Thursday, September 22, 2005

"Tom's Trades" for Tuesday, September 20, 2005

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"Tom's Trades" for Tuesday, September 20, 2005
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We have an FOMC meeting to contend with tomorrow. Holiday in the Russell, the currencies and Gold. I will trade the bonds but will be flat and gone by 12:30 CDT.
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=4-26 HI=4-31 LO=4-18 CL=4-27
It took a while to get there but finally we bought at 114-21. It backed up on us quickly and stopped us out at -19 for a loss of 2 ticks. We bought -21 a second time with better results. We zoomed to -31 and failed. I exited at -29 for 8 ticks, 6 net. I sold -28 and was stopped at B/E.

With a close at 114-27 we are poised for action tomorrow at 115-00 and 114-16. If you get great setups on -24 or -08 trade them. We are done trading at 12:30 tomorrow because of the FOMC Meeting.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.735 HI=.780 LO=.720 CL=.770

I sold 95.725, I reversed the trade at 95.735 losing $25 on the short trade. We climbed nicely to .780. As we broke 95.775 I rolled to .755. I now sit long from .735 with my stop at .755 looking for .850 to show.

For tomorrow, those on the sidelines might want to watch for a move to .800 and sell a failure there or at .850. If we get the failure at .800 I will have my stop pretty tight there so any failure will get me and I'll probably be reversing or selling there as well. Just use the numbers in reverse from TT. If we press 780 again tomorrow and fail I will reverse there closing out the long and initiating a short trade. I'm going to hold my trade thru the fomc meeting.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=98 HI=98 LO=95 CL=78

All it did was open and chug higher. Nothing done. I'll stay with the TT numbers until we get some structure up here or until we fall back to 8500. No trades in CD period tomorrow as we'll sit it out on the sidelines due to FOMC.
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4: SEPTEMBER SWISS FRANC
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SFU5 O=86 HI=04 LO=72 CL=91
We gapped lower at the open and never got close to our numbers. I'll stick with them 1 more day. It has reversed now though ... a break ABOVE and a FAILURE to press higher not lower.

NO TRADES TOMORROW IN SF.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=4.80 HI=5.70 LO=8.70 CL=1.70

The trading window opened with the market bouncing around 675-674. We opened the day buying 674.40 and getting stopped out at .30 on a B/E stop losing $10. We did the same trade a second time and got tossed at .40 for B/E. Next we sold 673.70. This one I managed to exit at 672.30 for $140. I tried twice to buy 672.40 or so and failed to get it both times. Third time wa sa charm as we bought 672.50. Predictably it ran out of gas at 674 where I exited, 674.00 for $150. I then sold 673.70 and rode it to 672 where we exited at .20 for $150. I sold 671.70 and exited at 672.10 losing $40. At this point I took about an hour break to recharge the batteries and work on some less demanding trades. I bought 672.40 and exited at 673.10 for $70. We then sold 671.70 which I bailed on at 670.00 for $170. We were a little premature n our exit as I panicked a little when we bounced so hard off 669.30. I quit at that point.

All the TT numbers for tomorrow. I see no new numbers.

I'll trade the Russell tomorrow in the morning. OUT and flat and stay that way for the balance of the day due to FOMC. Be done by 12:30 CDT
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6: DECEMBER GOLD
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GCZ5 O=7.70 HI=2.40 LO=6.70 CL=0.40

No buy zone for now. Another big gap higher. Sells only off the $10 gold channel for tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.40 HI=.00 LO=.11 CL=.98

I bought 50.60 on the break above 50.50. I exited at 51.10 for for $250. I bought again at 51.10 and exited at 51.40 on the failure at 51.50 for another $150. As volume picked up in the last hour I bought 1 at 51.55 and exited at 51.90 for $175. A nice day. Hectic, but nice.

Same numbers from TT again tomorrow. I will also buy a failed retest at 49.50 as it turns and heads north. The stop is 49.37.
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8: DECEMBER COCOA
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COZ5 O=60 HI=75 LO=56 CL=71

Big gap down. Nothing for us today. I'll stick with the TT numbers
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9: DECEMBER CORN
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CZ5 O=2.07 1/2 HI=2.07 1/2 LO=2.05 3/4 CL=2.06 1/4

I'm very tempted to buy another retest of 2.06 anything. I'm also very suspicious. I'll sit tight another day.
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10: DECEMBER WHEAT
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WZ5 O=3.24 HI=3.26 1/4 LO=3.20 CL=3.201/4

I sold 3.25 1/4 and was stopped out at 3.24 for a penny and a quarter. Later in the day came the whuppin' as we tapped 3.20. I couldn't get in off those numbers. Shoot. Same numbers for tomorrow.

Erich's Update for Tuesday, September 20, 2005

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Market Update for Tuesday, September 20, 2005
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"Permanence, perseverance and persistence in spite of all obstacles discouragements, and impossibilities: It is this, that in all things distringuishese the strong soul from the weak." - Thomas Carlyle
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FYI
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I'm very sorry I wasn't able to get a weekend update this last week. We'll try to catch up on some of the markets today, although a few have made some pretty big moves today. -Erich
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1: CURRENCIES
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December Australian Dollar ADZ5
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I'm trying to be patient with the Aussie Dollar, but the market just isn't giving me anything to trade off of. Standing aside for tomorrow.
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December British Pound BPZ5
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The BP held it's ground today as RSI is giving us a testpoint. This is the third test of the trendline and should yeild a bounce - I hope. You should cover this trade both ways, as it's tough to tell if we'll get a break or bounce.

*BUY December British Pound at 180.47
*Stop 179.77
*Approximate Risk Exposure: $437 per contract
*Profit Target: 183.97
*Approximate Profit Potential: $2187 per contract
*RRR: 5:1
*Degree of Risk: HIGH

OR

*SEE December British Pound at 179.27
*Stop 180.03
*Approximate Risk Exposure: $475 per contract
*Profit Target: 176.53
*Approximate Profit Potential: $1712 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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December Canadian Dollar CDZ5
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The CD took off like a rocket off last week's RSI test. Did you see it? I hope so. Now that the market is underway we need to be thinking "buy" again...just be sure to wait for the right time to get in.

I'll give you a hint, it's not tomorrow.
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December EuroFX ECZ5
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Not much we can do with the Euro right now except to keep watching and waiting.
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December Japanese Yen JYZ5
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The Yen has been quite frustrating to trade. It seems everytime we get a good setup the market gaps us. Today is not a good setup; however if we see support continue to hold I might have a go at selling before the weekend.
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December Mexican Peso MPZ5
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The Peso seriously flinched after encountering the 90.550 line today. This will be our entry for shorting the market tomorrow, if rates reverse and head lower. It's not the best trade, but certainly doable.

*SELL December Mexican Peso at 90.475
*Stop 91.025
*Approximate Risk Exposure: $275 per contract
*Profit Target: 88.425
*Approximate Profit Potential: $1025 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December Swiss Franc SFZ5
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I'm thinking that the Swissy is due for a bit of a pullback this week given the big declines the market made last week. If we do get a pullback we'll look at trailing a sell order.
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December US Dollar Index DXZ5
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The USD is fighting the 8850 resistance and still has not managed a sustained break above here. This might be enough to send the market lower again tomorrow.
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2: ENERGIES
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October Unleaded Gas HUV5
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Just your typical $8000 range in Gas today. Today's huge rally is likely to send the market higher tomorrow, but where do you get in?
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October Heating Oil HOV5
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Same for Heating Oil...
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October Crude Oil CLV5
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...and Crude.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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The ED held the trendline pretty well today, so I might look at buying the break of resistance above the market. This is certainly an agressive strategy, especially since I'd rather be selling.

*BUY June Eurodollar at 95.765
*Stop 95.695
*Approximate Risk Exposure: $175 per contract
*Profit Target: 96.045
*Approximate Profit Potential: $700 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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December mini-DOW YMZ5
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I'm sorry, but I just can't get a feel for what's happening in the stock indices lately. They are extremely choppy and this is making it very tough to get a handle on them. Guess I'll just keep watching.
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December mini-NAS NQZ5
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Same thing for the NAS.
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December mini-S&P ESZ5
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And the S&P.
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4: GRAINS
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December Corn CZ5
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The small sideways channel is almost too much to bear. I'll look at bracketing the channel and trading a breakout either way, but I would prefer a move to the downside with the trend.

*SELL December Corn at 204 3/4
*Stop 207 1/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 195 1/4
*Approximate Profit Potential: $475 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate

OR

*BUY December Corn at 209 1/4
*Stop 205 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 220 3/4
*Approximate Profit Potential: $575 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Oats OZ5
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Yuck! What a day in Oats. I think it's best we avoid this market for a while...it's all over the place!
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November Rice RRX5
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Rice continues to stall at the 676 resistance line which makes me more serious about selling the market tomorrow. I'll look to short below last week's support at 669, and cover above the 676 line.

*SELL November Rice at 668.5
*Stop 676.5
*Approximate Risk Exposure: $160 per contract
*Profit Target: 640.5
*Approximate Profit Potential: $560 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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December Soybean Meal SMZ5
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If you brought your stops in you would have been tagged out today with a tidy little profit. If you at still trailing your stops you'll want them above today's high in case of a hiccup.
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December Soybean Oil BOZ5
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Big reversal in Bean Oil stopped us out with a measely $120 in profit for all our hard work. Looks like BO's heading higher though, at least for the short term.
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November Soybean SX5
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The big Bean market also backed up and tagged our stops, but with a little more money in the bank: $800 profit per contract. I'll give the market one more day before looking to sell again.
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December Wheat WZ5
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Wheat's another market that is all over the place. I'd really like to take a trade here but I don't see anything I like.
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5: MEATS
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October Feeder Cattle FCV5
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Feeder Cattle broke RSI support the other day, but today's session shows the market continuing to hold the price support line. This makes me think that we could see the market rally very soon, and if it does I want to try and be there.

I'll look to buy the market above secondary resistance and cover the trade below the resistance on today's high. It's a risky trade to say the least, but the payoff is good if it works.

*BUY October Feeder Cattle at 114.025
*Stop 113.425
*Approximate Risk Exposure: $300 per contract
*Profit Target: 116.925
*Approximate Profit Potential: $1450 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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October Live Cattle LCV5
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Cattle is giving us a similar setup; however we've got resistance at 8650 which is getting in the way of buying tomorrow. I might hold off another day to see how prices react to 8650, if at all.
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December Lean Hogs LHZ5
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Hogs seem to be showing us some support near the 6135 area; however I'm not sure I want to buy again just yet.
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6: METALS
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December Copper HGZ5
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Copper made a big move to the upside today...but nothing we can take advantage of.
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December Gold GCZ5
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A very disappointing day in gold. I was looking for another chance to buy gold and was sincerely hoping we'd see a bit of a setback today, but it didn't happen. Still on the sidelines for now.
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December Silver SIZ5
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Silver followed gold higher, and like gold I'm looking for another place to buy.
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7: SOFTS
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December Cocoa CCZ5
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Darn cocoa won't give us the support we need to sell from. Maybe we'll get something tomorrow as today's session looked rather bullish.
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December Coffee KCZ5
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Coffee continues to decline and show that it's in a strong downtrend. With a bit of luck we'll see a hestiation and another chance to short.
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December Cotton CTZ5
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Support outlasted resistance as cotton made a big move to the upside today. Looks like the market is truly bullish after all, so I'll have to resign myself to buying.
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November OJ OJX5
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OJ found our first profit target today as prices made a very aggressive move to the upside. If you did not exit on target you'll want to keep the stops pretty close as we have over $600 in profits.
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October Sugar SBV5
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Sugar continues to be "the little engine that could" and I continue to hold out for a better price to buy from. The trend is strong but the market is also very overbought. I just hope I don't end up waiting too long.
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