Tuesday, August 22, 2006

Traders Helping Traders Big Weekend Edition

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Market Update for Tuesday, August 8, 2006
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Hot off the commodity presses to you!

Erich
http://www.supportandresistance.com

"All bad decisions come out of fear." - Erich Senft

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1: CURRENCIES
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September Australian Dollar ADU6
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The Aussie fell off slightly today. If we get more of the same tomorrow I'll bring the entry down as well, but right now I'll hold off buying until we're above resistance.

*BUY September Australian Dollar at 7677
*Exit Stop: 7639
*Approximate Risk: $380 per contract
*Profit Target: 7793
*Potential Profit: $1160 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH

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September British Pound BPU6
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The BP stalled today so we can probably expect something lower tomorrow. Decision time as far as the stops go: either leave them below 189 if you're trying to ride the trend, or bring them below today's low AND put another buy order above the high in case we get stopped out.

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September Canadian Dollar CDU6
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The 8960 high today is past the 8950 line we were watching, but it might have been momentum that carried the market through here. We should know tomorrow.

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September EuroFX ECU6
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Ugly day in the EC. The plan for the stops reads exactly the same as for the British Pound.

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September Japanese Yen JYU6
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It looks like the Yen is going to head lower tomorrow, and if RSI is any indication, possibly for the short term as well, at least until we get another testpoint that is.

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September Mexican Peso MPU6
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I don't like the fact that the Peso stalled so close to the 92000 line, this could spell trouble for our trade tomorrow. While the best stop is still the original, you could put them below today's low to cover the trade on the first sign of reversal.

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September Swiss Franc SFU6
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The Swiss Franc had a bearish looking day today. I'm holding off here tomorrow, but something lower looks likely.

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September US Dollar Index DXU6
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RSI is hooking higher which would hint of higher rates to come. If the DX does head higher we'll be on hold until the next testpoint.

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2: ENERGIES
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September Unleaded Gas HUU6
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I'm probably going to regret this, but the RSI trendline hook combined with the resistance at 230 is almost too much for me to bear, so I'm planning to buy the market higher tomorrow. The bad news is that the trend is non-existent, so a whipsaw is not out of the question.

*BUY September Unleaded Gas at 231.10
*Exit Stop: 228.45
*Approximate Risk: $1113 per contract
*Profit Target: 224.955817 per contract
*RRR: 5:1
*Degree of Risk: HIGH

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September Heating Oil HOU6
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I thought about trying the same kind of trade in Heating Oil as the trend is a little stronger, but today's range is making it too difficult to get a low money trade to jive. Maybe tomorrow.

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October Crude Oil CLV6
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Hmmm...looks like I should have set up to buy Crude on the next break higher since this move seemed to come out of nowhere. Next time.


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3: FINANCIALS/INDICES
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March (07) Eurodollar EDH7
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I know I said I'd buy the ED on the next sign of resistance, but I can't bring myself to do it - yet.

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September mini-DOW YMU6
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RSI is overbought and the trend is weak - everything is hinting that the current resistance should hold for the short term.

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September mini-NAS NQU6
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If we had a slightly stronger trend here I'd be more comfortable trying to short the NAS tomorrow. As it is the trend is undefined which could mean a lot of chop - something I try to avoid.

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September mini-S&P ESU6
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Ditto for the S&P.

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4: GRAINS
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September Corn CU6
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We didn't get the buy in Corn today as prices fell off. That's okay, we halfways expected that, but if prices continue lower tomorrow as well I might look at another trade.

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September Oats OU6
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I thought about selling Oats today, but this morning's opening gap would have voided our attempts. Sitting on my hands for tomorrow.

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November Rice RRX6
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It's not the best setup we've ever seen, but Rice did break the bottom of the trading channel today. The good news is that the breakout was mild, and prices didn't run away, so we've got another chance to short it again tomorrow.

*SELL November Rough Rice at 934.5
*Exit Stop: 945.5
*Approximate Risk: $220 per contract
*Profit Target: 900.5
*Potential Profit: $680 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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September Soybean Meal SMU6
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I'm not surprised at today' move in Soy Meal; however I am a little surprised at the strength at which the market moved lower. I'm on hold here until we see support, but this one is definitely near the top of the list!

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September Soybean Oil BOU6
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Not impressed by Bean Oil's day today, but I will run the buy order again tomorrow for the heckuvit.

*BUY September Bean Oil at 2707
*Exit Stop: 2647
*Approximate Risk: $360 per contract
*Profit Target: 2993
*Potential Profit: $1716 per contract
*RRR: 5 1/2:1
*Degree of Risk: Moderate

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September Soybean SU6
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A "holy moley" day in Beans as the bottom fell out of the market. Now that we have direction we only need another chance to get in. Tomorrow's probably heading the same way, but where and how to enter are too iffy.

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July Wheat WN6
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A rather subdued day in Wheat today as prices fell slightly. We're very close to another RSI testpoint, so I'll hold off until we get it.


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5: MEATS
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August Feeder Cattle FCQ6
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Feeder's punched through the 115.70 resistance today like it wasn't even there. Still on hold for tomorrow.

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October Live Cattle LCV6
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Live Cattle continued higher today on Feeder's strength. The best place for stops is to leave them where they are, but I understand if you don't want to leave yourself in a risk position, so bring them to breakeven and keep your fingers crossed.

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October Lean Hogs LHV6
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Nuts. A strong day in Hogs and we missed it. This market wasn't giving many clues though. We're on hold for the moment.

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6: METALS
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September Copper HGU6
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What happened to Copper's trend? This market used to be buy and hold just a few months ago and now it's turned into chop-city.

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December Gold GCZ6
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Not much to report in Gold today as trendline resistance continued to hold the market down. RSI did move higher, so I'll run the weekend trade tomorrow.

*BUY December Gold at 671.5
*Exit Stop: 660.0
*Approximate Risk: $1150 per contract
*Profit Target: 724.5
*Potential Profit: $5300 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH

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September Silver SIU6
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An "off" day in Silver is bringing us back to the 1200 support line where we might see a bounce. Holding off for tomorrow, but soon...very soon we'll have another trade.

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7: SOFTS
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September Cocoa CCU6
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With all this support below the market I'm afraid to short Cocoa and with the huge move lower a few weeks ago I'm afraid to buy it!

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September Coffee KCU6
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I was hoping Coffee would normalize a little more on this correction, but after today's session I'm not sure we're going to see that.

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December Cotton CTZ6
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Cotton's just plain crazy right now. I expect it will continue to exchange higher/lower days, but not with me it won't.

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September OJ OJU6
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Wow, I can't believe that OJ broke resistance again. I could buy tomorrow, but truth be told I don't trust the move higher.

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October Sugar SBV6
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A nice move lower in sugar today. You could bring your stops above today's high or leave them at breakeven for one more day. The trend is strong so I really want to try and ride this one out.