Thursday, April 07, 2005

Traders Helping Traders Daily Update for Wednesday 3-6-05

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Erich's Update for Wednesday, April 6, 2005
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Subscribers got these on Tuesday night, Test Drivers get theirs after the fact. To get yours fresh and squeaky clean, please go to http://www.supportandresistance.com/subscribe.html.

Erich will be on the road to California from April 11 - 15 for THT's first ever live seminar this coming weekend, so our Tom will be doing all the Daily Updates for the duration. Erich will try to give you some updates during his travels, but finding an internet connection on the road can be a little sketchy so he's not promising anything. Enjoy!

"To win you have to risk loss." - Jean-Claude Killy
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1: MAY CORN
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CK5 O=7 1/2 HI=8 LO=5 1/4 CL=5 1/2

Caught a nice move to the downside in corn today. In spite of the opening gap the market hung around our entry for the better part of the session before falling off quickly near the end of the day. Bring exit stops to breakeven (207 3/4) for tomorrow. First profit target is support at 199 1/4.
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2: MAY COTTON
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CTK5 O=40 HI=50 LO=95 CL=05

Cotton you horrible tease! Why don't you hurry up and make up your mind already?!? Prices fell off slightly today, but we're still above the trendline so I'm hesitant to sell right now. I'd love to see a test of 5170 tomorrow which could set up for a short trade by Thursday. The market is becoming a bit pennant-ish, but I still favour the downside for now. Nothing new tomorrow.
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3: MAY BEAN OIL
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BOK5 O=90 HI=99 LO=69 CL=82

The battle lines have been drawn in bean oil as prices made yet another tag at the 2300 line. What do you think, if prices break above here, we should see them continue higher? I think so too.

There's a WASDE report scheduled for Friday which will likely affect this market in a big way, but for the time being I'll look to buy a 2300 break tomorrow and if prices retreat and get closer to testing 2220 then we'll regroup and look to sell.

*SELL May Bean Oil at 2311
*Stop 2279
*Approximate Risk Exposure: $192 per contract
*Profit Target: 2438
*Approximate Profit Potential: $762 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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4: JUNE LIVE CATTLE
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LCM5 O=00 HI=50 LOĆ’65 CL=47.5

Note, I've switched to the June contract for the remainder of the week.

Today saw the market give us some support at the rather heavy 8365 area. This might be a touch premature, but I'll look to buy the market tomorrow on a break above the 8370 resistance. I'll give it a bit of room on the entry side to be sure, although this might not allow us to move our stops until the day after.

If you want a more "predictable" trade, wait for prices to show us support tomorrow before buying in on Thursday.

*BUY June Live Cattle at 8482
*Stop 8437
*Approximate Risk Exposure: $180 per contract
*Profit Target: 8630
*Approximate Profit Potential: $590 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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5: MAY COCOA
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CCK5 O=70 HI=77 LO=53 CL=55

If you left your order in all day today you would have gotten filled short in the dying moments of the day. If you are not currently short from 1554, consider selling below today's low (around 1549) and cover the trade on the other side of 1570. First profit target is support at 1487. Hopefully we'll see prices pick up some momentum to the downside.
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6: MAY WHEAT
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WK5 O=15 HI=17 1/2 LO=10 1/2 CL=11 1/4

Wheat has got me floored. I thought for sure we would have seen a reaction to all that support by now, but so far nothing. Good for those already short from last week as we've got $925 in profit as of today's close.

Bring in exit stops to protect those profits a bit. Let your account be your guide, but you probably don't want to be much higher than intraday resistance at 315.

Kudos to Dino Dave who posted a nice trade of a 319 breakout at the forum. You nailed this one David!
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7: JUNE CANADIAN DOLLAR
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CDM5 O=78 HI=14 LO=76 CL=06

[YAWN!] Time to poke some fun at the Canadian Dollar so this market smartens up and goes somewhere! Rates are still hovering around the 8200 line, but I'm not interested in shorting until we get a test of 8150. Likewise I'm holding out for a test of 8356 before we look at buying again. In the meantime expect more of this mindless chop.
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8: MAY SILVER
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SIK5 O=3.5 HI=9.5 LO=6 CL=4.3

Silver rallied slightly today but finished the day without any directional bias. The RSI indicator is showing another test of the trendline, but this is the fourth one, so it will be interesting to see if the trendline holds or if prices will break through. I'm betting they head higher...but I'm just watching for now.
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9: MARCH EURODOLLAR
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EDH6 O=.70 HI=.71 LO=.67 CL=.69

The ED is beginning to channel a bit which could help us define current support and resistance for this market. If rates rally I'd look for a reaction at 9584 as our next signal to sell. Nothing too interesting for tomorrow however.
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10: WILD CARD - MAY BEAN MEAL
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SMK5 O=2.2 HI=6 LO=1.3 CL=4.1

Stopped out at breakeven on our original bean meal trade and caught a break on the new trade as the market made the low just after the opening gap, so our order was on hold for opening range.

Might run it again tomorrow, although I'm not sure if we're going to see an attempted rally. Adjusting the entry to take into account today's low.

*SELL May Bean Meal at 180.9
*Stop 183.3
*Approximate Risk Exposure: $240 per contract
*Profit Target: 170.9
*Approximate Profit Potential: $1000 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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"Tom's Trades" for Wednesday, April 5, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=1-22 HI=1-29 LO=1-13 CL=1-19

I felt I'd let one get away from me yesterday by not selling the test of -28 and then seeing the bonds make the nicest run of the day. I sold -26 on a belief we just might do the same thing today. I exited at -17 for 9 ticks, $281. I bought 1 at -20 and sold it at -27 for another 7, $218. That left us inside the last hour so i closed shop for the day.

The close at 111-19 puts us on the trail of 111-16 and 112-00 for tomorrow.
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2: JUNE EURODOLLAR
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EDM5 O=.510 HI=.520 LO=.505 CL=.510

Another yawner ... play the TT numbers again tomorrow.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=78 HI=14 LO=76 CL=06

Bought 1 at 8183 shortly after the open. I exited this trade by selling 2 at 8210 reversing the position. That move took me out of the long trade with $270 and put me short 1. I was stopped out of this trade at 8200 on a stop placed at 8199. You can easily guess why I did that ... once 8200 had been broken I would not relish being short as it came back above 8200. That was it for the day in the CD.

I'm sticking with all the TT numbers for tomorrow which includes 8180. I didn't specifically identify this as a trade level over the weekend. It was identified as a target on the short trade and it is a number we used rather effectively in the past.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=6.30 HI=8.40 LO=3.80 CL=6.80

Started the day with a buy at 616.60. We didn't make it to 620 which would have made the exit a slam dunk. I exited at 617.40for $80. I tried to buy 616something under .50 but could not. I sold 615.70 on the break of 616. The 4th time it tried to get below 614 and failed I elected to get out. Not the best of timing of the order. I finally got out at 614.70 for $100. I bought 616.30 and was stopped out at B/E. I then sold 615.70 and bailed at 614.60 for $110. My nerves were shot so I gave it up for the day with a total take of $290. We'll play the full array of numbers tomorrow.
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5: JUNE $5 DOW
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EYMM5 O=445 HI=492 LO=436 CL=480

I was too busy with the Russell fighting to eke out some profit. This chart was too dang hard to get a handle on. Rather than overheating my brain I simply closed the door on this chart in favor of my ability to concentrate. All the same numbers from TT guidance for tomorrow.
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6: JUNE GOLD
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GCM5 O=5.70 HI=7.80 LO=5.50 CL=6.60

Close enough, I thought ...sold 427.70 and out at 426.80 for $90. Never gave us another look all day. $10 channel and 428 just as we outlined in TT is the play for Tuesday.
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7: MAY COTTON
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CTK5 O=.40 HI=.50 LO=.95 CL=.05

Yup, the same outcome. Nothing in the Cotton cards for us today. I'll stick with the same numbers from TT for tomorrow.
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8: MAY COCOA
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COK5 O=70 HI=77 LO=53 CL=55

A peek ... spelled it right today ... was about all they gave us. 1577 was close enough with the failure, I just couldn't get it done at better than 74 ... I thought that was too low. I sold 59 which wasn't the best trade of the year. Stopped out 64 on my 63 stop for a loss of $50. Same TT numbers for tomorrow.
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9: MAY CORN
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CK5 O=2.07 HI=2.08 LO=2.05 1/4 CL=2.05 1/2

Almost a 2 cent gap down and then barely a penny range had me on the trailer for the day. Another little break to the south near the close leaves us at 2.05 1/2. Its been sloppy and weak the past week. We could easily revisit the contract lows from here. Only two trades that interest me. I'll buy a retest and accompanying failure inside 2.04 not lower than 2.03 or I will buy a break back above 2.09 1/2. Anything else, I think is an invite to a whack. Yes, I concede the point that a lot of S&R exists between 2.09 and 2.03. RRR precludes any reasonable proposition in my opinion, so I'll pass on anything other than the levels mentioned above.
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10: MAY WHEAT
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WK5 O=3.20 HI=3.23 LO=3.15 CL=3.16 1/3

The Wheat is even weaker than the Corn at this point. We broke some pretty significant support on Monday, retested it and failed again today. You wanna' buy this? Didn't think so. You wanna sell this? I don't think that's the answer either. That leaves us 1 choice ... place both hands firmly under your tush and sit. Let's see how we deal with 3.10 support tomorrow before comtemplating anything.