Wednesday, May 11, 2005

Traders Helping Traders Daily Update for Tuesday, 5-10-05

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Erich's Update for Tuesday, May 10 2005
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Scroll down for Tom's Trades.

Subscribers got these on Monday evening, Test drivers get theirs after the fact. If you want it hot and fresh, go to http://www.supportandresistance.com/subscribe.html

"If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time." - Chinese Proverb
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1: JULY CORN
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CN5

Corn gave us a pretty good reaction off the 210 line today as prices closed lower overall. The market might not reach our intended sell order which was off the 211 resistance, but I think I'll run it another day all the same. If prices head lower tomorrow then we'll look at selling below the reaction day.

*SELL July Corn at 311 3/4
*Stop 214 1/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 200 3/4
*Approximate Profit Potential: $550 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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2: JULY COTTON
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CTN5 O=30 HI=20 LO=50 CL=01

We got our trendline test in RSI today so it is likely that cotton will reverse tomorrow and head lower. There are two ways to take this trade tomorrow. The higher risk vesion is to sell the market from the resistance near the high. Needless to say this is much more risky than waiting for prices to break the support on the low.

I'll show you how I would put together such a trade, but keep in mind that it is extremely high risk, espeically for the position trader and should only be attempted if you are prepared to lose your investment.

*SELL July Cotton at 5555
*Stop 5603
*Approximate Risk Exposure: $240 per contract
*Profit Target: 5267
*Approximate Profit Potential: $1440 per contract
*RRR: 6:1
*Degree of Risk: HIGH
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3: JULY BEAN OIL
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BON5 O=50 HI=75 LO=43 CL=56

Bean oil gapped our entry this morning which should have made you put the trade on hold or pull it altogether. It's too bad since it seems we had this market pegged pretty well. Let's give it the day off tomorrow and see what shakes out.
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4: JUNE LIVE CATTLE
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LCM5 O=00 HI=50 LO=95 CL=40

Cattle continues to trade tighter and tighter. We're still short this market with stops at 8567 but I have to admit I wish we would have send at least enough downward momentum to get stops to breakeven!

We've got good resistance at 8550 - 8560 and could look at a buy above resistance as well, but since we've already got an open position I'll stick with that for now.
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5: JULY COCOA
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CCN5 O=79 HI=94 LO=76 CL=89

Fairly predictable day for cocoa for a Monday as prices continued to play around the 1475 support line. We're very close to an RSI testpoint and think we'll see a definite test tomorrow. If we do that should get us in a good position to sell on Wednesday.
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6: JULY WHEAT
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WN5 O=18 3/4 HI=21 LO=12 3/4 CL=13 1/2

Funny day in the wheat market as prices came close to the 323 resistance we were watching, getting as high as 321, before falling off considerably.

I'd like to short wheat again but have to admit that all the support at 309 is leaving me scratching my head at the moment. Hope it doesn't run away on us.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=84 HI=89 LO=67 CL=79

Got very close to the 8100 resistance line we are watching in the CD today. Prices still look fairly bullish overall; however this resistance could be significant enough to cause a bounce. If we get a reaction tomorrow I'll be all over selling this market on Wednesday.
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8: JULY SILVER
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SIN5 O=6 HI=2 LO=4 CL=8

Rather bullish day in silver today as prices retreated from support. We can actually tighten up our sell order a bit now that RSI is getting close to a test point.

I would adjust the trade to sell below the 690 support which is fairly substantial and look to trade the market back down to support at 668.

*SELL July Silver at 689.5
*Stop 694.5
*Approximate Risk Exposure: $250 per contract
*Profit Target: 668.5
*Approximate Profit Potential: $1050 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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9: MARCH EURODOLLAR
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EDH6 O=.835 HI=.85 LO=.825 CL=.83

The ED headed lower on a gap today. The whole session was rather small, but that's not too unusual after a big day like we saw last Friday.

Rates did range enough to find our entry order so we are currently short this market. Exit stops have to stay where they are for the moment. Keep your fingers crossed for tomorrow. ;-)
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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 10, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=3-31 HI=4-03 LO=3-26 CL=4-01

Gee, a little volatilty hangover from last week? That was a very quiet day! I sold one at -29 and got stopped at B/E. About a half hour later I tried one at -28. It snapped right back so I bailed at -30 losing 2 ticks, $62. From there it never gave us a number to play.

We settled at 114-01 so we'll be on the watch for the same numbers tomorrow ... 114-00, 114-16, 113-16 with 114-08 and 113-24 as secondary targets of opportunity. I will again prefer to see it move off 114-00 before playing and either come to it or head for one of the other numbers.
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2: JUNE EURODOLLAR
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EDM5 O=.545 HI=.550 LO=.545 CL=.550

Just wiggled around a little between .54 and .55. I sat tight. We'll play the TT scenario again tomorrow.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=84 HI=89 LO=67 CL=79

I tried to sell one as it broke 8080 without success. 8067 wasn't close enough to allow me to try buying one on the theory we'd tested 8060. When we climbed back up the ladder, I bought one at 8084 and was stopped out at 8083 on my B/E roll for a 1 tick, $10 loser.

We'll go with the same numbers from TT weekend again tomorrow. It certainly is struggling with 8080. That will be the primary focus tomorrow as we settled at 78.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=7.30 HI=3.50 LO=4.00 CL=2.50

I bought one at 601.20 and was stopped out at 600.10 losing $110. I'd seen enough and felt nothing ... good sign to quit. All the same numbers from weekend TT tomorrow.
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5: JUNE GOLD
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GCM5 O=6.20 HI=7.30 LO=5.40 CL=6.90

Nothing for us today. $10 channel for tomorrow.
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6: JULY COTTON
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CTN5 O=.30 HI=.20 LO=.50 CL=.01

Today could have been much nicer had I included the numbers from last week at 53.50 as well. Woulda', coulda', shoulda':) I bought 1 at 54.00 and bailed at 55.00 for $500. I actually tried to sell one off the failure at 55.20 but couldn't do any better than 54.80 so I let it be.

We closed at 55.01. I will not buy the break above but will sell a break back below if given the opportunity. Also, I'll play the numbers from TT as well.
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7: JULY COCOA
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CON5 O=79 HI=94 L=76 CL=89

Nothing done in the Cocoa today, it chopped around under 1500 all day long. Same TT numbers again tomorrow.
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8: JULY CORN
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CN5 O=2.09 1/2 HI=2.10 LO=2.06 1/2 CL=2.07 3/4

I sold 2.09 1/2 and was stopped at .08 1/2 for a penny. Later I sold 2.09 because it was the best I could do. I rolled to 2.07 1/4 when we broke 2.07 and was stopped there for a penny and 3/4 ... grand total for the day 3 cents minus a quarter, $137. I'll go right back after the same numbers tomorrow ... 2.10 and 2.05.
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9: MAY WHEAT
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WN5 O=3.18 3/4 HI=3.21 LO=3.12 3/4 CL=3.13 1/2

I sold 3.19 1/2 3 times. The first and second, I was stopped out at B/E. The third time was the proverbial charm. I tried to get oput at 3.13 when we broke it but couldn't get it done until 3.13 1/2 for 6 cents, $300. Same 3.13 and 3.20 plays for tomorrow.