Monday, November 07, 2005

Erich and Tom's Updates for Friday, November 4, 2005

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Market Update for Friday, November 4, 2005
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Scroll down about halfway for Tom's Trades. Subscribers got these last night, test drivers get theirs after the fact.

To get yours hot and fresh and BEFORE the markets open, go to http://www.supportandresistance.com/subscribe.html
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1: CURRENCIES
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December Australian Dollar ADZ5
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Caught a break in the AD today as the market didn't follow through on yesterday's fade day. I'm clamping down on this market as we're getting close to important support at 7337. I'll run my profit taking order and bring stops in above 7380 for tomorrow.
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December British Pound BPZ5
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Not much new to report in the BP today. I might run the buy order again tomorrow, but it is Friday so be aware it's a very HIGH risk deal.

*BUY December British Pound at 178.03
*Stop 177.47
*Approximate Risk Exposure: $350 per contract
*Profit Target: 179.97
*Approximate Profit Potential: $1212 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Canadian Dollar CDZ5
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The CD remained range bound today, which is fine with me. RSI hooked slightly at the trendline giving the upper hand to the bears for tomorrow. I'll run the trade again, but remember it's Friday.

*BUY December Canadian Dollar at 8543
*Stop 8517
*Approximate Risk Exposure: $260 per contract
*Profit Target: 8647
*Approximate Profit Potential: $1040 per contract
*RRR: 4:1
*Degree of Risk: HIGH

OR

*SEL December Canadian Dollar at 8447
*Stop 8477
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8327
*Approximate Profit Potential: $1200 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December EuroFX ECZ5
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See why I'da rather be trading a trending market than a choppy one? Good thing the EC declined right from the open and never had a chance to whipsaw us. We know support at 119.50 is strong so I might sell a break of the support tomorrow.

*SELL December EuroFX at 119.37
*Stop 119.73
*Approximate Risk Exposure: $450 per contract
*Profit Target: 117.61
*Approximate Profit Potential: $2200 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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December Japanese Yen JYZ5
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I wish the Yen would show us some support again so we could re-enter this market...or try to.
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December Mexican Peso MPZ5
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The Peso gave us a bit of a reaction to the contract highs. I can see a buy order coming in a couple of days, but not tomorrow.
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December Swiss Franc SFZ5
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Very abrupt reversal from the SF today. I'm holding off selling until we get back to the contract lows, but you could short today's support.
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December US Dollar Index DXZ5
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Here we are again, near the contract highs. I would normally buy a break above the high, but it is a Friday, so I might just watch and wait, especially since the trend isn't that strong yet.
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2: ENERGIES
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December Unleaded Gas HUZ5
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A hiccup in Gas today. I might expect to see a rally continue for a day or two before we get another sell signal.
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December Heating Oil HOZ5
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Heating oil found support today as prices rallied. Look for a test at 187.50 to turn the market again.
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January Crude Oil CLF6
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A strong day in crude today could spill over into tomorrow's session. If it does my first resistance would be at 6410. If we got a reaction from there it might be a chance to sell again.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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The ED moved low enough today that we can finally bring our stops to breakeven. This market is trending well so I think I'll try to give it a little elbow room and not crowd it too much.
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December mini-DOW YMZ5
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Got filled in the Dow long today as the index rallied higher through resistance. There's enough room that we can bring stops just below the 10500 line if you wanted. The *ideal* stop placement is still at the original, but I understand if you're anxious to take some of the risk out of the trade.
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December mini-NAS NQZ5
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Sorry to say I didn't see this big move coming in the NAS. I was expecting a more subdued day today in light of yesterday's strong rally, but the market continued just as strong. We're almost certain to get a smaller day tomorrow which might set up another buy.
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December mini-S&P ESZ5
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We had the right idea for the S&P, but I framed the trade a little too tightly, which resulted in a whipsaw today. Nothing new here tomorrow.
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4: GRAINS
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December Corn CZ5
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No surprise as corn continues to fight weekly support at 195. It will likely continue to do so tomorrow as well.
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December Oats OZ5
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Looks like the bulls won the Oat market as prices broke through resistance today. In hindsight it would have been a good breakout to buy, but oats have been so choppy lately I thought it best to wait.
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November Rice RRX5
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Rice easily found our first profit target today. If you took profit here you banked $400 in profit per contract. If you're trying to let the trade run then you'll bring stops just under 760 for tomorrow. Next target is resistance at 789.5.
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December Soybean Meal SMZ5
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Darn it! I hate it when the market gives me a good buy signal going into the weekend. Maybe I'll get lucky and the resistance at 179 will hold the market for a day. Please?
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December Soybean Oil BOZ5
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Ditto with Bean Oil as prices took a big bounce off the trendline support today. I'm going to pass tomorrow and hope for a hestitation. I hope I don't regret it.
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January Soybean SF6
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Beans moved through 595 today like it wasn't even there. I'm a little leary about buying the market long tomorrow so I'll hope that resistance at 606 slows things down just a bit.
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December Wheat WZ5
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I'm not too impressed with today's session and will bring stops in at least to 316 for tomorrow. We'll probably see a bounce so you might want to bring your stops in above today's high to minimize your exposure.
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5: MEATS
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January Feeder Cattle FCF6
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Feeders were a little stronger today, but not much. I'll run the same trade again tomorrow, but we'll have to see a serious move to get filled.

*BUY January Feeder Cattle at 115.25
*Stop 114.62
*Approximate Risk Exposure: $312 per contract
*Profit Target: 118.67 (projected)
*Approximate Profit Potential: $1712 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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December Live Cattle LCZ5
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Cattle's holding the trendline pretty well, but there's enough resistance up here to keep prices from running away from us.
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December Lean Hogs LHZ5
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I was expecting a bit of a pullback in hogs by now, but it hasn't happened yet. It's not clear whether hogs are in an uptrend or downtrend at the moment, so I'll wait.
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6: METALS
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December Copper HGZ5
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Copper continued to make some pretty ugly moves today. There's nothing tradable here at the moment.
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December Gold GCZ5
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It's not the best setup but gold fell off to test support again today. If tomorrow see's a break of this week's low I might go ahead and sell it.

*SELL December Gold at 458.7
*Stop 461.3
*Approximate Risk Exposure: $260 per contract
*Profit Target: 450.3
*Approximate Profit Potential: $840 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Silver SIZ5
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I'm not quite as confident in silver's setup, although I know that it is very likely to follow gold tomorrow.
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7: SOFTS
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December Cocoa CCZ5
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I'm hoping cocoa will finish the week on a flat note thereby giving us a good set of resistance and support lines to trade next week. The seasonals are saying that a buy is the trade du jour next week.
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December Coffee KCZ5
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I regret not buying coffee off the first bounce as prices rallied yet again today. How come when you actually try to buy the stuff it chops around and when you're watching you get these beautiful rallies?
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December Cotton CTZ5
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Another hit on 5160 today. I'll run the sell order again tomorrow. I just hope the entry is far enough away to keep us out of trouble. You know I'm not crazy about trading cotton on Friday's.

*SELL December Cotton at 5147
*Stop 5207
*Approximate Risk Exposure: $300 per contract
*Profit Target: 4943
*Approximate Profit Potential: $1020 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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November OJ OJX5
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Bought OJ today on a break through the strong resistance at 120. You could leave stops where they are, or try to get them closer to breakeven for tomorrow. Hopefully we'll get one more rally to make the move a little easier to decide.
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March Sugar SBH6
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Sugar's getting close to an RSI test and another sell. I'll just watch the market tomorrow howwever.
==================================================
RECOMMENDED BROKER
==================================================
If you are looking for a broker that understands the recommendations and could help you place them, call Matt Zimberg at his toll free trading desk at 1-800-771-6PIT (6748) [or (561)282-6848]. You can also reach him via email at [email protected]
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"Tom's Trades" for Friday, November 4, 2005
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Inexplicably last night's Daily Update did not post and was not saved. We suspect that a system restore done last night to cure another problem occurred before the posting took full effect. Hopefully, tonight's get's thru.
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=1-14 HI=1-21 LO=0-23 CL=0-25

The Bond meltdown continues raising the yield further still. We began the day selling -14. I exited at 111-01 picking up 13 ticks, $406 as it bounced after breaking 111-00 and tagging 110-30. I bought -03 and exited at B/E. I sold -02 and was again stopped at B/E. That was it for the day.

The close at 110-25 has us on 111-00 and 110-16 for tomorrow's open.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.210 HI=.225 LO=.170 CL=.175

My hands are tied without structure. Does not make me happy to see another $250 of potential profit accrue without our participation. Would I have done anything different? Not a single thing. Situations such as we face here are what cause a lot of less confidant traders to immediately begin looking for ways to change what they do. The assumption being there is some flaw that $250 escaped us. EVERY system, methodology and plan has strong points and weak points. Granted, this clearly is a weakness in my trading. To change would potentially strengthen this aspect. But, that change strengthening this element would weaken me elsewhere. A swap I am completely unwilling to make. For every action there is an equal and opposite reaction. Keep this in mind when the mood strikes to change.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=88 HI=20 LO=64 CL=70

We sold 8496 off the break of 8500 and got stopped out at 8503 losing $70. Sold 96 once more. Once we broke 80 I moved my stop to 81 and got stopped there for $150. I sold 8478 on the break of 8480. Once we broke 8460 I rolled to 8471 and got stopped at 74 for $40. Done for the day.

We'll go with the 3 TT numbers again tomorrow. If we get a failure at 8480 I'll sell it. No buy, though, save that for a break above 8500.
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4: DECEMBER SWISS FRANC
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SFZ5 O=55 HI=59 LO=61 CL=66

We sold 7817 and rode it to a break of 7800 ... barely a break, but a break. We exited at 7803 for $175. We then sold 7816 and out at 7803 once again for $162. The bounce pulled up way short of 7820 but since we'd already failed close to that level multiple times I jumped it 7812. I got out at 81 for $387. Pretty fair day, I'd say.

Same TT numbers for tomorrow
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=8.30 HI=6.50 LO=7.00 CL=1.10

I bought 662.50 and exited at 665.50 for $300. Sold 664.60 and exited at 662.00 for $260. I bought 662.50 again and exited at 664.60 for $210. I sold 664.60 and exited at .70 dropping $10. We then sold 664.60 and exited at .90 losing $30. We then sold 664.60 and exited at 660.40 for $420. All done at $1150 for the day.

All the numbers tomorrow
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6: DECEMBER GOLD
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GCZ5 O=5.50 HI=5.50 LO=0.20 CL=1.90

I bought 461.60 later in the day and got stopped at B/E. $10 channel tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.40 HI=.99 LO=.60 CL=.73

I sold 52.90 and out at .20 on the bottom of a long run for $350. I sold 51.95 about 12:15 and exited at .70 for $125. 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=73 HI=80 LO=66 CL=76

I couldn't catch up to the market today, it was always just one jump ahead of me. Be ready to go early at 1350. Same TT numbers for tomorrow.
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9: DECEMBER CORN
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CZ5 O=1.97 HI=1.97 1/2 LO=1.96 1/4 CL=1.961/4

Just watchin'.
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10: DECEMBER WHEAT
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WZ5 O=3.13 HI=3.14 LO=3.10 CL=3.13 1/4

Just watchin' here as well. You can do the TT trades if it gets there.

Erich's Update for Thrusday, November 3, 2005

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Market Update for Thrusday, November 3, 2005
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No Tom's Trades tonight! Subscribers got these last night, test drivers get theirs after the fact.

To get yours hot and fresh and BEFORE the markets open, go to http://www.supportandresistance.com/subscribe.html

"Some men give up their designs when they have almost reached the goal; while others, on the contrary, obtain a victory by exerting, at the last moment, more vigorous efforts than ever before." - Herodotus
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1: CURRENCIES
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December Australian Dollar ADZ5
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Big fade day in the AD today makes me think that there is a rally in store tomorrow. Bring those exit stops tight in above today's high to protect as much profit as possible.
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December British Pound BPZ5
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Today's bounce makes me a little more bearish on the BP tomorrow. This might be the first "higher support" to confirm a change in trend. If so we should see it continue higher tomorrow.

*BUY December British Pound at 178.03
*Stop 177.47
*Approximate Risk Exposure: $350 per contract
*Profit Target: 179.97
*Approximate Profit Potential: $1212 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Canadian Dollar CDZ5
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RSI shows the CD at a test point for tomorrow. Which way the market will go from here is unclear as there is a definite lack of trend in this market. This is going to make taking any position a little extra risky, so be careful if you decide to take the trade.

*BUY December Canadian Dollar at 8543
*Stop 8517
*Approximate Risk Exposure: $260 per contract
*Profit Target: 8647
*Approximate Profit Potential: $1040 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH

OR

*SEL December Canadian Dollar at 8447
*Stop 8477
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8327
*Approximate Profit Potential: $1200 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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December EuroFX ECZ5
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The ED rallied today off yesterday's support and the corresponding hook in RSI would suggest it's time to buy. I'll look to buy above the 121.25 resistance, but remember this is a high margin, high risk market.

*BUY December EuroFX at 121.33
*Stop 120.93
*Approximate Risk Exposure: $500 per contract
*Profit Target: 122.69
*Approximate Profit Potential: $1700 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Japanese Yen JYZ5
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Nothing new here. Still watching and waiting.
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December Mexican Peso MPZ5
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The Peso continued to batter at the top end of the trading range, but given the overbought status of the market I think a decline would be in order.
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December Swiss Franc SFZ5
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The Swissy also bounced off the RSI trendline today suggesting that the market has formed new support and changed trend directions. I'll buy the market long above the resistance near today's high.

*BUY December Swiss Franc at 7903
*Stop 7867
*Approximate Risk Exposure: $450 per contract
*Profit Target: 8097
*Approximate Profit Potential: $2425 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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December US Dollar Index DXZ5
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The USD backed off of resistance today. I thought about selling the market short tomorrow below the next support at 8920 and covering above the intermediate resistance at 8950.

*SELL December US Dollar Index at 8917
*Stop 8951
*Approximate Risk Exposure: $340 per contract
*Profit Target: 8763
*Approximate Profit Potential: $1540 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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2: ENERGIES
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December Unleaded Gas HUZ5
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Gas fell off with a vengence today. RSI is near a testpoint so I think I'll hold off until we see if we get another test before selling.
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December Heating Oil HOZ5
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Heating oil is trading off support at 175 and I would expect to see a reaction here tomorrow.
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January Crude Oil CLF6
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Crude tagged us at breakeven today. In hindsight I would handle this trade differently the next time. Once I knew the market was having a hard time heading lower I should have moved up my profit order to take what I could. At least we would have walked with a bit of profit.

Next time.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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The only thing I don't like about today's session is the higher closing price which might see a hiccup tomorrow. You can bring exit stops a few ticks above today's high (or even breakeven if you like)
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December mini-DOW YMZ5
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A disappointing day in the Dow as the market just barely broke support enough to find our sell order. From here the index rallied to stop us out for a loss. Ouch! Not the way I wanted to start the month!

While I normally don't trade a market after a losing day I might make the exception tomorrow and take the Dow long if it continues above teh 10500 resistance.

*BUY December mini-Dow at 10513
*Stop 10447
*Approximate Risk Exposure: $330 per contract
*Profit Target: 10743
*Approximate Profit Potential: $1150 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December mini-NAS NQZ5
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So much for the NAS looking bearish yesterday! The market took off in a big way today; however it moved a little too far to make it tradable tomorrow.
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December mini-S&P ESZ5
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The S&P might bounce off the 1220 resistance tomorrow, but if it doesn't and continues to rally I'll buy the market long from the other side.

*BUY December mini-S&P at 1223.50 *Stop 1219.50
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1235.50
*Approximate Profit Potential: $600 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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4: GRAINS
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December Corn CZ5
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After yesterday's hiccup it looks like corn is ready to continue lower, but I'm not sure I want to get back into a market that's moving this slowly. I might just watch for a bit.
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December Oats OZ5
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Oats are sandwiched between support at 158 and resistance at 163 1/2. I'm not going to commit to anything yet, but we'll watch and see which side wins.
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November Rice RRX5
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Rice had a more subdued day today, but prices still advanced. We're not quite to our profit target just yet, but we moved far enough that we can at least bring stops to breakeven for tomorrow. You could also move them a couple of ticks below today's low if you wanted to capture some profit.
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December Soybean Meal SMZ5
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Meal stalled again after yesterday's rally. I think prices will continue higher, but I want to wait and see them get closer to 178 - 179 before committing.
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December Soybean Oil BOZ5
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Bean Oil continues to flirt with the price trendline. A bounce here tomorrow will confirm resistance and get me back into a buying mood.
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January Soybean SF6
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Beans mimicked soy meal today and recovered part of yesterday's rally. I'm not convinced this market knows where it's going just yet, but we've got good levels on either side to allow us to get on board before it runs off.
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December Wheat WZ5
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Sold wheat today on a break through support. There's not enough room to do too much with the stops right now, so you might want to leave them where they are for one more day.
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5: MEATS
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January Feeder Cattle FCF6
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Feeders are winding up to a mini-channel from the last few days. I'm thinking a breakout to the downside is in order, but technically we're still bullish so I'll run the original order.

*BUY January Feeder Cattle at 115.25
*Stop 114.62
*Approximate Risk Exposure: $312 per contract
*Profit Target: 118.67 (projected)
*Approximate Profit Potential: $1712 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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December Live Cattle LCZ5
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Not much has changed for Cattle today except that prices are responding a bit to the trendline. A higher session will get me looking long, while a lower session will get me looking to sell.
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December Lean Hogs LHZ5
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I'm not convinced that this is the time to buy hogs...at least not yet. I could be wrong but I'm going to wait.
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6: METALS
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December Copper HGZ5
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RSI is rising quickly yet prices are not following. Copper's still stuck below the contract highs and remains very risky. I'll continue to watch.
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December Gold GCZ5
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Gold found some support from the weak USD today. If the USD continues to fall then gold should rise, but it remains to be seen how much momentum it can gather so close to $500.
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December Silver SIZ5
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Silver bounced today and will likely rally tomorrow. I'm holding off until we see an RSI test before selling the market short again.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa's still stuck between support at 1350 and resistance at 1400. Seasonally speaking we should expect a rally very soon, but I'll probably look to bracket the market before the weekend.
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December Coffee KCZ5
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Coffee bounced off support at the 50% retracement level. If the ranges weren't so brutal I'd simply buy the market long tomorrow; however the resistance at 102.50 has me a little shy.
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December Cotton CTZ5
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Cotton continued to test support at 5150 - 5160 today. This is also the 62% retracement and the last chance for the bulls to step up and rally the market. We're technically in a downtrend however, so I'll stick with my sell for tomorrow.

*SELL December Cotton at 5147
*Stop 5207
*Approximate Risk Exposure: $300 per contract
*Profit Target: 4943
*Approximate Profit Potential: $1020 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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November OJ OJX5
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Very solid resistance at 120 today. I might consider buying the market above the 120 line and covering below it. The next stop is weekly resistance at 130.

*BUY January OJ at 120.80
*Stop 119.65
*Approximate Risk Exposure: $172 per contract
*Profit Target: 128.90
*Approximate Profit Potential: $1215 per contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate to HIGH
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March Sugar SBH6
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Sugar recovered a bit today, just as expected. The resistance at 1160 could put the brakes on the market's ascent tomorrow, but I'm watching RSI for my next selling cue.
==================================================
RECOMMENDED BROKER
==================================================
If you are looking for a broker that understands the recommendations and could help you place them, call Matt Zimberg at his toll free trading desk at 1-800-771-6PIT (6748) [or (561)282-6848]. You can also reach him via email at [email protected]