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Erich's Update for Thursday, June 30, 2005
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Scroll down about halfway for Tom's Trades!
"In matters of conscience, first thoughts are best; in matters of prudence, last thoughts are best." - Robert Hall
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1: SEPTEMBER CORN
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CU5 O=1 HI=1 LO=4 3/4 CL=6
Corn clearly outlined support and resistance today as prices traded within the 231 resistance at the 224 support. I'll run the buy order again tomorrow, and since the market is now technically in a downtrend, I'll tack on a sell as well - but I would rather see a buy.
*BUY September Corn at 232 1/4
*Stop 227 3/4
*Approximate Risk Exposure: $225 per contract
*Profit Target: 255 1/4
*Approximate Profit Potential: $1150 per contract
*RRR: 5:1
*Degree of Risk: Low to Moderate
OR
*SELL September Corn at 223 1/4
*Stop 225 3/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 214 1/4
*Approximate Profit Potential: $450 per contract
*RRR: 3 1/2:1
*Degree of Risk: Low to Moderate
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2: DECEMBER COTTON
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CTZ5 O=05 HI=65 LO=85 CL=15
Support held strong for cotton today as prices recovered yesterday's declines. I'm still not convinced that the market won't continue lower, and would like to see a test of support at/near 5300 before looking to buy again. Just watching tomorrow.
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3: DECEMBER BEAN OIL
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BOZ5 O=00 HI=25 LO=75 CL=07
Disappointing day in bean oil as prices ranged just far enough to whipsaw our trade. Too bad too, since I still think we're on the right side of this market; however this close to the holiday weekend I doubt we'll get another chance at it.
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4: AUGUST LIVE CATTLE
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LCQ5 O=00 HI=27 LO=40 CL=55
I was a bit surprised at cattle's session today as I thought we'd see a lot more volatility. As it was the market fell off quite nicely finding our sell order in the process.
You could bring stops to break even for tomorrow, but you might be better off placing them just above 8000 to give the cows a little elbow room.
Profit target is support at 7772, but watch out at 7850.
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5: SEPTEMBER COCOA
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CCU5 O=90 HI=06 LO=88 CL=97
Cocoa gapped our order on the open so you probably didn't take today's sell. Too bad as the market seems to have made a decent move (albeit a small one) to the downside.
I'll be standing aside for tomorrow, but if you did take the trade you might want to leave your stops, or just place them above today's high.
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6: SEPTEMBER WHEAT
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WU5 O=43 HI=45 LO=36 1/2 CL=38 1/2
Wild day in the wheat market as prices fell off hard after a big opening gap. That gap voided our buy order and kept us out of a potentially bad trade - thank you.
Still like wheat long, but we're getting good support showing up as well. Think I'll stand and watch for tomorrow though.
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7: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=26 HI=92 LO=12 CL=54
The Canadian Dollar took off like a rocket shortly after opening range today. The market finally broke the 8150 resistance line, filling our buy order in the process.
Some of the steam went out of the market before closing as prices retraced a bit. We're still long...but barely. I've got my fingers and toes crossed that we will see the 8150 support hold tomorrow.
First target is 8238.
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8: SEPTEMBER SILVER
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SIU5 O=3.5 HI=5 L=6 CL=0.5
Silver continued lower today allowing us to safely bring our stops to breakeven for tomorrow. Our profit target is support at 695.5, but with the weekend around the corner I might adjust that to take profit when/if we see 700.
I certainly don't want to hold silver over a three day weekend!
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9: MARCH EURODOLLAR
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EDH6 O=.035 HI=.07 LO=.005 CL=.02
The Eurodollar found our sell order today as prices broke below yesterday's support. The market wasn't quite as agressive as I had hoped, but you can't have everything.
I'd like to move the stop, but there really isn't much room. You could bring the exit order a few ticks above the close if you have to, otherwise I'd urge you to leave it where it is. Hopefully we'll see a lower session tomorrow.
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Thursday, June 30, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=8-12 HI=9-01 LO=7-30 CL=8-05
It was almost too easy. After a little fake out higher we got about the bidness of sucking that full point out of the price so we'd have some wiggle room for Thursday's "Showtime at the FOMC". We sold 118-29. We ripped right thru -16 so I rolled the stop to -19. At -11 I rolled the stop to -15. I had a theory that if -16 couldn't stop it that -08 probably would, so I began squeezing. At -05 I rolled to -07 and was stopped right there. We picked up 22 ticks, $687. I tried to sell -14 but it never got there stalling out at -13. I sold at -07 and immediately threw in a limit at 118-01. We went to -00 and I got my -01 for another 6 ticks, $187. We were into the fianl hour by that time so I buttoned up shop and moved on.
Tomorrow a ton of stuff is happening ... Chicago Purchasing Manager's Report, FOMC, jobless claims, personal incme and spending and to top things off it is end of quarter and the last chance for portfolio's managers to adjust their positions for reporting purposes. I bet we'll see a bunch of money being parked in Treasuries tomorrow that means buying.
The bottom line for me is time for a 1 day vacation. I will not trade Bonds, Eurodollar, any currency issue, Gold or Russell tomorrow. Normally, I would wait for the announcement on monetary policy, let the market do it's craziness and return to trade after the dust settles. Given the nonsense of the FED last meeting relative to comments and corrections I will not return to trade any of these issues until Friday. Look, I know the FED was counting on me to be back in to support the market in the afternoon. I really hate to let Alan and boys down but, hey, ya' gotta' do what ya' gotta' do, right?
Seriously, I cannot stress strongly enough the wisdom of sitting out tomorrow. There is no way to make any sense of RRR's tomorrow.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.190 HI=.200 LO=.175 CL=.180
We were stopped out yesterday at 96.205 for a whopping $25. I'm done with the Eurodollar until Friday at the earliest.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=26 HI=92 LO=12 CL=54
We had a very curious open. Almost no movement overnight. Following the open we traded in a tight little range for the first hour ... it was like "... you go first, no!, you go first, no, YOU go first ... I know let's get Mikey to go first ..." They talked him into it, the market made a quick 17 point failed dive and then they pounced on poor Mikey ... me included. I bought 8125. We blew right thru 8160 like it wasn't even there. Once that happened you just KNEW it was gonna' power on up to 8180 or 8200. I was ready for 'em. Out at 8181 for $560. Look where we ended the day ... 8154. Gee, what a su-prize.
ON VACATION ... no trading in this market tomorrow. Listen up, repeat after me ... "My account is NOT a Timex. It does NOT take a lickin' and keep on tickin'"
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=4.60 HI=6.40 LO=2.40 CL=4.30
An ugly day if you the truth. Not much to work with in an idex when you have a $400 daily range. I sold 645.70 for my first trade and got stopped out at B/E. I did the same trade a second time with the same result. Did it a third time, better result. We went to 642.40, I bailed at 643.20 for $250. That was it for the day.
No trading tomorrow in this market.
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5: AUGUST GOLD
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GCQ5 O=6.50 HI=9.60 LO=6.20 CL=8.60
All we could do was sit and watch a $300 climb. It finally did give us a confirmation. Not the strongest one I've ever seen but, a confirm just the same. It also came late enough in the day to be suspect. Whenever they come at the end of a long climb back and late in the day you really have to think no trade. This was borderline so I was slow on the draw. When it hit 438.60 I was thinking I'd take it. Gold immediately turned and headed north. So, although we had a confirm, Gold failed to follow thru with a break out of the decision zone.
No trade today, NO TRADE TOMORROW.
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6: DECEMBER COTTON
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CTZ5 O=.05 HI=.65 LO=.85 CL=.15
Cotton! Nice reversal, Dude! Geesh. I can't believe I did that! I made a big dang point of big, fat round numbers LIKE 54.00 and then didn't discuss it as an entry point. Wake up, Tom! It was so obvious. My bad, gang. We should have been all over it like white on rice. I bought it at 55.05 and bailed at 55.50 for 45 points, $225.
We'll add 54.00 and 55.50 to the numbers from last week. 53.50, 53.00, 52.50, 52.00 and 51.50. We'll play any of them tomorrow, either way, buy or sell.
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7: SEPTEMBER COCOA
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COU5 O=90 HI=06 LO=88 CL=97
Nothing for us today. 1520 and 1585 remain alive. I'll also play 1475 and 1500 tomorrow.
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8: JULY/DECEMBER CORN *** FND IS TOMORROW ***
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CN5 O=2.20 1/2 HI=2.21 1/2 LO=2.16 1/4 CL=2.18 1/2
CZ5 O=2.40 3/4 HI=2.41 1/2 LO=2.35 3/4 CL=2.37
We pushed it right to the last day. Tomorrow is FND in July. I*'m going to trade December beginnig tomorrow. In part I am skipping over Sept because we already have a bull call spread in September so I think it may be beneficial to spread it out a bit.
I sold 2.19 3/4 today right after the open and jumpoed ship at 2.16 after it spent about 15 minutes going sideways there. That was good for 3 3/4 cents, $187.
Tomorrow in the December I will sell a break below 2.36 or buy the failed to press lower as it rises above. If we bypass 2.36 I will do the same thing with 2.33 blow and 3.38 above.
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9: MAY/DECEMBER WHEAT *** FND IS TOMORROW ***
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WN5 O=3.34 HI=3.34 LO=3.26 CL=3.28 1/2
WZ5 O=3.56 1/2 HI=3.56 1/2 LO=3.49 CL=3.51
Same deal as Corn, FND is tomorrow, roll it out to December.
Nasty little start to the day. Some big volatility was present at the open. I sold 3.30 1/2 and got stopped at 3.32 losing a penny and a half, $75. I sold 3.30 1/2 again with a little better result. I was stopped out of this one at 3.28 1/2 for 2 cents, $100.
I'll play 3.50 either way tomorrow and that's it..
