Thursday, July 28, 2005

Traders Helping Traders Daily Update for Wednesday, July 27, 2005

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Erich's Update for Wednesday, July 27, 2005
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Hot off the commodity presses to you!
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1: SEPTEMBER CORN
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CU5 O=5 HI=8 3/4 LO=3 CL=4 1/4

Corn rallied today to the 239 resistance before falling off considerably. The lack of direction in this market is getting frustrating to say the least. Every time something promising develops the market makes a left turn into no-man's land.

Nothing here tomorrow.
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2: DECEMBER COTTON
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CTZ5 O=75 HI=90 LO=40 CL=89

Cotton tested the resistance on the 50% level before falling off today. Prices still seem to be in pullback mode, as evidenced by the lack of volume with higher prices. If we see a lower session tomorrow, to confirm the resistance, then I'll look at trying to short again.
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3: DECEMBER BEAN OIL
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BOZ5 O=20 HI=45 LO=68 CL=69

Bean Oil blew through our 2525 resistance briefly today before reversing and falling off again. The low closing price suggests another lower session tomorrow. Call me "chicken" but I'll wait for confirmation of the resistance before selling.
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4: AUGUST LIVE CATTLE
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LCQ5 O=75 HI=35 LO=60 CL=15

Darn Cattle bounced off support today to find our exit stops and take us out of the trade with a $60 loss per contract. This is the second time in as many weeks that we've been stopped cold in a cattle short, so it's looking very much like a rally is in store.

This is also the first time we've seen the market make higher support, which would also suggest a rally might be around the corner.

While we could buy above today's high, I'm going to give the market a break. Things are quite unpredictable lately and I normally cool it the day after a loss.

Maybe Thursday.
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5: SEPTEMBER COCOA
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CCU5 O=20 HI=38 LO=20 CL=37

Cocoa continues to channel within the tight range of the last few weeks. RSI is getting higher which puts pressure on the bulls to perform, otherwise the indicator will drift into overbought territory and favour the bears again.

I still prefer the downside in this trade; however I won't argue if prices want to rally. Running the same trade again tomorrow.

*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=28 1/2 HI=33 1/2 LO=26 1/2 CL=28 1/2

A very indecisive day in the wheat market today as prices finished exactly where they began. This is another market that is making me crazy, trading higher one day and lower the next. It's obvious that there is no established trend here right now, but I will consider selling a break of support as prices are technically bearish.

*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=72 HI=82 LO=33 CL=41

I smell an opportunity brewing in the Canadian Dollar market as rates fell off to test support in the 8120 region. The market came up a little shy of the actual support level, but it's close enough for me - especially if we see a bounce off support tomorrow. That could make for a VERY good buying opportunity!
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8: SEPTEMBER COPPER
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HGU5 O=1.55 HI=2.05 LO=0.25 CL=0.60

Depending how tight you moved up your stops today you may, or may not have been taken out of the trade. If you did get hit, the loss would be a small one, but if you're still long leave the stops where they are as we're testing the RSI trendline and I would hope to see a bounce.

First profit target is resistance at 168.50.
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9: JUNE EURODOLLAR
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EDM6 O=.67 HI=.675 LO=.65 CL=.655

Small day in the ED today, probably in anticipation of a housing start report due out tomorrow. If we do see the market back up it might be a good time to take what we've got in profits so far and look for a chance to re-enter.

Bring exit stops in above Tuesday's 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 Wednesday, July 27, 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

Tough day. I bought 115-22 and got stopped at -19 losing 3 ticks. Bought 21 and was stopped at B/E. I sold -23 and was again stopped at B/E. That was it for the day.

Tomorrow we have Durable Goods, new homes sales and the FED Beige Book coupled with the 2 year auction. I'll not trade the first half an hour and then see where we are. With the close at 115-21 we'll be set up on 115-16 and 116-00.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.040 HI=.045 LO=.035 CL=.040

I'll stay with our short from .060 trade one more day.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=72 HI=82 LO=33 CL=41

The gap lower open took us beyond tradeable numbers. Nothing done. For tomorrow I will sell a break below 8140 or buy a break above 8160.
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4: SEPTEMBER Swiss Franc
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SFU5 O=17 HI=40 LO=05 CL=34

The gap lower kept us sidelined. We'll stay with 7750 for tomorrow but also buy a retest of 7700 on a failure to punch lower as it turns back north.
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5: SEPTEMBER MINI RUSSELL 2000
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ERTM5 O=4.20 HI=8.90 LO=1.30 CL=6.50

We began by selling 674.80. We rolled the stop to 673.10 and got hit there. Out with $170. I then bought 673.50 and exited at 676.40 for $290. Sold 674.80 and was stopped at B/E. Next up we sold 674.70 and exited at 672.10 for $260. We bought 673.30 and exited at 674.70 for $140. One of the nicest moves of the day was a run from 673.60 to about 678.40. It started from a point too high to use 673 so I had to wait until it dealt with 675. We bought 675.30 and exited at 677.80 picking up $250. Total for the day was $1110.

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

We sold 424.00 and out at 423.10 as we'd rolled there once we dipped into 22 territory. We picked up $90. Same deal for tomorrow ... 424 or the $10 channel.
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7: DECEMBER COTTON
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CTZ5 O=.75 HI=.90 LO=.40 CL=.89

I bought at 52.10 and exited at 52.50 picking up 40 points, $200. We'll play the same numbers tomorrow as we settled at 51.89.
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8: SEPTEMBER COCOA
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COU5 O=15 HI=24 LO=91 CL=07

We bought at 1422 and exited at 29 for $70. We sold 1422 again later in the day and chased it up to the close. I exited at 1437 as it was clear we had run out of steam. We picked up another $150.

Same numbers from TT weekend for tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.45 HI=2.49 1/4 LO=2.43 1/2 CL=2.45 1/4

The gap up open leapfrogged our price so we sat and watched. The market made a run to .49 but couldn't hold it closing at 2.45 1/4.

I'll stay with the same number s again tomorrow. I will also sell a failed retest of 2.46 or buy a break above 2.46 1/2.

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10: DECEMBER WHEAT
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WZ5 O=3.42 HI=3.47 1/2 LO=3.40 1/2 CL=3.43 1/2

A little gap up on the open took us just beyond our target. Had it hung out there for a while I would have jumped it anyway at 3.42. It took off immediately to the north.

We'll stay with 3.41 as suggested in TT weekend. I will also buy a break above 3.45.
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