Traders Helping Traders Update for Thursday, March 17, 2005
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Erich's Update for Thursday, March 17, 2005
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1: MAY CORN
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CK5 O=7 1/4 HI=9 3/4 LO=5 1/4 CL=5 1/2
Got our hesitation in corn today as the market traded a little lower. I'd like to see at least one more lower session tomorrow before we look at buying the market again. I know it might be asking a lot, but we'll see what the market gives us.
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2: MAY COTTON
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CTK5 O=60 HI=20 LO=00 CL=78
Cotton traded higher again today. This market is determined to make a liar out of me, but this is the exact same scenario I encountered all those years ago when I bought cotton April 1 only to see it fall off.
Watching and waiting for a reaction at 5500.
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3: MAY BEAN OIL
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BOK5 O=23 HI=52 LO=97 CL=15
Bean Oil continued to tease us today as prices tested support but failed to head any lower. This market is due for a pullback of sorts and I think we might see it tomorrow.
As you know I'm not a fan of selling into an uptrend however if we see another break of the 2400 support I think we can see a 38% retracement coming.
*SELL May Bean Oil at 2389
*Stop 2416
*Approximate Risk Exposure: $162 per contract
*Profit Target: 2302
*Approximate Profit Potential: $522 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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4: ARPIL LIVE CATTLE
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LCJ5 O=.825 HI=.95 LO=.60 CL=.675
Cattle didn't find our entry order today, but it did fall off to test support before rallying again. Things continue to look good for the bulls, but I'll throw a sell order into the mix too in case we see a break below support.
*BUY April Live Cattle at 9012
*Stop 8967
*Approximate Risk Exposure: $180 per contract
*Profit Target: 9150
*Approximate Profit Potential: $550 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
OR
*SELL April Live Cattle at 8847
*Stop 8892
*Approximate Risk Exposure: $180 per contract
*Profit Target: 8670
*Approximate Profit Potential: $710 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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5: MAY COCOA
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CCK5 O=85 HI=35 LO=73 CL=29
Nice rally off support today as cocoa had no trouble finding our entry order. Prices rallied high enough that we can bring our exit stops to break even for tomorrow and give us a little breathing room.
It's the early part of these trades that are the most risky. Keep your fingers crossed that we don't see too much of a move to the downside.
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6: MAY WHEAT
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WK5 O=65 HI=68 1/2 LO=60 1/2 CL=61
Got the reversal we were looking for as wheat bounced off the 369 resistance. I'm going to be picky and look for a little profit taking action to drive the market lower for at least one more session, then we'll get more serious about buying again.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=18 HI=40 LO=03 CL=14
The CD continues to play with the 8340 resistance line. I might look at buying the market long tomorrow if we see a break above the 8356 high from the other day. If you wanted to be more aggressive on this trade buy a break of the 8345 area.
*BUY June Canadian Dollar at 8357
*Stop 8339
*Approximate Risk Exposure: $180 per contract
*Profit Target: 8444
*Approximate Profit Potential: $870 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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8: MAY SILVER
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SIK5 O=0 HI=8.5 LO=9 CL=5.2
Silver's RSI is showing us a bit of a bounce off the trendline and 50% level today, which makes me think we could see the market rally tomorrow. Picking an entry was tough, but I stuck with the resistance at 753 as an entry line, covering the trade on today's high. First profit target is resistance at 786.
*BUY May Silver at 754.5
*Stop 748.5
*Approximate Risk Exposure: $300 per contract
*Profit Target: 785.5
*Approximate Profit Potential: $1550 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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9: DECEMBER EURODOLLAR
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EDZ5 O=.835 HI=.90 LO=.825 CL=.84
A triple tap on support today gives us a very solid line from which to sell this market further. The low closing price would suggest that the ED favours heading lower to going higher. Next profit target is 100% retracement at 9566, but don't expect it to stop there.
*SELL December Eurodollar at 95.81
*Stop 95.8525
*Approximate Risk Exposure: $106 per contract
*Profit Target: 95.66
*Approximate Profit Potential: $375 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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10: WILD CARD - MAY BEAN MEAL
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SMK5 O=1.5 HI=5 LO=7.5 CL=7.9
The whole grain complex is overbought, but none more so that soybeans. You could do this same trade with the parent soybean contact; however the numbers are a little more precise with Bean Meal which is why I chose it.
This is a countertrend trade and therefore is much more risky than waiting for support before rebuying; however prices seem ripe for a retracement.
*SELL May Bean Meal at 196.9
*Stop 199.6
*Approximate Risk Exposure: $270 per contract
*Profit Target: 185.6
*Approximate Profit Potential: $1130 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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"Tom's Trades" for Thursday, March 16, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=0-23 HI=1-14 LO=0-11 CL=0-17
WE began the day with a bit of a gap up, then an swift retrace that failed. Yumm me. I bought 110-20 and was stopped at B/E. Bought 1 at -21 and we were off to the races. We were stopped out at 111-03 for 13 ticks, $406. We then bought again at 111-03. This trade was stopped out at 111-11 for another 8 ticks, $250. Just a couple of ticks higher and I would have reversed and we REALLY would have had something. It didn't, we didn't. All I could do was sit and watch that next leg down unfold without me. DRAT! Then again, $656 is not a bad day's wage.
The close at 110-25 sets us up to trade 111-00 or 110-16 tomorrow. I'm looking forward to it.
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2: JUNE EURODOLLAR
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EDM5 O=.485 HI=.520 LO=.485 CL=.495
There was that little bounce I have been anticipating. It failed as I also suspected would be the case. They must have misread the Daily Update yesterday:)
Hopefully, you jumped in their today above 96.510 as we closed again below 96.50. Get used to the sounds and thrills of paint drying ... we might be in this one for a while.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=18 HI=40 LO=03 CL=14
Not quite as eventful and fun as was yesterday, but still, I'll be happy to take it. We sold 1 at 8336 and bailed at 8304 for $320 and simultaneously reversed. Heck, why not they did it 3 times yesterday, right. We bought 1 at 8305. I bailed on this one at 8328 but wasn't quick enough to get it sold again. I sold 8329, it moved down just as before but not low enough as it pulled up at 8310. I had the stop rolled to 21 and they zapped it back up in 1 lousy tick to 8320 and stopped us out at 8322. We made $70 more. End of day was approaching so we checked out ... $390 snug in our pocket.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=9.10 HI=1.90 LO=2.70 CL=5.80
The trading window opened with the market right on our 629 guidance. I sold 629.10 and exited at 627.20 for $190. We then sold 628.80 and out at 625.70 picking up $310. That was it for the day a tidy $500.
For tomorrow it's all the same numbers from yesterday PLUS we'll sell a break below 626 or buy a failed test there. We still have to be on our toes managing by periodic RRR. We now have a decent array of identified levels we can begin to use those levels above and below as targets and roll points as appropriate.
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5: JUNE $5 DOW
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EYMM5 O=775 HI=677 LO=660 CL=675
When our trading window opened we were in the midst of a very significant failure that began about an hour earlier. I just hopped on best I could selling one at 10766. It tried real hard for about a half an hour to take out 10700 and couldn't. All I needed to see. I bailed at 10717 picking up 49 ticks, $245. There was a LOT left in the move as we saw later. I just ran out of numbers to focus on. We're still learning things about this market and how to capitalize on our methods as they specifically relate to the dynamics of this market. Today I learned a bunch.
For tomorrow we keep our TT numbers anf those from yesterday in play. We'll also add to the mix by selling a break below 10650 or buying a retest there that fails to go lower. Also add a sell of a retest of 10700 that fails to go higher or buy a break above it. Same deal as with the Russell ... start using the wider array of numbers we enjoy now to set targets and perform rolls at the appropriate higher and lower levels.
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6: APRIL GOLD
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GCJ5 O=2.80 HI=4.70 LO=2.20 CL=4.20
Nothing here today. $10 channel for tomorrow.
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7: MAY COTTON
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CTK5 O=.60 HI=.20 LO=.00 CL=.78
It was, of course, the break of the double top. What can ya' do:) Tomorrow I'll sell a break back below 53.60 with the same 53.67 stop from yesterday.
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8: MAY COCOA
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COK5 O=85 HI=35 LO=73 CL=29
Not even close ... more power is what we got. I'm back on the sidelines here.
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9: MAY CORN
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CK5 O=2.27 1/4 HI=2.29 3/4 LO=2.25 1/4 CL=2.25 1/2
I bought 1 at 2.26 1/4. We made it up to the high of the day at 2.29 3/4 and failed. I'm out at 2.28 3/4 as I was protecting 2.29 with a 2.28 3/4 stop. Out with 2 1/2 cents $125. It was a pretty spectacular failure too ...we settled at 2.25 1/2. Tomorrow's plays are the TT numbers again ... 2.25/.26.
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10: MARCH WHEAT
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WK5 O=3.65 HI=3.68 1/2 LO=3.60 1/2 CL=3.61
My hands are tied at the moment ... got no structure to deal with.
