Erich and Tom's Updates for Wednesday, October 26, 2005
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Market Update for Wednesday, October 26, 2005
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Hot off the commodity presses to you! Scroll down about halfway for Tom's Trades!
"I want to live life as a poor man with lots of money." - Picasso
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1: CURRENCIES
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December Australian Dollar ADZ5
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There goes the AD today! The RSI bounce as well as support 7450 pushed the market higher today. Our sell order was never found, but that's okay - no harm, no foul.
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December British Pound BPZ5
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I guess I should have bought the market above the 178 resistance today, huh? Oh well, trading in hindsight is easy. We'll have another chance to buy in a day or two.
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December Canadian Dollar CDZ5
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The CD rallied today as anticipated. What wasn't anticipated was the strength of the rally...what a big day! We're back in bull country now folks, so keep a lookout for the next good buying opportunity.
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December EuroFX ECZ5
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I had a feeling the market was taking too long to break support and today that was confirmed. Now that we have a *new* trend established we should be able to buy on the next sign of resistance.
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December Japanese Yen JYZ5
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The Yen has been a little more stubborn about giving up the downtrend, but rates did rally today. We're still technically in a bear trend, but that could change over the next couple of days.
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December Mexican Peso MPZ5
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I supposed hurricane Wilma has put the brakes on the Peso as the market continues to make the same range day after day. We'll proably end up bracketing the range and trading the breakout, but not tomorrow.
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December Swiss Franc SFZ5
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The Swiss Franc also established a new trend today as rates had a strong rally. As with the other currencies we're on the lookout for resistance so we can buy again.
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December US Dollar Index DXZ5
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Of course the USD had to fall off today given the strong rallies in the other currency markets. Here we have a more solid support line to sell however, in case the market continues lower. It's a bit of a tight entry, and I hope it doesn't bite us, but the trade looks promising.
*SELL December US Dollar Index at 8893
*Stop 8923
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8763
*Approximate Profit Potential: $1300 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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2: ENERGIES
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December Unleaded Gas HUZ5
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Here comes the rally we were looking for. Expect Gas to continue to rally for the next couple of sessions before we look to sell again.
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December Heating Oil HOZ5
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Heating Oil followed Gas today and like Gas we can expect the rally to continue for at least a couple more sessions before we sell.
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January Crude Oil CLF6
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Big bounce off support today as prices easily broke the RSI test to the upside. We're against strong resistance right now, but look for prices to rally until 6400 before we are likely to get a reversal.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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The ED gave us confirmation of resistance today as the market dipped to support at 9525. I'll sell this market tomorrow if rates continue lower and cover the trade above intermediate resistance at 9530.
*SELL September Eurodollar at 95.235
*Stop 95.310
*Approximate Risk Exposure: $188 per contract
*Profit Target: 95.005
*Approximate Profit Potential: $575 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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December mini-DOW YMZ5
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The Dow gave us a bit of a reaction off today's high. The market is also approaching an RSI test, and while it is a touch short, we might get a reaction tomorrow.
I'll try to sell a break of today's low, but it might turn out to be a touch early.
*SELL December mini-Dow at 10327
*Stop 10387
*Approximate Risk Exposure: $300 per contract
*Profit Target: 10077
*Approximate Profit Potential: $1250 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December mini-NAS NQZ5
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While the Dow and the NAS follow each out around, we're getting a slightly different look from the mini-NAS; therefore I'll wait until the market confirms resistance before selling.
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December mini-S&P ESZ5
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The S&P should also move with the Dow, however here too we have a slightly different setup. RSI is not at a testpoint yet, so I would expect the market to rally a little further. If we get a confirmation of resistance tomorrow however, then we can look to sell on Thursday.
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4: GRAINS
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December Corn CZ5
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You can inch your stops a bit closer today and put them either above the 202 resistance, or bring them to breakeven if you like. We should expect to see the market continue lower tomorrow, but it's sure taking its time.
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December Oats OZ5
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Oats gave us a wicked reversal today stopping us out of our position, and after such a nice fill yesterday too! It looks like the market might continue lower after all, but I don't have anything new here tomorrow.
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November Rice RRX5
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Rice showed us some support today and is getting closer to resuming the uptrend. I'll run the buy order again tomorrow in case we see a rally.
*BUY November Rice at 725.5
*Stop 718.5
*Approximate Risk Exposure: $160 per contract
*Profit Target: 787.5
*Approximate Profit Potential: $1220 per contract
*RRR: 7 1/2:1
*Degree of Risk: Moderate to HIGH
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December Soybean Meal SMZ5
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I'm still not quite sure what to make of soy meal. Right now it looks as though the downtrend is intact, but I won't sell the market just yet.
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December Soybean Oil BOZ5
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Bean oil has its head into the 2400 resistance (again). If we see a reversal here tomorrow, which I think we might, then we can try to sell in on Thursday.
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January Soybean SF6
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As expected beans did rally today. Did you notice the high? Yep, 594. Now you know why I was hesitating about the 595 line, right? Like the other bean markets, I'm not convinced as per the new market direction - yet. I'll just watch here tomorrow.
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December Wheat WZ5
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There's the first sign of support we were looking for. I'm going to push my luck and expect the market to make a bit of a pullback over the next couple of days, before we get another chance to sell.
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5: MEATS
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November Feeder Cattle FCX5
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If you brought your stops in today you would have been tagged as the market ranged slightly higher. If you left the stops in their original placement, the *ideal* spot, then you're still short Feeders.
Hopefully the market will continue lower tomorrow however, and allow us to safely bring in our stops, at least to breakeven.
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December Live Cattle LCZ5
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The good news is the 9030 line helped us keep our losses to a minimum today, the bad news is we got whipped out of our short trade. Nothing new here tomorrow.
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December Lean Hogs LHZ5
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Hogs continue to consolidate today, but I'll run the sell order as is for tomorrow. If the market rallies I might consider tightening our order to reflect the new numbers.
*SELL December Lean Hogs at 5967
*Stop 6015
*Approximate Risk Exposure: $190 per contract
*Profit Target: 5782
*Approximate Profit Potential: $740 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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6: METALS
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December Copper HGZ5
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Don't tell me copper reacted early! Today's rally also hooked the RSi indicator, but it happened before the testpoint. We'll see what happens tomorrow, maybe it was a false break.
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December Gold GCZ5
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No surprise that gold rallied today from weakness in the USD. RSI is at a testpoint, so a bounce is possible tomorrow. If we get a breakout higher then that will confirm the trend and get us looking to buy again.
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December Silver SIZ5
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I guess I should have bought silver today like I thought. Good to know the ole hindsight is still 20/20.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa showed a bit of resistance today. That's the trouble with a weak trending market: choppiness. I'll run the buy order again tomorrow, but it's still a very high risk trade.
*BUY December Cocoa at 1421
*Stop 1397
*Approximate Risk Exposure: $240 per contract
*Profit Target: 1497
*Approximate Profit Potential: $760 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Coffee KCZ5
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Coffee continues to consolidate, and that's fine. I'll run the buy order again tomorrow. A rally is coming...I just don't know when!
*BUY December Coffee at 107.65
*Stop 106.45
*Approximate Risk Exposure: $450 per contract
*Profit Target: 112.85
*Approximate Profit Potential: $1950 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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We got filled in our cotton trade today as prices rallied through resistance. I'm hoping to see the market continue higher tomorrow so that we can adjust our stops a bit. Ideally you'll want to leave them where they are until tomorrow, but if you wanted to tighten them you could place them below the 5460 resistance, or the 5480 intraday resistance.
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November OJ OJX5
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Yep, here we go again....
Nothing new tomorrow, but we've got to get another chance to buy here!
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March Sugar SBH6
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Sugar gave us one more day, as per request, so I guess I'll have to get serious about buying it. RSI is hooking early of the trendline, so I'll give the entry a little more elbow room before buying. I'd like to reserve entry until the other side of 1200, but that will put too much money at risk.
*Buy March Sugar at 1197
*Stop 1173
*Approximate Risk Exposure: $270 per contract
*Profit Target: 1293
*Approximate Profit Potential: $1075 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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"Tom's Trades" for Wednesday, October 24, 2005
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=3-02 HI=3-12 LO=2-13 CL=2-14
I bought 113-04 hung on thru a rough patch and exited at -08 for 4 ticks, $125. I sold one at -07. Bonds dipped to 113-00 and started moving sideways, I jumped out at -01 for 6 more, $187. We then sold 112-28 and exited at -24 trying to get -23 for 4 more, $125. I gave it up for the day. I was a little premature in doing so. We probably had enough time to catch that last sell at -28/-27 and maybe we'd have picked up another 10 or so.
The close at 112-14 has us focused on 112-16 or 112-00.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.380 HI=.390 LO=.345 CL=.345
We remain short from 95.450. I still have the stop at 95.420. We got a nice little pop lower rather handily dispatching .370. I moved my stop to .365 near end of day protecting the just broken.370. Now the question becomes is this a real break out or the last gasp of a dying trend ... an interesting contemplation.
If we don't break lower I will look to exit as best I can. If we DO break lower I will take it at .300 without a second thought. If we open below .345 I will immediately move my stop there and begin squeezing the market.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=42 HI=32 LO=26 CL=14
The run higher began righ tat 8460 and never gave us a shot at an entry number I liked or could justify. We missed a great move despite nailing the numbers. Sometimes that happens and there really isn't much that can be done. It's just a part of the game. Move on.
We'll play 8460 as per TT and add 8560, 8440 and 8520 to the mix. Seel only at 8560.
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4: DECEMBER SWISS FRANC
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SFZ5 O=04 HI=87 LO=66 CL=77
We had to watch most of the day but finally bought 7840 and exited at 7880 for 40 points, $500. That ws it for the day. For tomorrow we'l play all our TT numbers plus add 7880 to the mix.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=8.50 HI=8.60 LO=7.90 CL=4.70
We started the day selling 646.50 and geting stopped out at 646.80 losing $20. I bought 645.10 and exited at 646.90 for $180. We bought 645.50 and exited 648.80 for $330. We then sold 646.70 and out at 642.20 for $450. I then bought 642.30 ans exited at 642.50 for $20. Done for the day.
All the numbers tomorrow.
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6: DECEMBER GOLD
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GCZ5 O=9.20 HI=5.80 LO=8.90 CL=4.70
No confirmation=no trade. Frustrating. $10 channel tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.48 HI=.34 LO=.10 CL=.23
I bought 54.55 and exited at 54.95 picking up 40 points, $200. We'll go again tomorrow with the same array of numbers from TT.
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8: DECEMBER COCOA
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COZ5 O=00 HI=08 LO=88 CL=03
It was choppy all day and never gave us a real shot at anything. Same TT numbers for tomorrow.
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9: DECEMBER CORN
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CZ5 O=1.99 HI=2.00 1/2 LO=1.98 3/4 CL=1.99 1/2
Watching only.
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10: DECEMBER WHEAT
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WZ5 O=3.24 HI=3.26 1/2 LO=3.23 CL=3.25 1/2
I sold 3.26 1/4 and exited at 3.24 1/4 for 2 cents, $100. My 2 cents. I'll play 'em again tomorrow, 2.22 1/2 and 3.26 1/2.
