Wednesday, August 10, 2005

Traders Helping Traders Daily Update for Tuesday, August 9 2005

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Erich's Market Update for Tuesday, August 9, 2005
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Scroll down about halfway for Tom's Trades.
"The secret of success is constancy of purpose."
- Benjamin Franklin
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1: CURRENCIES
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September Australian Dollar ADU5
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The Aussie broke the RSI trendline in a big way today
so we might expect lower rates to follow. Tomorrow is
the big FED announcement so we'll stand aside.
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September British Pound BPU5
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Darn opening gaps! We had the right idea about the Pound
but the market gapped our entry (again). Standing aside
for tomorrow, although I do think rates will continue
higher.
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September Canadian Dollar CDU5
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The CD rallied a bit today, but it was a funny day as the
market closed rather low. We're up against solid resistance
on the high in the 8270 region and if it wasn't for the
FOMC report out tomorrow I'd be buying.
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September EuroFX ECU5
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Interesting day in the Euro as the market stalled and traded
within last week's ranges. Not a big surprise given the FOMC
report tomorrow, but the small day gives us an opportunity
to bracket the range and trade the breakout.

NOTE: the FED report is a biggie and should drive the market
higher or lower; however it is also risky trading a report
day.

*BUY September EuroFX at 124.33
*Stop 123.83
*Approximate Risk Exposure: $625 per contract
*Profit Target: 126.93
*Approximate Profit Potential: $3250 per contract
*RRR: 5:1
*Degree of Risk: HIGH

OR

*SELL September EuroFX at 123.09
*Stop 123.63
*Approximate Risk Exposure: $675 per contract
*Profit Target: 121.07
*Approximate Profit Potential: $2525 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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September Japanese Yen JYU5
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The Yen also stalled today, but the plan from the weekend
still seems sound so we'll run with that tomorrow.

*SELL September Japanese Yen at 8939
*Stop 8957
*Approximate Risk Exposure: $225 per contract
*Profit Target: 8847
*Approximate Profit Potential: $1150 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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September Mexican Peso MPU5
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The Peso backed off a little today, but that's not a
real surprise either as the market was due for a pullback.
We'll run the weekend trade again tomorrow and if we don't
see support, then we'll adjust the trade accordingly.

*BUY September Mexican Peso at 94.075
*Stop 93.575
*Approximate Risk Exposure: $250 per contract
*Profit Target: 97.750
*Approximate Profit Potential: $1837 per contract
*RRR: 7:1
*Degree of Risk: HIGH
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September Swiss Franc SFU5
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Talk about indecisive! Did you see today tiny range in the
Swissy? This kind of thing in a currency like the Swiss Franc
just begs to be bracketed. Since the range is so small I'm
giving the market plenty of leeway on either side to help
avoid a bad fill. This looks like it could be a good trade
tomorrow.

*BUY September Swiss Franc at 7983
*Stop 7963
*Approximate Risk Exposure: $250 per contract
*Profit Target: 8097
*Approximate Profit Potential: $1425 per contract
*RRR: 5 1/2:1
*Degree of Risk: HIGH

OR

*SELL September Swiss Franc at 7947
*Stop 7963
*Approximate Risk Exposure: $200 per contract
*Profit Target: 7877
*Approximate Profit Potential: $875 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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September US Dollar Index DXU5
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No surprise the US index stalled today as well and while
rates seems slightly bullish on the surface there's no
telling exactly how the market will interpret tomorrow's
FOMC report. We've got better setups in some of the
foreign currencies so I'll pass on this one, but it
is essentially a channel formation if you wanted to
bracket the resistance and support and trade the
breakout.
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2: ENERGIES
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September Unleaded Gas HUU5
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Needless to say I'm kicking myself today that I didn't
put on the Gas trade I was contemplating. A "textbook"
breakout sent prices on a beautiful rally today. I'm
hoping for another chance to buy in a day or two.
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September Heating Oil HOU5
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Cha-CHHING! Beautiful day in Heating Oil more than made
up for the missed move in Gas. The market made a nice
clean rally right from the open easily finding our buy
order.

We really need to do something with our stops however,
as we've got a little over $2000 in accumulated profits
per contract as of the close. You might consider placing
stops below the intraday support at 178 or even 177.70
but I don't think I'd be willing to give up too much more
than that!

First profit target is resistance at 181.35.
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October Crude Oil CLV5
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Almost had two in a row in the energies today, but crude
gapped our entry voiding the trade. Looking for the next
good buying opportunity - maybe in a day or two.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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The ED continued lower today voiding our new trade
but earning nice profits for the existing trade.
The FED report will affect this market tomorrow so
I'm placing stops above today's high in case we see
a reversal. First target is support at 95.345.
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September mini-DOW YMU5
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The Dow dipped a little today, but didn't quite get
to our 10500 support target. I'm standing aside tomorrow
until we get a better idea of what is happening, but
right now we're technically bearishy.
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September mini-NAS NQU5
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The NAS also fell off today, but like the Dow didn't
find our support target yet. Standing aside for tomorrow
until we see what happens next.
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September mini-S&P esU5
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The mini-S&P continues to test the trendline. I was hoping
to see a bit of a bounce today, but it didn't come. Standing
aside for tomorrow as well.
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4: GRAINS
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September Corn CU5
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Corn gave us the reaction to the 220 resistance we were
looking for today. This means that we can once again look
to sell the market below the support line. I would give
prices a little extra room however, and enter below the
218 level.

First profit target is monthly support at 204.

*SELL September Corn at 217 3/4
*Stop 221 3/4
*Approximate Risk Exposure: $200 per contract
*Profit Target: 205 1/4
*Approximate Profit Potential: $625 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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September Oats OU5
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Oats gave us a moderate bounce off the 62% retracement
line today. We might see the market continue higher
tomorrow in which case we'll have to re-work our trade
but for the time being I'm looking to sell support.

*SELL September Oats at 152 3/4
*Stop 156 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 141 1/4
*Approximate Profit Potential: $575 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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September Rice RRU5
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Rice stalled a bit today, which normally isn't good
news for the bulls; however I'll continue with the
weekend trade just in case we see the trend break
resistance.

*BUY September Rough Rice at 692.0
*Stop 681.5
*Approximate Risk Exposure: $210 per contract
*Profit Target: 727.5
*Approximate Profit Potential: $710 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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September Soybean Meal SMU5
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Ouch! Definitely NOT the way I wanted to start this
week - a $500 opening gap! Just one more reason I
usually avoid taking home a position over the weekend.

Lesson learned. Nothing here tomorrow.
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December Soybean Oil BOz5
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Bean Oil continues to flounder alternating higher and
lower sessions. I can't see anything I'm too interested
in trading at the moment.
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September Soybean SU5
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Not much happening in beans right now as prices are pretty
much without trend, although they are technically bearish.
This is normally the weakest time of the year for beans so
we'll see if prices show signs of recovering in the next
couple of days.
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September Wheat WU5
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Wheat was a little more aggressive to the upside than
corn today, although prices did fall off before the close.
If we see another lower session tomorrow I'll look to sell
again on Wednesday. If you're currently short, place exit
stops above today's high.

First profit target is support at 310 1/4.
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5: MEATS
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October Feeder Cattle FCV5
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Huge decline in Feeder's today. I'm not sure what sparked
the big drop in prices but it is likely to continue into
tomorrow. Support at 105.85 is making me a little apprehensive
about selling tomorrow, but if prices continue lower and
find support we'll give it another look.
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October Live Cattle LCV5
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I guess I should have gone with my "gut" and taken the
cattle trade after all. ;-)

Big down day in cattle as prices easily broke support. We're
up against solid support again and the trick is to try and
stay on the right side of the market tomorrow. Prices will
make a run at the 8050 support line, so be sure to stay away
from there and enter below it. Next profit target is weekly
support at 7850.

*SELL October Live Cattle at 8042
*Stop 8092
*Approximate Risk Exposure: $200 per contract
*Profit Target: 7855
*Approximate Profit Potential: $750 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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February Pork Bellies PBG6
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Like they say in the ganster movies "Fuggedabouit"...
at least until we see support at 8180.
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October Lean Hogs LHV5
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Hogs reversed and took us out of our long trade from last
week. I was a little suspicious of the flimsy fill we got
and my suspicions were confirmed today. We'll probably see
the market dip a little lower over the next few days, but
I'm not convinced that the bulls are done - yet.

This is a traditionally weak time of the year for this market
so we might entertain a sell if prices get much lower.
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6: METALS
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September Copper HGU5
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Copper continued a little lower today, as we thought
it might. I'll continue to run the weekend trade in
case we see an early reversal, but if prices continue
lower we'll adjust the figures a bit.

*BUY September Copper at 167.50
*Stop 166.30
*Approximate Risk Exposure: $300 per contract
*Profit Target: 174.80
*Approximate Profit Potential: $1825 per contract
*RRR: 6:1
*Degree of Risk: Moderate
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August Gold GCQ5
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I'm a little surprised to see such an active day in gold
before the FOMC report. Gold has a tendency to move
opposite the Dollar, so the report should affect this market
as well.

Standing aside for now.
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September Silver SIU5
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Just your typical $1000 day in silver - geesch! Like gold,
I'm surprised silver moved so far today. We're up against
strong support again, so I would hope to see a slight
adjustment tomorrow which will give us another chance
to sell.
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7: SOFTS
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September Cocoa CCU5
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Cocoa easily found our sell order today as the market
continue lower through support. There is enough room
to bring stops to breakeven if you like, but if you
can afford the risk you might want to leave them at
1451 for one more session.

First profit target is support at 1385.
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September Coffee KCU5
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Nice day in coffee as the market cleanly broke support at
the 104.00 line. We have $600 in accumulated profits as of
the close so you'll have to decide how tight you want to
make your stops. A pullback to the 104.30 area is likely
so if you're trying to "ride" the trade put stops just above
here, otherwise put them a little above the close.
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December Cotton CTZ5
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Got filled in our cotton short today as prices broke last
week's support. The "best" stop placement is still the
original 5187, but if you wanted to tighten the trade a
bit you could use the otherside of 5150 to cover the trade
- just don't make it too tight!

First profit target is support at 4947.
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September OJ OJU5
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OJ showed us support at 9700 today. I'm not too crazy about
selling from here; however a break below 9700 will hopefully
see the market continue lower still. First profit target is
solid support at 9150 where we are almost guaranteed a bounce.

*SELL September OJ at 9690
*Stop 9850
*Approximate Risk Exposure: $240 per contract
*Profit Target: 9150
*Approximate Profit Potential: $800 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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We're still hanging in with our sugar trade as the market
showed us very slight support today. Hopefully prices will
rally tomorrow so we can bring our stops up a bit, but for
the moment we have to leave things as they are.
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"Tom's Trades" for Tuesday, August 9, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=114-03 HI=114-09 LO=113-29 CL=113-30

As we surmised volume WAS light and we WERE very much range bound with just an 11 point range We clearly had our work cut out for us if we were to make anything toward the stone floors today.

I bought -03 and bailed at -05 for plus 2 ... pretty impressive, no? I bought -03 again and bailed at -08 on a limit order when we ticked -09. We made 5. I then sold -07 and exited at 114-01 for 6 more. Done for the day with a total of 13 ticks, $406.

REMEMBER >>> FED MEETING TOMORROW!!

With the close at 113-30 I'll begin the day stalking 113-16 and 114-00. I expect to see a bit of up early on. I expect light volume and range bound to be the order of the morning. Play it but be gone no later than 12 noon Central. We all in agreement here? Gone means flat, no position. Any confusion? Good!

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2: SEPTEMBER EURODOLLAR
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EDU5 O=95.995 HI=96.005 LO=95.995 CL=96.000

Nice!! I like it! We retain our short trade fro 96.020 established on Friday. 95.970/.975 is the next "what's most likely" on our scope. I'll protect pretty aggressively there. If you are not in all ready ... I'd wait until after the FED meeting were I you.

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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=8262 HI=8272 LO=8240 CL=8249

The big gap up took everything off the table for us. I'll go with the same numbers for tomorrow ... 8200 and the 8235/30 range. I'll also play off 8280 only to the sell side.

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4: SEPTEMBER Swiss Franc
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SFU5 O=7939 HI=7988 LO=7931 CL=7975

Never saw our ambush point. Same 7930 for tomorrow.

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5: SEPTEMBER MINI RUSSELL 2000
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ERTM5 O=665.00 HI=668.20 LO=659.70 CL=661.80

First trade was a buy at 665.50 which I exited at 667.50 for $200. Next we sold 664.60 and exited at 662.10 for $250. Done for the day.

The full array of TT numbers for tomorrow plus we'll add 668 to the mix.

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6: DECEMBER GOLD
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GCZ5 O=441.50 HI=445.00 LO=441.40 CL=443.70

We sold 442.60. I rolled the stop to B/E as we went thru 442.00. We pulled up just shy of 441.00. If that had broken I'd have rolled the stop to 442.10. It broke again late in the day. I bailed at 440.20 for $240.

$10 channel and 443 again tomorrow.

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7: DECEMBER COTTON
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CTZ5 O=51.55 HI=51.73 LO=51.23 CL=51.25

I sold one at 51.45 and was stopped out at 51.50 for a $25 loss.

All the same numbers from TT and this weeks updates again tomorrow plus we'll add
51.00.

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8: SEPTEMBER COCOA
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COU5 O=1460 HI=1463 LO=1428 CL=1430

We saw a chance to sell 1440 but it came too late in the day and at the end of a substantial run to the downside. I passed. We clsoed at 1430 so I'll have 1440 in my sites tomorrow.

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9: DECEMBER CORN
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CZ5 O=2.35 HI=2.39 1/2 LO=2.35 CL=2.35 3/4

I bought 2.37 1/4 and was stopped at B/E. Same TT numbers for tomorrow.
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10: DECEMBER WHEAT
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WZ5 O=3.38 1/2 HI=3.40 LO=3.36 1/2 CL=3.37 1/2

I bought 3.38 1/2 and sold 3.37 1/2. One stopped at B/E and the sell at 3.38 for a $25 loss. Same TT numbers for tomorrow.