Wednesday, July 27, 2005

Traders Helping Traders Update for Tuesday, July 26, 2005

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Erich's Update for Tuesday, July 26, 2005
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"Don't be fooled by the calendar. There are only as many days in the year as you make use of." - Charles Richards
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1: SEPTEMBER CORN
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CU5 O=1 HI=2 1/2 LO=7 3/4 CL=0 1/2

Corn headed lower today on a small-ish day. The fact that the market closed near the open shows some indecision. I wouldn't be surprised to see a bit of a bounce, but there's nothing tradable here right now.
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2: DECEMBER COTTON
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CTZ5 O=45 HI=83 LO=10 CL=80

Cotton slowed its ascent today as prices held on to last week's resistance. The current rally still smacks of a pullback but the weekly chart is still holding support. I'm halfways tempted to buy the market above today's resistance; however we're still technically in a downtrend, so I'll wait.
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3: DECEMBER BEAN OIL
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BOZ5 O=65 HI=98 LO=60 CL=96

A slightly bullish day for bean oil today. The market has yet to exceed the 2525 resistance we're watching and we're just shy of an RSI testpoint, so I'm having my doubts about any rallies right now.

Nothing new tomorrow.
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4: AUGUST LIVE CATTLE
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LCQ5 O=00 HI=00 LO=35 CL=75

Sold Cattle from the open as prices dropped quickly right from the start. The quick moving market resulted in some slippage, but not too bad overall. It was a little disappointing to see prices stall after the initial decline however.

Bring exit stops just above today's high, or breakeven for tomorrow. Of course you could leave stops where they are for added flexibility, but I'm not in the mood to give cattle too much room right now.

First profit target is 7607 support.
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5: SEPTEMBER COCOA
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CCU5 O=15 HI=40 LO=12 CL=20

Cocoa made a run to the 1445 resistance today before falling back to where it started. I'd continue with the weekend trades for tomorrow. A break above 1445 should require considerable momentum, but I'm still favouring a move to the downside.

*SELL September Cocoa at 1383
*Stop 1403
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1321
*Approximate Profit Potential: $620 per contract
*RRR: 3:1
*Degree of Risk: Moderate

OR

*Buy September Cocoa at 1447
*Stop 1427
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1507
*Approximate Profit Potential: $600 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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6: SEPTEMBER WHEAT
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WU5 O=27 HI=28 LO=23 1/2 CL=25 3/4

No surprise that wheat tested the 323 support line today. It remains to be seen if prices will hold up here or if the market will trade lower still. I know I said I would sell wheat below the 323 line, but there's a lot of congestion here which is making finding a reasonable entry very difficult.

If you wanted to you could sell below today's low but bear in mind that support at 321 - 322 could pose a problem.

*SELL September Wheat at 322 3/4
*Stop 326 3/4
*Approximate Risk Exposure: $200 per contract
*Profit Target: 310 1/4
*Approximate Profit Potential: $625 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=13 HI=31 LO=99 CL=17

Small day in the Canadian Dollar today. The market is still technically bullish, but just barely. I was a little surprised by today's session, and the lack of upward momentum makes me wonder if we'll see another test of support.

RSI is near a testpoint which will help us tighten our trade, but in the meantime I'll continue to run the weekend plan.

*BUY September Canadian Dollar at 8271
*Stop 8239
*Approximate Risk Exposure: $320 per contract
*Profit Target: 8369
*Approximate Profit Potential: $980 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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8: SEPTEMBER COPPER
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HGU5 O=0.50 HI=1.95 LO=0.10 CL=1.80

Caught a mild move to the upside today in copper. The daily chart looks quite tame compared to the intraday which was much more like a rollercoaster! But prices did clear last week's resistance and found our buy order.

Stop adjustment is a matter of discretion. If you can afford the risk the "best" place for stops is in their original place. If you can't stand the idea of having that much risk on the table bring them below 160, or intraday support at 161.10.

First profit target is resistance at 168.50.
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9: JUNE EURODOLLAR
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EDM6 O=.68 HI=.69 LO=.65 CL=.66

The Eurodollar continued it's decent today after a slight hiccup going into the weekend. We can bring exit stops in a bit if you like above last Friday's high. First support target is 95.55.
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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, July 26, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=5-23 HI=6-03 LO=5-15 CL=5-29

Strong housing numbers started eroding early gains from some early session buying. I bought -25 with a 21 stop. I bailed at 116-00 picking up 7 ticks. I sold -29 and was stopped at -31 for a 2 tick loser. I sold -29 a second time and was stopped out at -21 for another 8 ticks. Total for the day was 13 ticks, $406.

The close at 115-19 puts us on 115-16 and 116-00 for tomorrow. I will [play -24 and -08 if we get a detup the looks like todays complete weakness at -24.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.045 HI=.045 LO=.040 CL=.040

WEe continue to hang in there short from .060 with a stop at .065. It is beginning to wear on me that we can't break .040. It was again the low and the close today. We need to get thru there in the next session or two or my sense is we are safer and more odds favorable to exit and wait out the resolution of the .060/.040 range without being at risk.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=13 HI=31 LO=05 CL=17

I bought one at 8208. When we lifted above 8220 I rolled to 8219 and was stopped at 8214. So we picked up $60. Big whoop. I'll stay with the same 8200 and 8260 numbers for tomorrow. Very difficult trading, bouncing all over the board with not much interest.
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4: SEPTEMBER Swiss Franc
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SFU5 O=52 HI=66 LO=35 CL=54

We bought 7754 and despite rolls and a move to the high of the day we were stopped at B/E. I tried to get one sold when we broke 50 to no avail. Same numbers for tomorrow.
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5: SEPTEMBER MINI RUSSELL 2000
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ERTM5 O=8.50 HI=2.30 LO=1.50 CL=4.50

We sold 679.90 to begin the day. We exited at 678.40 for $150. We then bought 680.40 and bailed at 681.40 for $100. Next in line was a second sell from 679.90 which we exited at 677.50 making $240. Last trade was a sell at 675.00 which we exited at 672.20 for $280. Total take for the day $770.

The full array of numbers from TT for tomorrow.
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6: AUGUST GOLD
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GCQ5 O=4.60 HI=6.00 LO=4.20 CL=5.70

They gave us a little to play with today by virtue of the 424 S&R. I bought at 424.70. I moved out of the trade at 426.10 picking up $140. Same deal for tomorrow ... channel and 424.
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7: DECEMBER COTTON
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CTZ5 O=.45 HI=.83 LO=.10 CL=.80

I sold one at 45 on the initial break of 50 and was stopped at B/E. I did this twice and moved on to other markets in frustration. I'll play the same numbers tomorrow with the additional play of buying a failed retest of 51.50 as well. Barring an opening gap, we are poised right on the 51.85/52.00 play
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8: SEPTEMBER COCOA
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COU5 O=15 HI=24 LO=91 CL=07

I bought 1418. I sold 2 reversing at 1438. We made $200 on the buy. I exited the sell at 1420 picking up another $180. Given the powerful respect the market showed for our lines I thought this was about a 9.5 trade on a 10 scale. I don't see how we could have played it much better than we did. The key was our comittment to our lines and not being tantalized away from them. This is the way it is supposed to work ... text book example of the way I trade. Of course the magic wasn't me, it was, indeed, the substantial way in which the market respected the S&R lines we'd identified.

Same numbers from TT weekend for tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.42 HI=2.43 1/2 LO=2.38 1/2 CL=2.41 1/4

Yet another day of down, down, down. We sold 2.41 1/2. I bailed at 2.39 on what I thought was pretty conclusive proof we were going no lower. We made a whopping $125.

I'll stay with the same number s again tomorrow.
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10: DECEMBER WHEAT
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WZ5 O=3.40 1/2 HI=3.42 1/4 LO=3.38 CL=3.40 3/4

I sold 3.40 3/4. At 3.38 I rolled to 3.39 1/4 and got hit right there for a penny and half, $75. I'll go with the same numbers again tomorrow.