Thursday, September 08, 2005

Erich's Update for Wednesday, September 7, 2005

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Market Update for Wednesday, September 7, 2005
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Remember, these are posted AFTER the fact in order for non subscribers to follow along and see what we've been doing. Subscribers get these the evening BEFORE the markets open. To get your in good time to plan your trades, go to
http://www.supportandresistance.com/subscribe.html
"Anyone who has never made a mistake has never done anything new." ~Albert Einstein
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1: CURRENCIES
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December Australian Dollar ADZ5
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The December contract is still a little thin and therefore tough to spot resistance on; however I have to admit I am a bit surprised by today's rally - I thought we'd see rates dip. Now that we're trading up here we will probably see a trendline test...somewhere around 7675 is my guesstimate.
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December British Pound BPZ5
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I'm hoping this is the first of a few sessions to send the Pound lower so that we might buy into the market again. Rates might need to *normalize* a bit after last week's big rally.
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December Canadian Dollar CDZ5
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The CD is still in a strong uptrend, but showing a little more weakness, probably brought on by flinching crude prices. We're near an RSI test, so I'll leave this one alone tomorrow. With a bit of luck we'll continue to see the market test support.
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December EuroFX ECZ5
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The Euro gave us a more dramatic reversal today than most of the other currency markets. Like the Pound, I'd like to see the EC fall off a bit to find support, ideally at 124, before taking up the bull trend again.
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December Japanese Yen JYZ5
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The Yen is in a bit of a trading range right now as rates tested resistance near the top of the channel at 9250. If we see a reversal tomorrow there is a good chance we could see rates fall to support at 9050.
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December Mexican Peso MPZ5
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The Peso's getting closer to the contract highs, which means we'll have another chance to sell it very soon. We're very close to an RSI testpoint, which we could get tomorrow. Once we're testing the trendline it will our signal to place a short order.
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December Swiss Franc SFZ5
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A more subdued bounce in the SF than the Euro today as rates fell off from the *other* trendline. Look for rates to continue lower tomorrow as the market looks for support, which might come as early as 8100.

Once we have support we can look for another chance to buy the market long. Just be good for one more day...please!
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December US Dollar Index DXZ5
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Got stopped out shortly after todays open when the market breached the 8535 intraday resistance. We made a little over $600 per contract in this trade, which is pretty good in my books.

Looking for rates to continue higher tomorrow and possible resistance at 8750. Here too I don't think we've seen the end of the down move - at least not yet.
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2: ENERGIES
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October Unleaded Gas HUV5
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Someone pulled the plug on Gas as prices continue lower again today. I'd like to see prices fall all the way to support at 190, but I think that might be wishful thinking. There is some weak daily resistance at 196.25 that might come into play. We'll see tomorrow.
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October Heating Oil HOV5
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Rather small day in HO today as prices traded only slightly lower. Here too I think we are due for more of a pullback so a run to support at 193.90 would get me looking to buy again.
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October Crude Oil CLV5
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I thought the support at 6700 might have enough to it to hold the market up, but I guess not. We're still shy of our RSI test, so I'll hold off for one more session. If we get the test tomorrow I'll look to buy again.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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The ED has entered *channel mode* which it is prone to do after a big session(s). Look for rates to remain choppy the next few days as the market searches for support.
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December mini-DOW YMZ5
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The DOW got a big shot in the arm this morning as the market had a strong rally all day. Pull the short trade for tomorrow as it looks as though the index is heading higher.
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December mini-NAS NQZ5
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The NAS followed the other indices higher today breaking above the 1606 resistance and even testing the 1612 resistance before the end of the day. We might get a reaction to 1612 tomorrow, so I'll hold off for one more day.
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December mini-S&P ESZ5
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Ditto for the S&P.
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4: GRAINS
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December Corn CZ5
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Is it just me, or is corn starting to look more bullish? Prices are still technically in downtrend, but the long the market stay in the channel the greater the likelihood of an upside breakout.
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December Oats OZ5
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Big reversal off the 148 support area today. Today's session is probably a short term hiccup as we haven't completed a rounded top yet.
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September Rice RRU5
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I can't belive how well rice is holding the trendline. It's holding so well that I would look to buy a break of today's high. I wanted to enter on the other side of 700, but this was leaving too much money at risk, so I decided to enter a couple of ticks above the high, and use the strong 692 support to cover the trade.

*BUY November Rough Rice at 699
*Stop 692
*Approximate Risk Exposure: $150 per contract
*Profit Target: 729.5
*Approximate Profit Potential: $610 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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December Soybean Meal SMZ5
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Meal backed off the support line today, but is also right against resistance at 192.5. If we get a reaction here tomorrow I'll sell my brains out on Thursday.
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December Soybean Oil BOZ5
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Bean Oil also bounced today, but not to Meal's extent. I'll run the weekend short trade tomorrow, but I doubt we'll get filled.

*SELL December Soybean Oil at 2277
*Stop 2307
*Approximate Risk Exposure: $180 per contract
*Profit Target: 2141
*Approximate Profit Potential: $816 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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November Soybean SX5
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Beans rallied off support today sending prices further from last week's support. Like meal, we're tossling with some resistance so I'll run the sell order again tomorrow; however I don't think we'll see a fill.

*SELL November Soybeans at 592 3/4
*Stop 598 1/4
*Approximate Risk Exposure: $275 per contract
*Profit Target: 548 1/4
*Approximate Profit Potential: $225 per contract
*RRR: 8:1
*Degree of Risk: Moderate to HIGH
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September Wheat WU5
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A bounce off the neckline of a large rounded top formation - not a real surprise. Look for prices to continue higher before finding resistance and resuming the downtrend. At least thea't the plan for now.
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5: MEATS
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October Feeder Cattle FCV5
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The Cattle rollercoaster continues this week, lead by Feeders. I guess we'll see anothe run at the 111.00 resistance tomorrow.
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October Live Cattle LCV5
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Cattle followed Feeder's higher today. Looks like we might have a trend reversal confirmation as the market made higher support than before. If today's range wasn't so big I would have looked to buy tomorrow, but as it is I think I'll wait.
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October Lean Hogs LHV5
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Hogs look to have found support today, but I'll wait until we get closer to 6450 before sketching out a trade.
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6: METALS
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September Copper HGU5
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Gee, a higher day after a lower day...who would have guessed that? ;-)
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December Gold GCZ5
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Renewed strength in the dollar put the brakes on gold today. I'm running the weekend trade again tomorrow, but we might not get a fill.

*BUY December Gold at 453.1
*Stop 449.7
*Approximate Risk Exposure: $340 per contract
*Profit Target: 469.3
*Approximate Profit Potential: $1620 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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September Silver SIU5
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Silver followed gold's lead today. I also think silver will head higher, but I don't see any numbers I like.
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7: SOFTS
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December Cocoa CCZ5
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Got the hesitation in Cocoa we were looking for today. Do we dare press our luck? Sure, why not? We'll get the market one more day before considering a trade.
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December Coffee KCZ5
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Coffee backed off of resistance again today. I'll run the buy order again tomorrow, but right now things aren't looking all that bullish.

*BUY December Coffee at 106.35
*Stop 104.90
*Approximate Risk Exposure: $543 per contract
*Profit Target: 118.65
*Approximate Profit Potential: $4612 per contract
*RRR: 8 1/2:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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Looks like cotton has confirmed a trend change as well today. Now we need to keep looking for the next buying opportunity...which is probably only a couple of days away.
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November OJ OJX5
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Got the reversal we were looking for in OJ, but prices didn't fall off enough to find our sell order. I'll run the same trade again tomorrow.

*SELL November OJ at 9095
*Stop 9265
*Approximate Risk Exposure: $225 per contract
*Profit Target: 8515
*Approximate Profit Potential: $870 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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I suspect a reversal is coming in sugar. I might be pressing my luck here too, but I'll give it one more day before looking to sell.
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"Tom's Trades" for Wednesday, September 7, 2005

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"Tom's Trades" for Wednesday, September 7, 2005
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Remember, these are posted AFTER the fact in order for you to follow along and see what we've been doing. Subscribers get these the evening BEFORE the markets open. To get your in good time to plan your trades, go to

http://www.supportandresistance.com/subscribe.html

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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=7-15 HI=7-23 LO=7-01 CL=7-04

We opened up the day selling 117-14 only to have it immediately turn higher. We exited at 117-17 losing 3 ticks. We sold -15 on the next break below -16 and exited at -03 for 12 ticks, 9 net after recouping our loser. Our risk was 3 ticks, $93. Our return was $281.

Today's close at 117-04 leaves us looking at 117-00 or 117-16 as the launchpads for tomorrow. I will play 107-08 even if it is the first play available to us. Notice the way it treated -08 during the course of today's action.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.905 HI=.945 LO=.890 CL=.910

We sold 95.920 twice and got stopped at B/E twice. Sold .920 once again and I'm headed into tomorrow short from 95.920 with the stop at B/E.

I really doubt we'll get an opportunity to sell .920 again tomorrow but we'll see. If you didn't pick one off at .920 today I'd be looking at the possibility of selling 95.875.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=03 HI=40 LO=02 CL=12

We didn't see our number as support did what support does ... keeping us from chasing. Same TT weekend numbers tomorrow.
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4: SEPTEMBER SWISS FRANC
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SFU5 O=00 HI=22 LO=88 CL=96

We sold 8097 twice and twice we were stopped at B/E. I'll go after the same TT numbers tomorrow.
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5: SEPTEMBER MINI RUSSELL 2000
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ERTU5 HI=5.10 LO=5.70 CL=4.40

I was asleep at the switch as the window opened and missed a sell off 668. I recovered by buying 668.30. I exited and reversed at 672.70 picking up $440. I exited the reverse trade at 671.20 for another $150. next I sold 672.80 and exited at 671.10 for $170. Sold 672.70 and exited this one at 671.10 also for another $160. I missed the last trade of the day which was a biggy but too late for me.

The full array of all TT numbers for tomorrow.
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6: DECEMBER GOLD
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GCZ5 O=8.50 HI=0.30 LO=7.00 CL=8.60

We sold 448.60 and I bailed at 447.60 for $100. $10 channel for tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.20 HI=.85 LO=.90 CL=.78

We picked off one at 50.60. At 51.07 I rolled the stop to 50.91 and got stopped at 50.85 for 25 points, $125. I missed the balance of the move above there ... that's gonna' happen now and then.

We closed at 51.78. I will buy a retest of 51.50 or 51.00 that fails to go lower and turns back north. I will sell a break back below either of those numbers. I will also buy the break above 52.50 or sell a failed retest there. You can pick up all the needed management from TT. The stop on the break above 52.50 is 52.43.
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8: DECEMBER COCOA
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COZ5 O=35 HI=44 LO=20 CL=40

Nothing for us today; I'll stay with the same numbers for tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.18 1/2 HI=2.22 1/4 LO=2.18 1/4 CL=2.21 1/4

I bought 2.18 1/2. In my best scalper impersonation I exited at 2.21 3/4 pocketing my chump change of 3 1/4 cents, $162.

I 'll play the same TT numbers tomorrow.
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10: DECEMBER WHEAT
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WZ5 O=3.21 1/2 HI=3.25 1/2 LO=3.19 1/4 CL=3.21

Nothing in our ballpark today. Same TT numbers for tomorrow.

Traders Helping Traders Big Weekend Edition

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"Tom's Trades" for Friday, September 2, 2005

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"Tom's Trades" for Friday, September 2, 2005
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I got about half way through writing this update when I reached a conclusion. I will not trade any market tomorrow. There is just too much going on. Take a day off, relax and we'll be back with a vengeance come Monday.

If you have open positions it's OK to keep them on if you choose. If that be your decision make sure you have tight protections in with placed stops. Any thing questionable in your mind ... close it. Our approaches, methods and concepts work best when market conditions are most normal ... this is any thing but ...
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1: DECEMBER 30 YEAR T BOND
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USDU5 O=7-26 HI=8-10 LO=7-18 CL=7-28

An uncharacteristic choppy day in Bonds. I tried twice to sell breaks at -00 but couldn't get a fill. About 10:30 CDT I finally got short at 117-30. Bonds moved swiftly to 117-21 and I was taken out at 117-23 for 7 ticks. About 11:25 I sold again, this time at -27. Bonds moved to lower hitting 117-118. It was very obvious this run was over so I bailed at 117-21 picking up 6 ticks. That was it for the day. Left the table with 13 ticks, $406 on max risk of $187.

Lots of nervousness in many markets for a variety of reasons. Lots of really wicked stories floating about. We need to very careful and management intensive with all trades right now. No trades tomorrow.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.072 HI=.210 LO=.070 CL=.205

A very strong day higher. The financial markets and interest rate sensitive issues such as currencies rocketed higher today on a pervasive belief further interest increases are all but dead. The FED WILL raise them again at the next meeting I believe. We are setting up for a big swift correction lower.

I'm going to put the ED on hold until the weekend at which time I will, most likely, either recommend a switch to Dec 05 or March 06.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=27 HI=74 LO=13 CL=55

A strong continuation of higher prices in the CD. Nothing to do here today. I will not trade tomorrow.
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4: SEPTEMBER Swiss Franc
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SFU5 O=89 HI=92 LO=89 CL=84

The resolution came in the night as the US Dollar was hammered in European and Far East trading. We opened with a gap well above our 8000 target. Nothing done. No trades tomorrow.
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5: SEPTEMBER MINI RUSSELL 2000
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ERTM5 O=7.80 HI=1.90 LO=5.10 CL=8.10

We opened the day with a buy at 668.40 which we exited at 670.20 having achieved the target. We picked up $180. Next we sold 669.60 which I exited at 666.30 banking $330. I then bought 668.40 and exited at 670.20 pocketing another $180. We next sold 669.40 which I bailed on at 670.10 for a loss of $70. I then sold 669.40 again and exited at 666.20 for $320. I couldn't maintain my concentration any longer and quit for the day. We might have missed 1 additional trade ... no biggie.

No trades tomorrow.
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6: DECEMBER GOLD
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GCZ5 O=0.00 HI=9.50 LO=0.00 CL=6.50

Gold opened right on 440 never looked back and never gave us a shot at an entry. NO TRADE Tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.00 HI=.10 LO=.25 CL=.94

I sold 49.45 and exited by choice at 48.50 after we tested 48.30 picking up 95 points, $475. No trades tomorrow.
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8: DECEMBER COCOA
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COZ5 O=14 HI=00 LO=10 CL=96

I bought 1433 and was stopped out at 1427 losing $60. I bought 33 again about a half an hour later and exited at 1480 for $470. No trades tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.17 1/2 HI=2.22 1/2 LO=2.16 3/4 CL=2.22 1/4

A nickel jump in corn ... we'll figure out a course of action over the weekend. No trades tomorrow.
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10: DECEMBER WHEAT
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WZ5 O=3.18 HI=3.23 1/2 LO=3.17 1/2 CL=3.22 1/2

A turn around. Does it have sufficient stuff to make a play higher still? We'll try to figure it out ove rthe weekend. No trades tomorrow.