Thursday, February 02, 2006

Tom's Trades for Tuesday, January 31, 2006


"Tom's Trades" for Tuesday, January 31, 2006

1: MARCH 30 YEAR T BOND
USDH6 O2-14 HI2-24 LO2-10 CL2-21

You knew it would either be a day of some trending legs or nothing in advance of FOMC tomorrow. It was pretty much nothing. I did a sell and a buy both of which ended in B/E. After 30 minutes of inability to break above -24 I sold -23 and exited at -17 for 6 ticks, $187. I watched for another 45 minutes or so and packed it in.

We'll abstain tomorrow in deference to the FOMC meeting and the later release of notes. The FOMC meeting takes on more than normal interest as it is the last meeting over which Greenspan will preside. On Wednesday Ben Bernanke takes over ... known to unknown. Also adding potential fuel to the fire is an OPEC meeting. There are also several economic reports of significance throughout the day tomorrow. There is no way to make sense of RRR for tomorrow thus the decision to observe from the sidelines.

2: JUNE 06 EURODOLLAR
EDM6 O.075 HI.095 LO.070 CL.075

Nothing done today. I will sit out the ED tomorrow with the Bonds.

3: MARCH CANADIAN DOLLAR
CDH6 O=16 HI=66 LO=05 CL=35

I sold 8736 on the break of 40 and was stopped out at B/E. Sold 36 a second time and was stopped at 38 losing $20. Sold it again and stopped at 39 losing $30. I then sold 38 and exited at 32 making $10 on the day. All the TT weekend numbers for tomorrow. Be flat by 10:30 CST and stay so until the notes are released and digested.

4: MARCH SWISS FRANC
SFH6 O=31 HI=37 LO=85 CL=02

After it broke 7800 right before the open and bounced back higher I pulled the trade. We'll go again with the TT weekend numbers in the morning. We'll get flat not later than 10:30 CST and remain so the balance of the day.

5: MARCH MINI RUSSELL 2000
ERTH6 O=4.70 HI=7.50 LO=2.30 CL=3.20

We'll add 735 and 732 to the numbers in play on Wednesday. I'll abstain trading the Russell tomorrow.

5: MARCH MINI $5 DOW
EYMH6 O941 HI949 LO903 CL918

We sold 10945 on the break of 50. We were stopped out at B/E. Given the low volume and the general pre FOMC malaise, I stepped to the sidelines for the day. I'm going to trade the DOW tomorrow. I will be flat by 10:30 CST and watch closely from there until the note are released. I may try a trade thereafter. All the TT numbers again tomorrow.

7: JUNE GOLD
GCG6 O=1.00 HI=7.00 LO=0.90 CL=5.80
GCM6 O=6.50 HI=1.20 LO=5.80 CL=0.60

Be aware that Feb Gold FND is tomorrow. We will move out to the April contract beginning with tomorrow's trade. No buys at this level. $10 Channel sells only tomorrow.

8: MARCH COTTON
CTH6 O=.63 HI=.80 LO=.92 CL=.17

We sold 55.55 and rolled twice on the way down ... to B/E at 55.45, to 55.23 as we broke 20. We exited at 55.05 as we bounced from the low of the day at 54.92 ... out with $250. Same TT numbers for tomorrow.

9: MARCH COCOA
COH6 O=45 HI=80 LO=43 CL=77

We sold 47 and almost immediately got stopped out at what I thought would be B/E ... nope out at 1450 losing $30. We then bought 1456 which we exited at 1472 after the failure at 80 picking up $160. Same TT numbers for tomorrow.

10: MARCH CORN
CH6 O=2.22 HI=2.22 LO=2.16 3/4 CL=2.17 3/4

I sold 2.21 ¼ and exited at 2.17 1/2 for 4 ¾ cents, $237. Later in the day we sold 2.19 ½ and exited at 2.17 ¾ grabbing another penny and ¾, $87. We'll keep on playing the same numbers from TT for the moment.

11: MARCH WHEAT
WH6 O=3.47 HI=3.49 LO=3.43 1/2 CL=3.45 ¼

I missed the first break of 3.46 trying to get the Corn done. I sold 3.46 ¼ and got stopped at B/E. I stepped away after that. We'll go with the TT numbers again tomorrow.

THT Trade Update for Tuesday

Market Update for Tuesday, January 31, 2006

"It's a very funny thing about life; if you refuse to accept anything but the best, you very often get it." - William S. Maugham

1: CURRENCIES

March Australian Dollar ADH6
Nice move down today. We had a feeling rates would be coming down. Too bad the market gapped our entry last week. Not too worry, we'll get another chance here soon.

March British Pound BPH6
The Pound held support today at the 176.50-ish line. Looking through your chart you can see plenty of support here. A bounce tomorrow might get me looking long again.

March Canadian Dollar CDH6
A strange little day in the Canadian Dollar today. The opening gap voided our trade to the upside which makes me uneasy about tomorrow. I don't think the market has that much left to go higher, so if you wanted to be aggressive you could sell below today's low.

*SELL March Canadian Dollar at 8719
*Stop 8753
*Approximate Risk Exposure: $340 per contract
*Profit Target: 8601
*Approximate Profit Potential: $1180 per contract
*RRR: 3:1
*Degree of Risk: HIGH

March EuroFX ECH6
The EC slowed considerably after hitting the support at 120.80 - 121.00. We've got an FOMC meeting pending this week which should give the market new direction. I'll hold off right now.

March Japanese Yen JYH6
Our Yen squeeze worked perfectly today allowing us to exit on target right at the open. If you didn't take your $1400 in profit today then you'll want those exit stops in pretty tight for tomorrow.

March Mexican Peso MPH6
A reversal day in the Peso today, which might lead to lower rates tomorrow. I still don't see anything worth trading right now.

March Swiss Franc SFH6
The Swissy gave us support right along the hefty support line near 7800. Like the other markets I am expecting a bounce here tomorrow.

March US Dollar Index DXH6
And the USD got tangled up in the resistance at 8930 today. Here too a bounce is likely tomorrow.

2: ENERGIES

March Unleaded Gas HUH6
A moderate day for Unleaded, but not nearly as strong as last week's sessions. Prices are too far along to do anything with right now so we'll keep watching.

March Heating Oil HOH6
The same deal for Heating Oil. We probably won't see anything interesting until we get closer to 191.00.

March Crude Oil CLH6
Crude gapped our buy order on the open voiding our trade. I'm pulling this trade for tomorrow.

3: FINANCIALS/INDICES

September (06) Eurodollar EDU6
If you took the ED trade short today you would have been filled shortly after the open. Some of you might have voided the trade because of the gap. If you did you might want to wait until after the FOMC report before attempting it again.

March mini-DOW YMH6
The Dow should run at least to 11000 before possibly hesitating. I'm watching RSI for the next testpoint to help me time my trade.

March mini-NAS NQH6
Well that was crappy...the Dow had a big day and the NAS didn't go anywhere. You'll want your exit stops below today's low in case we see a reversal tomorrow.

March mini-S&P ESH6
The S&P is also looking a little more bearish after today's small session. RSI is also hooking suggesting a reversal might be around the corner.

4: GRAINS

March Corn CH6
Yikes! What a crazy day in corn! What do you think, corn's heading lower tomorrow? Yeah, I think so too.

March Oats OH6
Chop chop chop. I'm holding off here until the market gets trending better again.

March Rice RRH6
I was a little surprised that Rice rallied as hard as it did today, filling our buy order in the process. It was a good thing we *parked* our buy order there...just in case.

You can bring exit stops below today's low if you want to take a little more risk out of the trade.

March Soybean Meal SMH6
Yeech! Another gap opening, but a very bearish session. I'm steering clear of here for a while.

March Soybean Oil BOH6
Bean Oil mirrored the rest of the bean complex today. We got a bounce off the first retracement line, so we could see a pullback tomorrow. That's fine with me. I'm not trading it anyway.

March Soybean SH6
Another gap right into the gap from early January. Like the other markets I would like to see a reversal here, but who knows what Beans are doing?

March Wheat WH6
Wheat is all over the board as well. I want to buy this market long again (since we didn't get the reversal we were looking for), but after today's session I might try to give it one more day before placing my order.

5: MEATS

March Feeder Cattle FCH6
Feeders committed to the downside today with a big move lower. did you notice the high? Yep, right at the 110.70 resistance we were watching. RSI is getting a touch oversold, so I'll just watch.

February Live Cattle LCG6
This burns my cookies. We nailed the Cattle market, but the move came a day later than we anticipated. Cattle traded a few ticks short of our first profit target today. Lesson learned. We'll get the next support level.

April Lean Hogs LHJ6
And Hogs gave us the bounce we were looking for as well. Turns out to have been a good call off the 62% retracement line. Hopefully we'll see a bit of a pullback over the next few days.

6: METALS

March Copper HGH6
Copper stalled and RSI hooked. Look for lower prices tomorrow.

April Gold GCJ6
Gold skirted our buy order today, but that's fine. I'll run the weekend trade again tomorrow. Remember though, this is a HIGH risk market right now.

March Silver SIH6
Whew! I can't believe silver took back all that it gave up last Friday. This market is trading bull days with bear days. Are we sure this isn't sugar?

7: SOFTS

March Cocoa CCH6
A big bounce off the 1445 support line today as cocoa prices rallied. I'm sticking with the weekend trade for tomorrow because the numbers are sound, but I don't expect to get filled.

*SELL March Cocoa at 1437
*Stop 1457
*Approximate Risk Exposure: $200 per contract
*Profit Target:1371
*Approximate Profit Potential: $660 per contract
*RRR: 3:1
*Degree of Risk: Moderate

March Coffee KCH6
Some serious chop in the Coffee market. This is making it very difficult to take any kind of low risk trade right now.

March Cotton CTH6
Cotton continued a little lower today but the double hit on support doesn't look all that appealing for tomorrow. Make certain your stops are at least at breakeven or wherever you got filled.

March OJ OJH6
OJ is looking very appealing tomorrow as a sell. This might be the last chance for the bears to turn things around as we approach the 124 resistance. This is a strong line and a break above here is reason to change our bias, but in the meantime....

*SELL March OJ at 120.85
*Stop 123.60
*Approximate Risk Exposure: $412 per contract
*Profit Target: 108.50
*Approximate Profit Potential: $1850 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH

March Sugar SBH6
I hummed and hawed about selling sugar tomorrow on a break below the 1810 support line. It's a doable trade, but it is countertrend, and sugar hasn't been that good about retracing lately. Having said that it is overdue for a major pullback.
I dunno. I'll probably pass.