Wednesday, June 01, 2005

Traders Helping Traders Big Weekend Edition, etc. for Memorial Day Weekend

Both Part One and Part Two of the Big Weekend Edition are posted online at http://www.supportandresistance.com/testdrive.html and
http://www.supportandresistance.com/testdrive2.html

The THT Daily Update for Tuesday May 31st, 2005 is posted below:

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Market Update for Wednesday, June 1, 2005
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"The will to win, the desire to succeed, the urge to reach your full potential...these are the keys that will unlock the door to personal excellence." -Eddie Robinson
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1: JULY CORN
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CN5 O=7 HI=7 1/2 LO=9 3/4 CL=2

The big opening gap put our long trade on hold today as prices continued lower for the entire session. It's starting to look like we might get our testing of the 217 support after all. Think I'll just watch tomorrow.
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2: JULY COTTON
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CTN5 O=85 HI=95 LO=50 CL=64

Never, ever will I take a countertrend trade. No matter how promising. No matter how enticing. Never. You're my witness.

Cotton hurt us in a bad way this morning as prices resumed the trend and kicked us out for a $360 loss. Ouch.

We're really close to support at 4840 so I think I'll skip tomorrow's session. I'll be too busy licking my wounds anyway.
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3: JULY BEAN OIL
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BON5 O=75 HI=85 LO=07 CL=15

Bean Oil made an attempt to head higher today, but it was very short lived. Good thing too as prices quickly reversed and headed lower. Our buy order was not hit, which was a good thing.

Might see a reaction tomorrow or the next day as prices are once again flirting with the 2300 support. If they don't hold up here look for support to happen around 2285-90.
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4: JUNE LIVE CATTLE
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LCM5 O=80 HI=60 LO=80 CL=42.5

A relatively strong day for cattle today, but notice where the market topped out? Yep, right at the 8560 line we were watching. Exactly. If we get a reaction here tomorrow that will be the green light to sell cattle again.

To be on the safe side I'm watching tomorrow, but I think this could be a very promising trade.
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5: JULY COCOA
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CCN5 O=15 HI=25 LO=15 CL=22

Another smallish session for cocoa. Not exactly the way I thought this market would start the week. Prices continue to test support at the 1415 area and if you're still short from last week then you've still got to leave your stops above 1430, but get them as close to breakeven as you can.

While we might see cocoa flop around a bit I'm still interested in selling this market short. You could run the weekend trade tomorrow, but I don't think we will see a fill just yet.

*SELL July Cocoa at 1409
*Protective Stop: 1433
*Approximate Risk Exposure: $250 per contract
*Profit Target: 1319
*Potential Profit: $900
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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6: JULY WHEAT
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WN5 O=40 HI=41 LO=28 1/2 CL=31 3/4

Thank goodness for support and resistance! Once more using support and resistance kept us out of a potentially bad trade. Wheat had a good opening but quickly declined after hitting the 340 resistance area.

Just like corn, we might see a test of the 321 support after all. I think we can probably expect prices to continue lower tomorrow as well. A reaction to the 321 - 323 support would be welcomed as a buy signal, so keep a lookout for that.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=41 HI=98 LO=24 CL=76

The CD continued to contend with the resistance at 8000 without getting any higher today. Our entry at 8006 was never threathened. Today's session was a little wishy-washy and as such I'm not too sure what to expect tomorrow.

Right now it looks as though support is holding so we'll run with the buy trade again tomorrow. Hopefully we'll see the market either make a good fill, or give us a good bounce. Enough of this wish-washy-ness!
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8: JULY SILVER
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SIN5 O=5.5 HI=0 LO=4 CL=5.2

Out off all the markets we follow silver's data always seems to be the dirtest, so if you're figures don't jive exactly with mine, don't worry about it.

One thing for sure though is that we got a good fill in our buy order today as the market made a strong break to the upside. We're a little better than $650 to the good on this trade so far, and I don't feel like giving much of it back, so bring your exit stops just under today's close and the support at 740.

Make certain you've got a stop working through the night session on this one. First profit target is resistance at 763.5.
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9: MARCH EURODOLLAR
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EDH6 O=.025 HI=.08 LO=.025 CL=.055

The ED trade just confirms the "never-trade-against-the- trend" rule as we got handed a $100 spanking on today's open. At least this one didn't hurt as much as cotton! Now that we have a confirmation of support, and we're closer to 9610, I'll look at buying the market tomorrow above the resistance area.

Yeah, I know, I usually don't trade a market after taking a loss, but we can keep the risk pretty small here.

*BUY March Eurodollar at 96.105
*Protective Stop: 86.07
*Approximate Risk Exposure: $88 per contract
*Profit Target: 96.265
*Potential Profit: $400
*RRR: 4 1/2:1
*Degree of Risk: Moderate
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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 Wednesday, June 1, 2005
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Here's a $1592 day for ya' to study ... and I didn't make a dime in the Bonds and I screwed up a $4-$500 trade in the Cotton. With the Russell in play we probably had about $200-$250 at risk at times. No other trade had much more than $100 at risk. Oh yeah, I forgot you can't trade with short stops ... never mind.
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=6-22 HI=7-19 LO=6-21 CL=7-14

A day of power in the Bonds sparked by very weak report on manufacturing activity. We sold at 116-29 and were stopped out at B/E. No other attempts were made. In retrospect I probably should have bought 116-24 early on. I would have banked 5 or 6 off that play, I think.

The close at 117-14 leaves us preparing for a trade off 117-16 or 117-00. No buying in here. That's off limits until 116-00 at the earliest.
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2: JUNE EURODOLLAR
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EDM5 O=.580 HI=.585 LO=.577 CL=.580

We'll roll to September on the next trade. I'm going to hold this one 1 more day. If we don't make a move higher tomorrow I will exit best price available and then roll over to Sept. OI and Vol are still up there in June but Sept volume Friday was twice that of June so I'm done here.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=41 HI=98 LO=27 CL=76

A big gap down open derailed any chance we had at 7980. We got there late in the day so I'll go with the TT plays as if today never happened.

I thought it interesting that we opened after the gap at 7940 and after a small dip returned there and luanched higher. We will file that one away for future reference ... pardon the pun.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=9.80 HI=0.40 LO=4.90 CL=7.30

We were playing in the 619.18 neighborhood when the trading window opened. We went right to 616 and failed after showing some early downside power. I bought 616.40 and jumped ship at 617.70 for $130. The failure there took us right back to 616. Reminds me of a story with fish and barrels in it. I bought 616.40 again and exited at 818.20 for $180.They gave us 3 5 minute bars that attempted to go higher than 620 and failed. Close enough to 621 with a set up like that ... I sold 620 and exited at 615.80 for $420.

The full array of previously identified levels in TT are at play tomorrow. I don't see any evidence we need to add or subtract any numbers from the array.
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5: AUGUST GOLD
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GCQ5 O=7.50 HI=9.80 LO=5.80 CL=8.90

A nice little $5 gap lower to welcome us the trading Sept. We eventually climbed back to near 420 and confirmed the channel. We are looking for a confirmation of the channel again tomorrow and then a chance to sell.
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6: JULY COTTON
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CTN5 O=.85 HI=.95 LO=.50 CL=.64

Without an editor it was bound to happen sooner or later. Hopefully you were all more awake than I and referred back to last week's TT. I meant to repeat the sell portion of last weeks TT in with yesterday's Cotton comments and just flat forgot about it. I pinched a nerve in my back last weekend and have been relegated to darvocet to deal with it. Might have been that or might be I can't drink any wine while I'm taking it. That's my story and I'm stickin' to it. Would have been a nice one. As I said, I hope you all were more on your game than I was. My apologies. I'll do my best to make sure that doesn't happen again.

48.50 was just a perfect "what's most likely" target as well ... closed that old February gap and everything. There's enough there to justify a whack at 'em. I will sell a break below 48.50 with a 48.63 stop and a roll to B/E at 48.40. The target is 46.00. I'll also buy a failed retest at 48.50 with a stop at 48.37 and a B/E roll at 48.60. The traget here is 50.00. There are some likely S&R levels between each entry and the corresponding target. Roll tight. All other prices keep a stop trailing no more than 30-35 points back.
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7: JULY COCOA
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CON5 O=15 HI=25 LO=15 CL=22

Raising it to 1430 kept us sideelined and avoiding another B/E or small loosing trade. I'll play the same 1430 scenario tomorrow.
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8: JULY CORN
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CN5 O=2.27 HI=2.27 1/2 LO=2.19 3/4 CL=2.22

WOW ... big ol' honkin' gap higher ... almost 6 cents worth. Corn just couldn't sustain the weekend pent up sentiment though. We started pulling back almost immediately. I sold 2.24 1/2 with a stop back a penny and a quarter, 2.25 3/4. Where do you think we went? If you said 2.19 you were pretty close. I bailed at 2.20 1/4 and reversed the trade. Where did we go? 2.24 1/4. I'm out at 2.23 3/4. 2 pretty nice scalps totalling 7 3/4 cents to start the week. That's $387.

Same numbers from TT tomorrow.
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9: MAY WHEAT
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WN5 O=3.40 HI=3.41 LO=3.28 1/2 CL=3.31 3/4

Well, is that pretty double cool or what? Sold 3.39 1/2 as we returned to break 3.40. The bad news is we got stopped out at 3.37 3/4 for 1 3/4 cents. We went right back banged on 3.39 twice(using 5 minute candles). I sold again at 3.38 1/4. When we passed thru 3.30 and then hit 3.28 1/2 I vowed to be gone if we made our way back to 3.30. I put the stop at 3.30 1/4 and was stopped at 3.30 1/2 for 7 3/4 cents plus 1 3/4 from the first trade for a total of 9 1/2, $475.

3.29 is my magic number for tomorrow. We'll buy a retest that fails to punch lower or sell a break below. Stops and B/E rolls are a penny and a quarter.