Wednesday, November 09, 2005

Erich and Tom's Updates for Tuesday, November 8, 2005

Market Update for Tuesday, November 8, 2005

"Look at a stone cutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred-and-first blow it will split in two, and I know it was not the last blow that did it, but all that had gone before." - Jacob A. Riis

1: CURRENCIES

December Australian Dollar ADZ5
If you're still short the AD from last week I would suggest bringing the stops above today's high as a bounce is looking likely for tomorrow.

December British Pound BPZ5
A half-hearted attempt by the bears to push the BP lower today. Think I'll just watch tomorrow.

December Canadian Dollar CDZ5
Ditto for the CD. The high closing price looks like a rally is pending tomorrow.

December EuroFX ECZ5
And the EC as well. Bring your exit stops in above today's high to protect profit in the event of a bounce.

December Japanese Yen JYZ5
There's the hiccup I was looking for in the Yen. I'm going to press my luck and wait one more day before putting together a sell order.

December Mexican Peso MPZ5
The Peso tested the upper end of the trading range today. The trend is building some strength so I might consider a buy above today's resistance.

*BUY December Mexican Peso at 93.125
*Stop 92.075
*Approximate Risk Exposure: $225 per contract
*Profit Target: 94.925
*Approximate Profit Potential: $900 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH

December Swiss Franc SFZ5
The SF is bouncing off the RSI trendline and almost guaranteed to rally tomorrow. It's a countertrend move, so if you decide to take it you might want to look at 7770 as a profit target.

December US Dollar Index DXZ5
Of course the USD is looking bearish today and with the RSI test looks like rates will head lower tomorrow. I'm on the lookout for the next buy.

2: ENERGIES

December Unleaded Gas HUZ5
Go figure, I look at gas last week, so heating oil takes off, this week I look at heating oil and gas makes the big move. Guess I'll just have to trade them all! LOL! Nothing here tomorrow.

December Heating Oil HOZ5
You can't tell it from the daily bar, but heating oil gapped our entry in a big way this morning voiding our trade. Good thing too because the market looks very bullish for tomorrow.

January Crude Oil CLF6
Same thing for crude oil. I still like the downside; however today's high close looks like we're in for at least a short term rally.

3: FINANCIALS/INDICES

September (06) Eurodollar EDU6
A slight pause in the ED today. You could bring your stops in above today's high, or leave them where they are for one more session so as not to crowd the trade.

December mini-DOW YMZ5
Dodged a bullet on the Dow as the index tested support, but didn't get low enough to find our stops. I'm going to leave them at breakeven for tomorrow as I hope to get a little more leeway before bringing up the stops. Of course you can put them higher if you want.

December mini-NAS NQZ5
The NAS stalled slightly today. I should be placing another buy above today's high, but I'm going to hold off a day.

December mini-S&P ESZ5
The S&P is looking pretty weak after today's session as well. Not sure what to expect here tomorrow.

4: GRAINS

December Corn CZ5
Corn broke lower today as expected. These ranges are still painfully small, even with multiple contracts (unless you're trading 10 lots at a time!) We could see prices continue to 190's support, but I'm just watching for now.

December Oats OZ5
Slight hesitation in oats today. Nothing too interesting right now.

November Rice RRX5
If you didn't take profit on target week you'll want your stops below today's low as the market hesitated a bit. We should get another chance to buy this market shortly.

December Soybean Meal SMZ5
Recognize today's low? Yep, that's important support for this market. If we see a rally tomorrow I might be take a run at a buy order.

December Soybean Oil BOZ5
Bean Oil filled our sell order today with a rather smallish range. Hopefully we'll see prices continue lower (I think they will) so we can get the trade to breakeven.

January Soybean SF6
Beans move back into bear territory with today's decline. This market is being quite choppy so I might just watch tomorrow.

December Wheat WZ5
Dodged another bullet with our wheat short as prices almost found our stop order. The low closing price does give us enough room to get to breakeven, which is what I'm doing for tomorrow.

5: MEATS

January Feeder Cattle FCF6
Feeders continue to tease us. I'm thinking that we'll see a decline tomorrow because of the RSI hook; however the trend is up so....

*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

December Live Cattle LCZ5
Cattle's RSI is also hooking so a bounce looks likely tomorrow as well. There's nothing I can trade here at the moment.

December Lean Hogs LHZ5
I knew I was going to be in trouble when I let my *opinion* influence my decision making again. If I had stuck with the technicals I would have bought hogs today, but I didn't and they made me regret it.

6: METALS

December Copper HGZ5
Copper continued to make some pretty ugly moves today. There's nothing tradable here at the moment.

December Gold GCZ5
We're still hanging onto our gold shorts but I have to admit that today's closing price doesn't instill a lot of confidence for tomorrow's session. Leaving everything "as is" for now.

December Silver SIZ5
Silver's looking a touch bullish tomorrow. We should get another sell out of this market in a day or two.

7: SOFTS

December Cocoa CCZ5
Cocoa got awfully close to finding our sell order today. I'm running it as is in spite of the fact that we are on the verge of a bullish time of the year for this market.

December Coffee KCZ5
Slight hestiation in coffee might give us another chance to buy it in a couple of days. Keep watching.

December Cotton CTZ5
The 5200 resistance line held firm today which is great news for tomorrow. If you're inclined to try and take some risk out of the trade you could bring stops in above 5180 if you dare, otherwise leave them where they are for tomorrow.

November OJ OJX5
OJ continued higher today on a rather plain type of day. You can leave stops a breakeven if you like, or move them just under today's low.

March Sugar SBH6
Sold sugar today on a nice breakout to the downside. You can leave stops where they are or bring them just above today's high for tomorrow's session.
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"TOMS TRADES" for Tuesday, November 8, 2005

1: DECEMBER 30 YEAR T BOND
USDZ5 O=1-00 HI=1-03 LO=0-25 CL=0-29

I sold -27 and was stopped out at -28 losing a tick. Strange day to say the least. We opened with an 11 point plus gap higher. I guess we all agreed Bonds were a bit oversold but no one was really prepared to push the issue. The problems in France made the U.S. debt more attractive. I think another factor is we have 18 billion in 3 year notes at auction tomorrow. No one will want to move the yields much either way until after the auction. You may see some late day fireworks ... up if the offering is warmly received and down if it receives a poor reception. Bidding deadline is 1pm EST. I suggest no trades until at least a half an hour after that. You can do some stuff in the early morning if you so choose but I frankly doubt any entered trade will go anywhere so you might just take a vacation day tomorrow. Normally, I don't pay much attention to the auctions but I have an inkling this one may not be the run of the mill auction. The close Monday at 110-29 has us again watching for action on 111-00 and 110-16.

2: MARCH 06 EURODOLLAR
EDH6 O=.190 HI=.190 LO=.170 CL=.180

I honestly don't have a clue at the moment. I'm pretty sure I will but a break back above 95.200 with a .195 stop. Very tight by design.

3: DECEMBER CANADIAN DOLLAR
O=49 HI=69 LO=03 CL=35

I sold 8430. It was a bit of a stretch but the failure at 35 was very convincing, I thought. We pretty much ran out of gas at 8412. I moved my stop to 17 and got the boot at 18 for $120. We climbed back to 39 near end of day but it was too late to generate any enthusiasm on my part. I'll go with 8440 again tomorrow and add 8400 to the mix as well.

4: DECEMBER SWISS FRANC
SFZ5 O=65 HI=02 LO=58 CL=92

7735 is all I can see at this point on the Daily Chart. The weekly chart tells us to be watching for a test of the support at 7600. It looks tempting. I think I'll go for it there. No sell but a buy of a failed test there with a tight 7597 stop is worth a go.

5: DECEMBER MINI RUSSELL 2000
ERTZ5 O=0.20 HI=5.60 LO=7.50 CL=1.70

A very subdued day, indeed. I sold 661.70 and exited at 658.90 on one of the worst fills since I began the Russell. Bygones. Out with $280. I bought 658.50 and exited at 659.70 for $120. I bought 658.40 and exited at 660.00 for $160. I bought 658.90 and got out at 660.90 for $200. I sold 661.70 and exited at 662.20 losing $50. I bought 660.60 and exited at 664.80 for $420. I quit with $1130. All the numbers tomorrow

6: DECEMBER GOLD
GCZ5 O=8.30 HI=0.60 LO=7.30 CL=0.40

I sold 459.20 and exited at 458.10 for $110. I sold 459.10 and out at 458.40 for $70. I sold 459.20 again and got stopped at B/E. 460 and the $10 channel tomorrow.

7: DECEMBER COTTON
CTZ5 O=.44 HI=.00 LO=.17 CL=.26

I sold 51.80 and out at .35 on the bottom of a long run for $225. Any thing over 50 points in Cotton is a long run. We'll go again tomorrow with the same array of numbers from TT.

8: DECEMBER COCOA
COZ5 O=39 HI=40 LO=20 CL=22

Be ready to go early at 1350. Same TT numbers for tomorrow.

9: DECEMBER CORN
CZ5 O=1.95 1/4 HI=1.95 1/4 LO=1.94 1/4 CL=1.94 3/4

This is hard to watch. No Option Spreads yet.

10: DECEMBER WHEAT
WZ5 O=3.10 1/2 HI=3.13 1/2 LO=3.08 3/4 CL=3.10

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

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