Tuesday, February 21, 2006

Traders Helping Traders Big Weekend Edition

Tom's Trades By R. Thomas Logé

Another week in the books. Monday is a Federal holiday and most all markets are dark. My son and my two youngest grand daughters are here for a visit. They live in northern California. It's been over a year since we've seen them so Jacki and I are going to be doing the grand parent thing for a few days. Tuesday we're going to Disneyland. Obviously, I will not trade on Tuesday but we should be back in time for me to do an update Tuesday night.

We've been on the go all day today. We spent some time at a friend's ranch above Santa Barbara doing a little pond fishing, horseback riding and re-bonding with Sydney whose 4 and Courtney who just turned 3.

The other 4 grandkids live here close by so these kinda' get the short end of our grand parenting. Can you say, overcompensating? I think that's pretty much the case for better or worse.

I'm doing an abbreviated version of TT tonight giving you my views and guidance for tomorrow and, probably, significant portions of the coming week. This is the final full week of trading for the month of February; let's make it a good one.

NEW TRADES … MARCH TBonds

The Bonds but in a strong showing on Friday, closing at 113-02 up 24/32nds for the day. This, despite some economic data that should have fostered some price weakness. Most analysts were attributing this to the conclusion of the new FED chief's testimony before Congress which was perceived to be calming to those who had speculated he'd do some muscle flexing. Bernanke is a bright, reasoned and highly competent guy. His stewardship should be very beneficial. We'll be looking for triggers off 113-16 and 113-02. There is always the chance we'll gap open below 113-00 in which case 112-16 will come into play. -08 and -24 will be in play this coming week but ONLY after one trade at -00 or -16 is done.

JUNE 06 Eurodollar

I'd really like to see a retest to 94.945 or at least .940 at then a failure to sell. I'd also buy a breakout above .945. Stops at no more than a point and a half.

I'll also sell a break below 94.925. Unfortunately that's precisely where we closed on Friday so we need a little bump higher and then a failure.

Since we don't have a whole lot of structure on the south side we'll have to rely on periodic RRR as our primary management tool. Keep it under control and all propositions favorable.

MARCH Canadian $

There are, as usual, a bunch of interesting, if not compelling, levels of S&R all around us. Currencies were one of the few markets trading some portion of today. We closed at 8695 after setting a daily high at 8728. I will sell any failed retest into the 8740-50 area with a stop at 8743 or 53 dependent upon the fill price. Get any trades to B/E within 10 points. I will also sell a break below 8720 with a stop at 8723 if given the opportunity. I'm sure all the hits we see at 8695 are really intended for 8700 however I'll make the play … a sell … on the break below 8695 with a stop at 8703. The target for any of these sell trades is 8640. 8620 is a possibility as well but we have bounced off there so strongly I'm inclined to forego looking there and settle for 40. A turn at 8640 can be bought with a short 8637 stop and a target of 8725. Up or down, along the way 8660 and 8680 have to be used for adjustments

MARCH Swiss Franc

Any retest of the 7640/20 area that fails and turns back north is a buy. Wherever it happens, place the stop at the next 7 lower. Get any of these to B/E after a 9-11 tick run in our favor. We'll also buy a break above 7700 The target is the same for all of 'em … 7800. We'll need adjusting rolls at each 20 point increment … 7660, 80, 7700, 20, 40, 60 and 80 on the way up.

I'll sell a retest of 7700 that fails. The stop is 7703 and the target is 7640. Keep the periodic RRR under your thumb.

MARCH 06 Mini Russell

I'm adding one new number … 727 … to the mix. Here is the full array of numbers available to us:

740, 738, 735, 732, 730, 727, 724, 722, 720, 718, 715, 708, 705, 698, 695, 693.50, 690, 688, 685, 683, 680, 678, 676, 674, 672, 670, 667, 665, 663, 660, 651, 649, 645/644 as a range, 641/640 as a range, 633.50, 630 and 625.

We have a fairly light schedule of economic news this coming week which may let the stock markets run a bit. Don't be surprised if we set new contract highs in the Russell and then contract later in the week.

MARCH Mini Dow

The DOW gets some new numbers after the run to new contract highs last Thursday and Friday. 11130, 11118 and 11085 are now in play. The numbers currently in play are:

11130, 11118, 11085, 11075, 11050, 11030 11010, 11020, 11000, 10980, 10950, 10940, 10925, 10900, 10875, 10837, 10815, 10800, 10775, 10750, 10725, 10700, 10650, 10620, 10600, 10550, 10500, 10450, 10425, 10400 and 10300.

APRIL Gold

Gold has been extremely volatile the past week with big daily swings between highs and lows. This is, of course, an environment that favors our $10 channel. The $10 channels all week. The 555 price level has sufficient strength that I will play it outside the $10 channel strategy on its own merits. We settled Friday at 554.60. I will buy a break above 555.00 with a stop at 554.30. I will also sell a break below 555 after a bump up above as it breaks back thru it. The stop is 555.30. The target for the sell is 540. The target on the buy is 570. Both of those numbers are probably wishful thinking so keep the stars out of your eyes and keep periodic RRR firmly in your grasp. The penalty for not doing so could be really very brutal.

To find out more about Tom's $10 Gold Channel Trade and get Tom's Take on the following markets BEFORE the opening bell, join us at http://www.supportandresistance.com/subscribe.html

MAY Cotton
MAY 06 Cocoa
MARCH Corn
MARCH Wheat

That's it for this edition. If you haven't yet attended one of the Wednesday night Webinars I strongly suggest you try to work your schedule to make it possible. These sessions are so important to getting a feel for what Erich and I do. You're participation is so important to us. It is a great way to keep us in touch and provide us with feedback that always adds something to what we do. Also, I want to encourage you all to post questions, trades, issues at the Forum.

To get multimedia copies of the famous Wednesday Night Webinars, join us at http://www.supportandresistance.com/subscribe.html

-Tom