 LO=97 CL=17

I'm willing to take a flyer at a retest of the double 8344 double top. Sell a retest of anything above 8340 as it breaks back south. Set the stop at 8347. If it breaks 45 we're wrong and we want to be gone. Get the trade to B/E about 8330. Roll tight at Thursday's close and low. When this does break from here history tells us we will likely see a return to at least 8260 and then 8200. We, of course, understand we can't rely on that so we'll manage our way down to it in increments defined by respecting appropriate S&R levels and monitoring our RRR.
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4: MARCH MINI RUSSELL 2000
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ERTH5 O-0.60 HI-2.50 LO-4.20 CL-7.70

That worked out pretty good ... the expansion detailed yesterday. We sold 627.00. We hit 624.20 and I rolled my stop to 624.90 on the observation that 625 to 625.50 is a "what's most likely" range. Out with $280. On that same observation I bought 625.80. That allowed me to jump the gun a little. I should have picked you up with a buy on the break above 627.20. This leg ran right up one of our "most likely" numbers from yesterday ... 631.70 ... actually it went to 632. 40.

Since we were already long it had no additional consequence other than becoming the target for the long trade in which we were involved. The failure there was pretty much right on schedule ... out at 631.60 for another contribution to the decorating fund of $580. I actually would have been justified in reversing the trade there and had I done so we would have picked up another couple of hundred. I did sell the break of 627.20 at 627.00.

This leg took us directly to 625.40 and I exited as fast as my old fingers could manage ... out at 625.90 for another small gain of $110. Huffing and puffing out of breath I closed up shop for the day with a total of $970. Add 625.00/625.50 to the mix from yesterday and you are good to go for tomorrow.
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5: MARCH $5 DOW
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EYMH5 O=809 HI=872 LO=774 CL=844

We bought 10805. By 10810 I was at B/E, at 10836 I rolled to 10827 and was stopped at 26 for $105. We again dipped below 10800 and I sold 1 at 10795 and had the stop at 10787 causing us the get dumped at 10790 for $25. We then started back up. This time we bought 1 at 10805. We ran it up to 10870 so i moved the stop to 10857 and was tossed out of the ring at 10850 for $225. 10800 is the play for tomorrow too. Add 10850 to the roster. Take 'em either way ... sell the break; buy the failed retest.
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6: APRIL GOLD
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GCJ5 O=1.30 HI=3.70 LO=1.20 CL=3.40

Bought 441.90, stopped out at B/E ... I wanted to bail earlier but couldn't take the time due to involvement with other trades. We got anothe rshot at a buy. I didn't take it only because my plate was full. Anyone in it shouls have managed their way out with a small $110-140 profit. $10 channel again tomorrow.
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7: MAY COTTON
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CTK5 O=.30 HI=.20 LO=.65 CL=.65

We bought 52.08. As we went thru 5280 I rolled to 5277 and was stopped at 75 picking up 67 ticks, $335. We'll play 52.00 again tomorrow.
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8: MAY COCOA
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COK5 O=75 HI=75 LO=35 CL=53

Nothing here for us today. We'll again focus on 1720 tomorrow.
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9: MAY CORN
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CK5 O=2.15 1/2 HI=2.20 1/2 LO=2.14 1/2 CL=2.20

I knew I should have bought again yesterday. If you did and held it you made out nicely today. A steady climb thruout the day. I bought the break above 2.18 at 2.18. I have the stop at B/E now and am holding for the morning. Be out by the end of day if your in it. No holding over the weekend from here on out. If you didn't get in then refer back to TT and Monday for the guidance I'll be pursuing.
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10: MARCH WHEAT
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WK5 O=3.39 HI=3.48 1/2 LO=3.34 CL=3.48

I started the day selling the 3.38 break at 3.37 3/4. When we hit 3.34 I rolled to 3.35 1/4 and was stopped out at 3.36 for 1 3/4 cents, $87. I bought 3.38 1/2, stopped at 3.36 1/2 on my 3/4 stop for a loss of $100. I bought 3.38 1/2 again. They came within a quarter cent off knocking me out. When we broke 3.40 I moved the stop to 3.39 3/4 ... stopped at the half for a penny. I bought again; at 3.38 3/4 this time. This time we got booted at 3.42 1/2 pickinf up 3 3/4 cents, $187. That ended the day.

Day trade only tomorrow ... no weekend take out. Same TT numbers. Probably won't see it but maybe ... could be some profit taking tomorrow. Be careful and protect anything you got.
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