Thursday, June 16, 2005

Traders Helping Traders Daily Update for Tuesday, June 14, 2005

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Erich's Update for Tuesday, June 14, 2005
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Scroll down about halfway for "TOMS TRADES."
"If you're not prepared to lose a little in trading, then you'll probably never make a lot." - Erich Senft
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1: JULY CORN
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CN5 O=2 HI=7 LO=2 CL=5

Bit of a reversal in corn today as the market stopped us out shortly after the open. You probably got out at/near breakeven so it didn't hurt too badly. We're flirting with the 217 - 218 resistance again and at an RSI test point. This could be the fourth bounce so a break is likely.

If we get a higher session tomorrow I'll probably look at buying again on Wednesday.
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2: JULY COTTON
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CTN5 O=30 HI=70 LO=25 CL=53

Cotton rallied slightly today, but not with a lot of momentum. Still looking for prices to test the 4850 area, but I'm also watching RSI for our next sell signal which could be as early as tomorrow.

Standing aside for one more day.
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3: JULY BEAN OIL
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BON5 O=68 HI=25 LO=62 CL=13

Bean Oil failed to break support today and really didn't do too much. While the lower closing price suggests that the market might head lower tomorrow, RSI is also at a testpoint which could see prices break through resistance as well. As such I would probably bracket the support and resistance and trade the breakout side.

*BUY July Bean Oil at 2343
*Stop 2309
*Approximate Risk Exposure: $204 per contract
*Profit Target: 2498
*Approximate Profit Potential: $930 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate

OR

*SELL July Bean Oil at 2257
*Stop 2277
*Approximate Risk Exposure: $120 per contract
*Profit Target: 2163
*Approximate Profit Potential: $564 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate
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4: AUGUST LIVE CATTLE
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LCQ5 O=70 HI=20 LO=25 CL=35

Cattle headed lower this morning in a hurry with a big gap to the downside. This huge gap voided our short for today, but obviously we had the right idea. Too bad, it could have been a nice trade.

Expect traders to second guess themselves beginning tomorrow and while I think cattle prices will head lower still, a rebound/pause of sorts is likely.
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5: SEPTEMBER COCOA
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CCU5 O=25 HI=36 LO=20 CL=27

Cocoa tested support at 1420 today before recovering slightly. You can tell by the smallish ranges that the market is very indecisive right now. I'll run the short trade tomorrow again; however if we get a higher session I will look to buy on Wednesday.

*SELL July Cocoa at 1417
*Stop 1436
*Approximate Risk Exposure: $190 per contract
*Profit Target: 1354
*Approximate Profit Potential: $630 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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6: JULY WHEAT
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WN5 O=16 1/2 HI=20 1/2 LO=13 CL=13 3/4

Nuts...wheat prices rallied enough to find our buy order today before reversing and finding our stop for $175 whipsaw. We were holding our own for most of the session, until the very end when prices tanked.

Oh well, better to be out with a small loss than a big one, right?

While I normally don't trade the same market the day after a loss, I will run the wheat sell tomorrow. There is an awful lot of support at the 313 area and a break here will hopefully see prices head lower.

You can run the weekend trade again, or if you wanted to tighten the entries based on the 313 support you could do the following:

*SELL July Wheat at 311 3/4
*Stop 317 1/4
*Approximate Risk Exposure: $275 per contract
*Profit Target: 295 1/4
*Approximate Profit Potential: $825 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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7: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=73 HI=82 LO=58 CL=76

Small day in the Canadian Dollar as the market fell off from resistance at 8000. This is a little bit of a surprise as I thought we would see higher rates in the near future but apparently the market had other ideas. ;-)

We could sell the market short below the 7950 support tomorrow, but I think I'm going to hold off one more day. If we get a reaction to the 7950 line then I wouldn't count the bulls out just yet.
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8: JULY SILVER
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SIN5 O=8 HI=3 LO=9 CL=6.5

Silver built up the resistance in the 727 area a bit today and I do think that prices will continue higher over the near term; however I'm not convinced that this is the right time to buy.

As you know silver can make some deadly ranges, and I'd like to see a slightly smaller session to allow us to keep our risk a little tighter before committing.
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9: MARCH EURODOLLAR
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EDH6 O=.965 HI=.985 LO=.95 CL=.965

The Eurodollar showed us some support today in the 95.95 area. We could readjust our trade to sell short from here but I think we could see rates flounder a bit after last week's decline. For this reason I'm going to leave my entry a little further away to try and keep out of the market's way while it sorts itself out.

If we see a continued testing of support then I'll bring the entry up a bit...but not tomorrow.

*SELL March (06) Eurodollar at 95.92
*Stop 95.985
*Approximate Risk Exposure: $162 per contract
*Profit Target: 95.685
*Approximate Profit Potential: $587 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Tuesday, June 14, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=7-00 HI=7-03 LO=6-18 CL=6-24

A gap down opening took us right to 117-00. Shortly after, we sold 116-28 and got stopped out at 25 for 3 ticks. We sold -28 a second time and got the same result ...stopped at -25 for another 3 ticks. I went for the hat trick and sold -28 once again and I'll be darned I got the same result ... out at -25 for another 3. I was done for the day. Lots of effort, not much result. Another and a better day tomorrow.

The close at 116-24 has us watching 116-16 and 117-00 for launches tomorrow. I want to see atleast 1 attempt to break 116-16 tomorrow. If we get that I will open up for a buy off of 116-16. 117-00 is still off limits.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.200 HI=.210 LO=.190 CL=.195

Flirted around our numbers but not quite there. Same deal for tomorrow.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=73 HI=82 LO=58 CL=76

The opening gap down was not unexpected after checking the electronic session before the open. Put our nubers totalling out of reach.

There's a little band of support just below today's low at 7957-52. A test near or into the range that fails to press lower is a buy with a stop at 7951 and a B/E roll at 7960. The target is 8060. We have a bunch of resistance to contend with to get there so we need to do tight rolls at 7970, 7990, 8020, 8040 and begin the squeeze at 8048. Normally I'd also sell a break below 7952 with a stop at 7959 but not this time. &920 would be the target and the reward does not justify the risk here.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=9.80 HI=3.40 LO=6.40 CL=1.50

I sold 628.00 and out at 627.20 for $80. I next bought 628.30. Had I been little better focused and a little quicker with my deductive thinking I think I could've bought this on about 626.80 or so. I wasn't, I didn't. Had to wait to 28. I bailed on this one at 633.00 for $470. Next up we sold 629.80 and got stopped at 629.90 losing $10. I then sold 629.70 and out at 28.70 for $100. I bought 628.60 and exited at 631.50 for $290 giving us $930 on the day.

The full array of september numbers for tomorrow. Nothing to add at this point.
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5: AUGUST GOLD
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GCQ5 O=9.00 HI=2.60 LO=7.60 CL=1.10

We opened and showed a little weakness but no confirmation of the 430-420 channel. The result is no trade.

$10 channel again tomorrow.
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6: JULY COTTON
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CTN5 O=.35 HI=.65 LO=.10 CL=.29

Boy, they are a sneaky bunch. Gapped right over us at the open ... just enough to put 4715 on the trailer. I'll go with the same numbers for tomorrow lus trade 47.50 either way ... buy or sell.
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7: JULY COCOA
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CON5 O=21 HI=48 LO=10 CL=21

I bought 1421 and was stopped at 1416 for a loss of $50. Nothing but small range after that. Ugly little day.

The volume/OI has crossed over so we'll move to September beginning tomorrow. Sept is trading about 20 points higher is all and I actually like the look of the chart better than July. I'm going to observe only tomorrow and have something for you tomorrow night in the update.
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8: JULY CORN
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CN5 O=2.12 HI=2.17 LO=2.12 CL=2.15

We opened at 2.12 and never looked back. If they'd given me a chance at 2.12 I'd have taken it. No dice. We rocketed to 2.16 and then ground it out to 2.17 before failing a bit near end of day closing at 2.15.

2 numbers for me for tomorrow ... 2.12 and 2.17. I'll sell a break of 2.12 or buy a failed retest there. I'll also sell a failed retest of 2.17 or buy the break out above. Penny and a quarter stops and B/E rolls.
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9: MAY WHEAT
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WN5 O=3.16 1/2 HI=3.20 1/2 LO=3.13 CL=3.13 3/4

A pop up on the open then sideways into a massive failure near end of day. I'll play the TT number tomorrow, 3.13