Monday, April 04, 2005

Traders Helping Traders Daily Update for Friday 4-1-05

==================================================
Erich's Update for Friday, April 1, 2005
==================================================
Subscribers got these on Thursday Nite...Testdrivers get theirs somewhat after the fact! To get yours BEFORE the action, go to http://www.supportandresistance.com/subscribe.html.

Scroll down for TOM'S TRADES.

Erich will be away from April 5 to15 while on the road to California for the Seminar. There won't be any updates from him for the period he is on the road as finding a good internet hookup can sometimes be a pain. Tom will doing the updates for period Erich is travelling.
==================================================
1: MAY CORN
==================================================
CK5 O=4 1/4 HI=8 1/4 LO=1 1/2 CL=3

What a crazy day in corn. The market rallied hard only to be turned around before the close. Don't know what to make of it, but we're still long with stops at breakeven. First profit target remains 219 3/4.
==================================================
2: MAY COTTON
==================================================
CTK5 O=10 HI=10 LO=65 CL=03

Brutal day in cotton as prices opened with a big gap and continued lower throughout the session. I'm still cautiously bearish this market, but can't find a good entry signal. Tomorrow (April 1) is April Fool's Day so I think it's best we leave cotton alone.
==================================================
3: MAY BEAN OIL
==================================================
BOK5 O=60 HI=05 LO=85 CL=90

Looks like trader's didn't like the news they got in the Planting report today as bean prices (along with the rest of the grains) fell off hard.

We're back to familiar support at the 2280 line and we can use this to initiate a sell position tomorrow if prices continue lower.

Note: I normally don't like starting a new trade on a Friday, so don't feel like you have to take this trade right now. Chances are we will have another chance to sell on Monday.

*SELL May Bean Oil at 2274
*Stop 2307
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2128
*Approximate Profit Potential: $882 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
==================================================
4: ARPIL LIVE CATTLE
==================================================
LCJ5 O=10 HI=10 LO=40 CL=82.5

Mild bounce off the 9040 support area today. Probably will see a higher session tomorrow, but I'm not all that comfortable with the lines we're trading at right now. Think I'll sit this one out.
==================================================
5: MAY COCOA
==================================================
CCK5 O=05 HI=26 LO=02 CL=13

Cocoa must have sensed my disappointment with it as prices finally got around to rallying today. It was a good session too, with a favourable opening gap - always nice when that happens.

I'm never too keen to hold a cocoa contract over the weekend, so if we see 1669 tomorrow I might be inclined to pack up my toys and go home. In the meantime we can finally bring stops to breakeven.
==================================================
6: MAY WHEAT
==================================================
WK5 O=36 HI=41 1/2 LO=30 CL=31

I guess wheat played an early April Fool's prank on me today as prices ranged high enough to make me buy before tanking and stopping me out.

I thought I had the market pegged after prices were still behaving themselves after opening range, in spite of the big opening gap. The resistance at 342 proved to be too much however as prices fell like a rock before the end of the day.

Thank goodness we only took a $125 hit.

I normally don't trade a market the day after a losing trade; however I'll put this trade out there for you if you're interested. Like the other grain trades we're looking at, don't feel like you have to take this trade tomorrow. There should be ample opportunity to re-enter the market again next week.

*SELL May Wheat at 329 3/4
*Stop 333 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 319 1/4
*Approximate Profit Potential: $525 per contract
*RRR: 3:1
*Degree of Risk: HIGH

==================================================
7: JUNE CANADIAN DOLLAR
==================================================
CDM5 O=54 HI=82 LO=49 CL=69

Surprise! Another higher day in the CD after a lower day! Not really sure what to make of this market. It definitely is trying to sort itself out though, but I'm not sure it's making any progress.

Nothing for me here tomorrow. I'll be stubborn and hold out for a test of 8356 or 8150 before recommitting to the CD.
==================================================
8: MAY SILVER
==================================================
SIK5 O=4.5 HI=2.5 LO=1 CL=4.7

Too bad we weren't playing horseshoes as this trade got really close to working out. Missed it by a crummy 50 cents...now you know why I told you it was extremely risky. ;-)

Still think we hade the right idea and might see prices fall off tomorrow...but I think I'll just watch.
==================================================
9: DECEMBER EURODOLLAR
==================================================
EDZ5 O=.695 HI=.775 LO=.695 CL=.765

The ED had a little fire under it today as rates made a decent rally. It's not so much that rates really gained a lot, but more significantly RSI has had a chance to "refresh" itself.

Now that RSI had pulled back a bit I would welcome a bounce off resistance, which would get me short early next week.
==================================================
10: WILD CARD - MAY BEAN MEAL
==================================================
SMK5 O=5.5 HI=8.5 LO=5 CL=7

How disappointing is that? Bean Meal rallied hard today and missed our profit target by a measely 4 ticks before reversing and taking us out at breakeven.

If you had the chance to watch the trade during the day I hope you would have captured at least some of the available profits...but for the rest of us sulking is the order of the day.

You could try to sell this market tomorrow below the 185 support. As I mentioned before, it isn't necessary to sell this market going into the weekend. It will be much safer to try and sell it next week, but if you're inclined:

*SELL May Bean Meal at 184.9
*Stop 186.7
*Approximate Risk Exposure: $180 per contract
*Profit Target: 176.6
*Approximate Profit Potential: $830 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
.========================================================
"Tom's Trades" for Friday, March 31, 2005
========================================================
1: JUNE 30 YEAR T BOND
========================================================
USDM5 O=0.22 HI=1.14.21 CL=1.12

Today was a very interesting day ... so interesting, in fact, that I will use today as the basis for an entire segment of the upcoming workshop. A report out early in the session was contrary to the best guesses of most all the analysts and economists. They mostly felt we'd see a report that added to inflation fears. The report indicated exactly the opposite ... inflation is well moderted and under control. As a result the market sucked out value added for more agressive future rate hikes.

After a big, swift advance the market cooled and returned to 111.00 ... just like WE knew it would ... it ALWAYS goes to -00 or -16. Look how relaxed we were today. We didn't panic, we didn't go rushing headlong into a trade afraid we'd miss something. The run started at a point of non interest for us, it went crashing thru our point of focus at 111-00. We didn't go chasing it. We sat back waved goodbye with a smile ... knowing we'd soon say hello again at either 111-16 or on the return to 111-00. One or the other was inevitable, wasn't it? Easy stuff, people.

We let the volatility play out ... it was easy, it never gave us reason to do anything because our numbers weren't put in play by market price flow action. This is th epassive benefit side to what we do. It kept us warm and dry until the market came back to IT'S comfort zone ... 111-00. That also happens to be one of our comfort zones. Ain't it funny how that works? It insulated us from the desire to jump on the bandwagon. The correct trading decision was to stay flat which our methods helped us do. A circumstance that begs a bad trade from others but is rendered unapproachable by our methods is as good as a winning trade, I think. Can you see it?

I bought one at 111-02. We went to -12 and failed, out at -08 for 6, $187. Bought another at -02. It went to -08 and failed. We got out at -06 for 4 ticks, $125. Bought again at -03, stopped at -02 for a loss of 1 tick and bought again at -03 which I exited at -08 because of time. We picked up a net 4 ticks, $125 after covering the 1 tick loser. Net on our trades for the day was $437.

The close at 111-12 sets us to work on 111-16 or 111-00 for tomorrow.
========================================================
2: JUNE EURODOLLAR
========================================================
EDM5 O=.460 HI=.495 LO=.460 CL=.485

I knew there was a bounce in there somewhere fighting to get out the closet! Had it touched .500 and failed I would have sold it. Since it only did .495 I decided to wait until tomorrow. If you did sell it there, I have no quarrel. The stop should either be .505 or .525. Under the circumstances I would opt for ... any guesses? ... you got it ... .505. Why? The perceived disappearing inflation, the bottom forming picture and because I am tighter than Jack Benny.

If you waited as I did, we'll look for a retest to .500, maybe a tad higher and sell on the failure and the break of .500.
========================================================
3: JUNE CANADIAN DOLLAR
========================================================
CDM5 O=54 HI=82 LO=49 CL=69

I tried 3 times to get one sold. I finally was able to get a fill on the third time at 8274. Lot of good it did ... stopped out at 8276 for a $20 loss. All the TT numbers for tomorrow plus the 8223/11 range for tomorrow.
========================================================
4: JUNE MINI RUSSELL 2000
========================================================
ERTM5 O=6.00 HI=8.00 LO=2.70 CL=7.80

I told you the day was coming ... I bought one at 616.10, had my stop at 615.70, stopped out at 614.70 losing $140. I sold 1 at 615.90, took the profits at 613.80 getting back $210. Back in the black. I was exhausted mentally ... yes, I am a whimp. I just couldn't get a feeling I was in control of anything ... so I sat down for the balance of the day. Too much volatility and too much swing for me.

All the same TT numbers for tomorrow plus the 616 add from yesterday ... you can go either way, selling a break or buying a retested failure.
========================================================
5: JUNE $5 DOW
========================================================
EYMM5 O=440 HI=573 LO=504 CL=542

I couldn't handle the monster volatility in both the indecies today so I left the Dow alone. Replay of all the TT numbers and the guidance from Monday on 10420/00.
========================================================
6: JUNE GOLD **WE'VE ROLLED TO JUNE**
========================================================
GCM5 O=8.80 HI=0.70 LO=8.60 CL=9.50

I bought twice ...430.50 and 430.40 ...both were stopped out at B/E. We'll try again tomorrow. The $10 channel.
========================================================
7: MAY COTTON
========================================================
CTK5 O=.10 HI=.10 LO=.65 CL=.03

We sold 1 at 53.90 and out at 52.90 for $500. All the same numbers for tomorrow.
========================================================
8: MAY COCOA
========================================================
COK5 O=05 HI=26 LO=02 CL=13

Nothing at our number today. I'll do the same TT numbers tomorrow. I will also buy a break above 1640 or sell a failed retest there.
========================================================
9: MAY CORN
========================================================
CK5 O=2.14 HI=2.14 1/2 LO=2.12 1/4 CL=2.12 1/2

I bought 1 at 2.14 3/4. When we broke above 2.17 I rolled the stop to 2.16 3/4 and they got us there ... out with 2 cents worth, $100. I'll go with the same numbers for tomorrow. I'll also sell a failed retest of anything above 2.17 or buy a break above 2.18.
========================================================
10: MAY WHEAT
========================================================
WK5 O=3.36 HI=3.41 1/2 LO=3.30 CL=3.31

I bought 3.35 3/4 and out at 3.40 1/2 as we easily reached our target for 4 3/4 cents, $237. I sold 3.39 1/2 and was stopped out at 3.37 1/4 for 2 1/4 cents, $212. By then it was too close to end of day so I packed it in. Just in time to watch it drop 10 cents in the last 15 minutes. For tomorrow we'll play the TT numbers and I will buy a break out above 3.32 1/4.
.

Daily Updates for Thursday March 31, 2005

==================================================
Erich's Update for Thursday, March 31, 2005
==================================================
Subscribers got these on Wednesdat Nite...test drivers get theirs somewhat after the fact! To get yours BEFORE the action, go to http://www.supportandresistance.com/subscribe.html
Join the S&R Family.

Erich will be away for part of next week while on the road to California for the Seminar. There won't be any updates from him for the period he is on the road as finding a good internet hookup can sometimes be a pain. Tom will doing the updates for period Erich is on the road.
==================================================
1: MAY CORN
==================================================
CK5 O=4 HI=4 1/2 LO=2 1/4 CL=2 1/2

Near identical day to yesterday as prices stayed bound between 214 1/2 and 213. Leave exit stops at breakeven for tomorrow's Prospective Planting report. If today's action in Beans and Oats is any indication we should be on the right side of the market, otherwise we'll reverse and sell.
==================================================
2: MAY COTTON
==================================================
CTK5 O=20 HI=58 LO=85 CL=38

Cotton headed lower today but not enough to make me want to sell. I was hoping for something a little more substantial but didn't get it. Still not comfortable with a buy, but I might entertain it if we see today's support hold. We'll see.
==================================================
3: MAY BEAN OIL
==================================================
BOK5 O=01 HI=85 LO=88 CL=48

Didn't I tell you that bean oil was a wicked market? This is twice in as many weeks that bean oil has whipped us before breaking out. At least last week we were able to pick up some profit to offset the loss, but this week the market left without us. I thought for sure that the Planting Report tomorrow would have given us one more day. Guess I shouldn't think. ;-)
==================================================
4: ARPIL LIVE CATTLE
==================================================
LCJ5 O=70 HI=00 LO=45 CL=75

If I wasn't such a stickler for staying with the trend I would get pretty serious about selling cattle tomorrow; however my trading rules won't allow it right now.

I wouldn't mind seeing cattle stall out a bit, but I have a feeling we will see a decline tomorrow. That's okay though because it should give us another buying opportunity in a couple of days.
==================================================
5: MAY COCOA
==================================================
CCK5 O=76 HI=87 LO=71 CL=79

Still hanging in the cocoa trade...but just barely. We really need to see something more aggressive to the upside tomorrow or I think the market's going to take us to lunch.

Might run the sell order tomorrow as well, just in case we see something more substantial to the downside. I don't usually like to do this, but I was hoping the market would have moved more decisively by now.

*SELL May Cocoa at 1558
*Stop 1571
*Approximate Risk Exposure: $130 per contract
*Profit Target: 1518
*Approximate Profit Potential: $400 per contract
*RRR: 3:1
*Degree of Risk: HIGH
==================================================
6: MAY WHEAT
==================================================
WK5 O=36 1/2 HI=37 3/4 LO=32 CL=33 1/2

Wheat continues to bounce around the 50% retracement level. Prices didn't do much today, probably in anticipation of tomorrow's report. We've got reasonable support and resistance to trade from, so I'll bracket them both and trade the breakout side.

*SELL May Wheat at 329 3/4
*Stop 333 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 319 1/4
*Approximate Profit Potential: $525 per contract
*RRR: 3:1
*Degree of Risk: Moderate

OR

*BUY May Wheat at 338 1/4
*Stop 335 3/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 354 3/4
*Approximate Profit Potential: $825 per contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate
==================================================
7: JUNE CANADIAN DOLLAR
==================================================
CDM5 O=47 HI=66 LO=11 CL=24

Up, down, up, down...it's like trying to trade a teeter totter...geesch! Nothing interesting in the CD today. Still on hold until we either get closer to 8356, which is looking more and more unlikely, or support at 8150. Note, if you wanted to be aggressive on this trade you could short below today's low as lower rates are looking likely for tomorrow.
==================================================
8: MAY SILVER
==================================================
SIK5 O=8.5 HI=7 LO=7 CL=4.7

Well, if you took yesterday's "suggested" trade you would have done alright as silver made a bee line to the 718 - 719 resistance. I don't think the rally will last however as RSI is right at a test point and I think we will see a reversal tomorrow.

Got $200 bucks you don't need? Then you could try and sell the market in anticipation of resistance holding. Note that this is extremely risky and you will likely lose your investment; however it could be a great trade if it works.

*SELL May Silver at 718.5 (limit)
*Stop 722
*Approximate Risk Exposure: $175 per contract
*Profit Target: 675.5
*Approximate Profit Potential: $2150 per contract
*RRR: 12:1
*Degree of Risk: HIGH
==================================================
9: DECEMBER EURODOLLAR
==================================================
EDZ5 O=.695 HI=.71 LO=.68 CL=.695

The ED's getting warmer, but not quite hot enough to sell just yet. Actually the risk is so small that you could take the market short below today's range if you wanted, and cover the trade above the high, but I think I'll wait one more session.
==================================================
10: WILD CARD - MAY BEAN MEAL
==================================================
SMK5 O=7.5 HI=2.5 LO=7.5 CL=92

Bean Meal easily found our buy order today as prices powered through resistance. Bring exit stops to break even for tomorrow. First profit target is resistance at 198.9.
==================================================
RECOMMENDED BROKER
==================================================
If you are looking for a broker that understands the recommendations and could help you place them, call Matt Zimberg at his toll free trading desk at 1-866-658-7815 [or (561)282-6848]. You can also reach him via email at [email protected]
========================================================
"Tom's Trades" for Thursday, March 31, 2005
========================================================
1: JUNE 30 YEAR T BOND
========================================================
USDM5 O=0-12 HI=0-25 LO=0-03 CL=0-22

Finally, we're getting a little range in the day's trade. We started the day selling 1 at 110-14. We got a preety smooth even run down to 110-03. The tank went empty there and I jumped out at 110-05 for 9 ticks, $281. I actually reversed there selling 2 ... 1 to exit the long and 1 to initiate a long trade. We clawed our way up to 110-14/15 and again it was obvious we'd run the tank try.

When the candles turned from green to predominantly red, I heeded the voice in my ear and bailed ... out at 110-13 picking up another 8, $250. We replenished the fuel stores and set sail north again. I bought again at 110-20 and was stopped out at 110-17 giving back 3 of the 17 we'd captured earlier. The close at 110-22 has us looking for trades off 111-00 or 110-16 for tomorrow.
========================================================
2: JUNE EURODOLLAR
========================================================
EDM5 O=.460 HI=.465 LO=.450 CL=.460

*yawnnnn* ... more of the same. Patience my friends, patience.
========================================================
3: JUNE CANADIAN DOLLAR
========================================================
CDM5 O=47 HI=66 LO=11 CL=24

Sometimes I just shake my head in wonderment at the sheer awesomeness of S&R. It is truly humbling that they allow us such clarity so frequently. Sold one at 8257. When we broke our roll point at 20 going to 16, I brought the stop to 2121 and was stopped out at 23 for 34 points, $340. For the balance of the day we pretty much just sat there at 20 bouncing occassionally to 30. Never gave us a look at anything further.

In addition to the TT numbers which I'll continue to play, 8220 picked up additional power in the past couple of sessions ... actually it's an S&R range between 8211 and 23. I'll buy a retest of 8220 as it rises above 23. The stop is 17. Roll to B/E at 8230. I'll also sell a break below 11 with a stop at 13 or 17 ... your choice ... and roll to B/E at about 8205.

The close at 8224 has us very tight to it ... make sure it's a retest before going in.
========================================================
4: JUNE MINI RUSSELL 2000
========================================================
ERTM5 O=7.60 HI=6.40 LO=7.30 CL=6.30

I guess they figured we'd done well enough yesterday that they'd shut us out today. Zip City. All the same TT numbers for tomorrow plus let's add 616 to the mix ...you can go either way, selling a break or buying a retested failure.
========================================================
5: JUNE $5 DOW
========================================================
EYMM5 O=440 HI=571 LO=438 CL=558

When the window opened we made a break south and set low of the day as it turned out. Would have been very nice if they could have just taken a little lower allowing us in on the added 10420/00 play from yesterday. No such luck. We had to wait for 10460/80 to pop onto the screen. I bought 10466 ... just in time to catch a rocket. We went straight to 10510. Perfect. It backed up a bit from that level and I bailed at 10500 for $170. After pausing to catch its breath off we went again. I bought 10514 and it soon ran out of gas. I was stopped out at 10530 for 16 ticks, $80. Replay of all the TT numbers and the guidance from yesterday on 10420/00.
========================================================
6: APRIL/JUNE GOLD
========================================================
GCJ5 O=6.20 HI=8.00 LO=6.00 CL=6.90
GCM5 O=8.80 HI=0.70 LO=8.60 CL=9.50

We will trade JUNE GOLD tomorrow ... we are done with April.

We got close to the trigger today but it was late in the day and didn't quite get to the levels we needed for the $10 ... nothing done.

JUNE GOLD is at a little higher level than ASpril ... about 2 and a half to 3 bucks. We should have a shot at something tomorrow as a result. $10 channel it is ... with one modifcation, however. 428 is a strong area of support on the June chart. We'll delay our sell just a tad and do it as it breaks below 428.
========================================================
7: MAY COTTON
========================================================
CTK5 O=.20 HI=.58 LO=.85 CL=.38

I'll play 54.00 or 54.50 again tomorrow as well as keeping an eye out for TT numbers. I'll only sell failed retests of those numbers. "No buy" zone.
========================================================
8: MAY COCOA
========================================================
COK5 O=80 HI=93 LO=76 CL=81

Teasing us a bit, trying to lure us to fudge on our numbers ... ain't gonna' do it, wouldn't be prudent. I'll do the same TT numbers tomorrow.
========================================================
9: MAY CORN
========================================================
CK5 O=2.14 HI=2.14 1/2 LO=2.12 1/4 CL=2.12 1/2

Nothing doin' here. That's a sweet double top up there at 2.14 1/2. I won't do anyhting until after the report has been released at 7:30 Chicago time. We'll see where we are and go with the TT numbers or play the double top ... sell a retest and failure, buy a break above.
========================================================
10: MAY WHEAT
========================================================
WK5 O=3.36 1/2 HI=3.37 3/4 LO=3.32 CL=3.33 1/2

I sold the break of 3.35 at 3.34 1/2 and I'm out at 3.33 ...faked us out a bit. Picked up $75. I sold it again ... same number... a bit later. We couldn't have been more wrong as it immediately reversed and went higher. I left the building at 3.35 losing $25. I am nothing if not persistent. I sold it again at 3.34 1/2 and again bailed at 3.33 for another $75. Ugly is what it was. Same deal tomorrow ... 3.35 and 3.40.