Traders Helping Traders Daily Update for Wednesday, 5-4-05

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Erich's Update for Wednesday, May 4, 2005
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1: JULY CORN
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CN5 O=8 1/4 HI=8 3/4 LO=4 1/2 CL=5

What can I tell you? Corn's just not behaving itself right now. Another big day to the downside after yesterday's gap. We're trading on some weekly support right now, so I'm hoping we'll see a reaction here soon so that we can have another kick at this market.
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2: JULY COTTON
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CTN5 O=86 HI=30 LO=91 CL=07

Don't tell me that cotton is finally ready to come down? After waiting for several weeks prices finally look like they've made a reversal. If we get a stall tomorrow off support we'll look at selling on Thursday. It's just a little too risky to try and catch it after today's big move.
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3: JULY BEAN OIL
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BON5 O=55 HI=66 LO=36 CL=62

Bean Oil continues to go nowhere in spite of markets like corn dropping like a rock. Prices continue to battle the 2230 support line and while we could tighten the trade somewhat to enter below here, I'll leave the original plan in play for tomorrow.

*SELL July Bean Oil at 2218
*Stop 2243
*Approximate Risk Exposure: $150 per contract
*Profit Target: 2132
*Approximate Profit Potential: $516 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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4: JUNE LIVE CATTLE
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LCM5 O=15 HI=60 LO=90 CL=40

Another tag on the 8490 support line. If you didn't short cattle on yesterday's break you have another support line to base a trade on for tomorrow. Leave exit stops where they are for now. First profit target is 8382.
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5: JULY COCOA
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CCN5

Cocoa gave us a hook in RSI, but we're still shy of the testpoint. I'll put on a trade tomorrow in case the market is ready to head lower now, otherwise we should continue to see it flounder between support at 1480 and resistance at 1525.

*SELL July Cocoa at 1474
*Stop 1491
*Approximate Risk Exposure: $170 per contract
*Profit Target: 1423
*Approximate Profit Potential: $510 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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6: JULY WHEAT
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WN5 O=24 HI=25 LO=15 1/2 CL=17 3/4

Wheat made a nice move to the downside today after yesterday's wishy washy session. We're the better part of the way to our first profit target so bring your exit stops at least to breakeven for tomorrow.

First target is support at 314 1/4 followed by 303.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=63 HI=85 LO=59 CL=72

Got a little bit of action on the 7980 - 7985 area today as the CD traded within a relatively smallish range. We're not quite to an RSI testpoint, but things are beginning to look much more bearish again.

I thought about putting in a sell order below today's low for tomorrow; however I think I'll wait one more day. Hopefully the market won't run away on us.
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8: JULY SILVER
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SIN5 O=7.5 HI=1.5 LO=2 CL=8.3

Things didn't go so well in silver today as the market ranged high enough to stop us out of our short trade. I know that we had this trade framed a little tight but I'd rather get out early than take a big loss in this market.

Think I'll stand aside tomorrow. I'm not too happy with this market right now.
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9: MARCH EURODOLLAR
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EDH6 O=.96 HI=.005L=.905 CL=.915

Got another bounce off support and resistance today in the ED. Does anyone else see that pennant formation from the last couple of weeks? I still like this trade to the downside. It's still a little risky since we're technically in an uptrend, but let's give it another shot, shall we?

*SELL March Eurodollar at 95.895
*Stop 95.95
*Approximate Risk Exposure: $137 per contract
*Profit Target: 95.67
*Approximate Profit Potential: $862 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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10: WILD CARD
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No wild card market for tomorrow.
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"Tom's Trades" for Tuesday, May 3, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=5-00 HI=5-08 LO=4-21 CL=4-27

Well that was interesting ... NOT. That was brutal late session games. The Bonds and notes observed the FOMC rate increase without even a ripple. We all knew 25 BP was coming ... no biggy, business as usual. What we didn't know was the FOMC would mistakenly leave out one sentence from the announcement and then add it later in the day. By their mishandling of this they creted a situation much worse than the words that were left out. The FED is being blasted by every economist and financial guru on the planet ... and rightfully so. This is what caused that nasty action in the final hour of trade today ... imbeciles!

It shouldn't have done any damage to us as it did occur in the last hour and we all know we don't trade the final hour, I better hear a collective "THAT'S RIGHT". It could've been very damaging. I'm sure it caught a number of traders with their pants not at the normal position.

Oh yeah, the trades ...

We began the day chopping around -28 to -31 without really throwing off a convincing move I felt comfortable trading in light of the elevated risk and poor reward dynamic we spoke of last night. After the announcement I was pretty certain we'd see some up tick. By the time it started getting close to a buy level we were into the final hour. It was right at the edge trading 115-02 and then a red candle at -03. That's when the corrected statement came out. Nothing done on the day.

We will cautiously ease into the day tomorrow looking at 115-00 and 114-16 as well as 114-24.
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2: JUNE EURODOLLAR
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EDM5 O=.580 HI=.585 LO=.565 CL=.570

Still gonna' look for the bounce back to 96.600 or above .610.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=63 HI=85 LO=59 CL=72

I watched for a bit ... I had loads of time for lack of play in the bonds ... It gapped down at the open, which came as no surprise if you peeked at the night session. It was bouncing all over the place, made me dizzy, I moved on. What a schizo session. Same TT numbers in play tomorrow.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=5.90 HI=0.20 LO=1.90 CL=8.00

I bought 586.20 and was stopped out at 586.10 on my B/E roll. Sold 585.80, stopped at B/E. Bought 586.20 and finally got something to work with. A big failure at 588 had me searching for the exit. I bailed at 587.30 making $100 after recouping my earlier loss of $10. I then sold 585.70 which I reversed at 586.10 losing $40 and leaving me long one. I made it out again at 587.30 making $80 after covering my loss. Geez this is hard work.

I took a breather to recahrge th ebatteries and wait out the FED announcement. I soon after bought 586.30 just in time to get caught up in FEDgate. I managed to get out at 584.50 losing $180. I bought 1 at 586.50 and wiggled out at 590 even picking up $170 after paying off my earlier marker. I counted myself lucky and headed for the barn.

Same numbers from TT again tomorrow.
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5: JUNE GOLD
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GCM5 O=0.40 HI=0.40 LO=7.30 CL=7.70

I tried to sell 428.60-40 and couldn't get hooked up. Nothing done. $10 channel for tomorrow.
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6: JULY COTTON
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CTN5 O=.86 HI=.30 LO=.91 CL=.07

It gapped under us, but came back topping out at 56.30 ... close enough. I sold one at 56.20 and was stopped out as it rebounded back above 55.00 and cought my rolled stop at 54.90 for 30 points. I was done with my $150. The hard break in the final 25 minutes I missed. I'll add selling a break of 54.00 or buying a failed retest there to the TT numbers for play tomorrow.
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7: JULY COCOA
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CON5 O=90 HI=16 LO=88 CL=90

I missed buying at the open ... again. I sold 1514, stopped at 1503 for $110. That was the end for me. Same TT numbers again tomorrow.
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8: JULY CORN
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CN5 O=2.08 1/4 HI=2.08 3/4 LO=2.04 1/2 CL=2.05

Now, I'd say it's official, the 2.10 support is broken:) Zap, right down to the next heavy support area at 2.05. I'm watching again tomorrow.
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9: MAY WHEAT
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WN5 O=3.24 HI=3.25 LO=3.15 1/2 CL=3.17 3/4

We survived the night! Right after the open we dipped back to 3.20 1/2 and I bailed at 3.21 for 3 1/2 cents, $175. We clawed our way back to 3.25 so I sold 3.24 1/4 with a 3.25 1/4 stop. After about an hour of sideways drift we broke hard south. I had pegged 3.13 or so as the target with a tight roll at 3.15. When we broke .16 I rolled to 3.16 1/4 and was stopped at 3.16 1/2 pocketing 7 3/4 cents, $387.

I'll sell a break below 3.13 tomorrow or buy a failed test there. 1 1/4 stops and roll to B/E at 3.12 on the sell and 3.14 1/4 on the buy.

Traders Helping Traders Daily Update for Tuesday, May 3, 2005

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Erich's Update for Tuesday, May 3, 2005
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"Courage is not the absence of fear; rather it is doing what you fear." - Anonymous
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1: JULY CORN
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CN5 O=9 HI=0 1/2 LO=8 1/2 CL=9

Geesch! What's a guy got to do to get a corn trade going around here? Today's big gap and big move lower makes this market way too risky to play tomorrow. Let's give it the day off.
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2: JULY COTTON
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CTN5 O=45 HI=48 LO=90 CL=58

Cotton backed off of resistance today as prices failed to break the 5590 - 5600 area. RSI is at a test point right now which could see a bounce tomorrow. I'll run the same trade again although we'd need a good open and/or strong session to find our order.

*BUY July Cotton at 5766
*Stop 5729
*Approximate Risk Exposure: $185 per contract
*Profit Target: 5996
*Approximate Profit Potential: $1150 per contract
*RRR: 6:1
*Degree of Risk: HIGH
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3: JULY BEAN OIL
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BON5 O=40 HI=55 LO=38 CL=54

Tiny tiny range in bean oil today. This is extremely unlike the bean complex to be making such small ranges. Hopefully the market will catch some of corn's fire and head lower tomorrow. Running the same trade from the weekend.

*SELL July Bean Oil at 2218
*Stop 2243
*Approximate Risk Exposure: $150 per contract
*Profit Target: 2132
*Approximate Profit Potential: $516 per contract
*RRR: 3:1 *Degree of Risk: Moderate
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4: JUNE LIVE CATTLE
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LCM5 O=05 HI=05 LO=90 CL=95

Got a nice fill to the short side in cattle today as prices made a big move to the downside. If you can afford the risk leave exit stops where they are for tomorrow, otherwise if you have to tighten them bring them no closer than 8545. First profit target is 8382.
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5: JULY COCOA
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CCN5 O=85 HI=20 LO=83 CL=03

Cocoa continues to stall out around the 1475 support area. This is a perfect example of why I normally avoid countertrend trades - there is always the risk that they won't go anywhere.

Watching RSI for a testpoint to signal our next sell. We're getting close and could set up a short play already, but I'm feeling lucky so I'll push my luck tomorrow. ;-)
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6: JULY WHEAT
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WN5 O=22 1/2 HI=24 1/2 LO=20 CL=23 1/4

This morning's opening gap might have put your trade on hold today as prices stayed below our entry for most of opening range. If you did take the trade then there's not too much you can do with stops just yet...hopefully tomorrow will continue lower.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=47 HI=84 LO=41 CL=73

The CD stalled on support today as we hoped and even hooked in RSI. We're pretty darn close to a test point so I might hold out for that before placing my sell order - probably Wednesday.

Any guesses where the market's likely to top out? Give yourself a gold star if you said 8010 - 8015...that's the area I'm watching.
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8: JULY SILVER
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SIN5 O=4 HI=9.5 LO=1 CL=7.5

Silver moved like a bullet to the downside about halfway through today's session finding our short order before recovering slightly. We're currently short this market however given silver's ability to make big ranges things might be a little testy for tomorrow.

Make certain you have a stop working all sessions if you're short this market (ie. stops in the night session too).
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9: MARCH EURODOLLAR
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EDH6 O=.935 HI=.965 LO=.91 CL=.96

That's what I get for getting cute with the Eurodollar. I thought I could put together a real tight trade and look like a superstar, but the market had other ideas as it filled the order and promptly stopped us out for $112 loss.

I'll give this market tomorrow off, but will take another look at it for Wednesday.
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10: WILD CARD
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No wild card market for tomorrow.
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"Tom's Trades" for Tuesday, May 3, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=5-01 HI=5-03 LO=4-14 CL=4-28

We got 1 sold at 114-28 and caught a little reaction to the ISm report which came in weaker than expected. We made it down to -19 and bounced back to -22 immediately and -24 a bit after that. At -19 I rolled the stop to 21 and was ejected at -22 for 6 ticks, $187. We then bought -21. We stalled at -24. I held on for about 15 minutes and then bolted at -23 for 2 measley more. I sold -14 and gave back 3 getting stopped at -17. I bought -22 and bailed at -29 when we failed to break above -00 for another 7 ticks. Net we end the day with 12 ticks, $375. Volume dried up pretty significantly, not that there was a lot to begin with today, so I buttoned it up for the day.

We are on the eve of an FOMC meeting. It will be announced about 1:15 Chicago time. Be flat an hour before and let the dust settle well before initiating anything. Remember, there is frequently a second reaction when the minutes are released as traders and talking heads look for clues in the comments. We ended the day about where we started at 114-28. We could have fireworks tomorrow as the FED deals with a bi polar set of factors ... inflation heating up and slowing economy. NO matter what the FED does tomorrow some players ain't a gonna' like it much. I think things will be very quiet leading up to the announcement so don't expect much which means be extra cautious with risk as there probably won't be a lot to be made ... risk reward well matched is the word for tomorrow's play. We are on 114-16 and 115-00 watch. I think we'll inch lower into the report. Expect a 25 basis point bump in rates. DO NOT TRY TO BE A HERO TOMORROW.
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2: JUNE EURODOLLAR
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EDM5 O=.575 HI=.590 LO=.575 CL=.575

Stand aside tomorrow, let the FOMC meeting happen, the dust settle and ONLY THEN look for an ooportunity to sell 96.600 or BUY the break above 96.610. Point and a half stops either way.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=47 HI=84 LO=41 CL=73

We made the climb back to our interest level but it took all day long. Nothing done. Same numbers from TT for tomorrow.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=2.20 HI=6.10 LO=9.10 CL=5.80

When the trading window opened we were at about 582 and change. We made it up to 585.90 and failed big time. I couldn't catch up with it to get 1 sold. They avoided all our numbers for the rest of the day ... until the very end of the day ... too late.

We ended our version of the day right at about 586. We'll see where we open tomorrow. This market will also react to the FOMC meeting so be flat 1 hour before the announcement and stay that way until you are sure all the dust has settled. Watch that second reaction potential. Tomorrow could be wild and wooley.
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5: JUNE GOLD
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GCM5 O=4.30 HI=4.50 LO=9.50 CL=0.50

We slid down below the 20 percentile but never climbed back high enough to get us in. The close at 430.50 leaves us eying an opportunity to get something done at teh open tomorrow. So let's be ready for the confirm and the trigger number.
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6: JULY COTTON
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CTN5 O=.45 HI=.48 LO=.90 CL=.58

Almost a carbon copy in reverse of last Tuesday's price flow. I sold 57.35. When we hit 56.15 and turned, I rolled to 56.51 and got stopped out at 56.55 for 80 points, $400. We climbed all the way back to 57.40 and then tanked in the last 15 minutes. It was too late for me to do anything. We settled at 56.58. I will sell the break of 56.50 tomorrow or buy the failed retest there. All the TT numbers are also valid tomorrow.
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7: JULY COCOA
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CON5 O=85 HI=20 L=83 CL=03

I tried to buy 1488 but they wouldn't hear of it. Went right to 1520. I was steamed that I missed it. I sold 1515 and was stopped out at B/E. Same TT numbers for tomorrow.
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8: JULY CORN
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CN5 O=2.09 HI=2.10 1/2 LO=2.08 1/2 CL=2.09

A number of negative factors played hard on Corn prices today. Planting progress was the big culprit as either a lot of good guesses were made or the report numbers were leaked. We opened at 2.09 off about 4 cents from yesterday's close. The report indicated the crop was much further along than analysts had believed to be the case. We were on good numbers, it just gapped away from us.

We went right to the next major support level and then sorta' hung out there all day. Overnight prices are holding and I would definitely not declare today as a break of the major support. Given the significance of the news on plantings the fact that no follow through surfaced is surprising. As is usually the case with hard reactions to fundamental news I would not be at all surprised to see us sit right where we are or even climb back above the 2.10 1/2 former support tomorrow.

I'm going to watch tomorrow, see how the market absorbs the report and we'll get something going on Wednesday. There is a lot of ppotential risk in a trade either way tomorrow with not much chance of a comensurate return.
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9: MAY WHEAT
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WN5 O=3.22 1/2 HI=3.24 1/2 LO=3.20 CL=3.23 1/4

I sold 3.24 even about 10:30. At 3.20 1/2 I rolled my stop to 3.21 1/4 since it had bounced off 3.20 earlier in the day. I was stopped at 3.21 1/2 for 2 and a half cents, $125. I sold 3.24 1/4 again late in the day and am holding this trade into tomorrow with a stop at 3.25 1/4. We'll see what's what tomorrow on the open. It is showing a little strngth overnight so we may not make it to the open.