Sunday, November 11, 2007

New Blog Link

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Wednesday, January 17, 2007

Tom's Trades - Day Trading by AMBUSH!

BONDS

MARCH 30 YEAR T BOND

The daily chart sure made our call look good, but in actual fact the market moved so fast on Friday that we couldn't get a trade off. Rates fell steadily right from the open and didn't even flinch at the 111-00 line, our first action line, and simply continued lower to our target at 110-24 before holding up. The Bonds spent the rest of their time in the 110-24 region not doing a whole lot for the remainder of the day.

Given the strength of the line at the 110-24 area I'm going to toss this number into the mix along with our usual xxx-00 and xxx-16's that we normally play. The market is in a steep decline and I think we could see 110-00 before it finally bottoms out, at least for the short term.

So to start off Tuesday I'll be watching how the market continues to play 110-24. Err on the side of caution and wait for a retest if necessary before selling. There was a lot of pounding going on here so you should look at a possible buy if we rally back to the 111-00 line.

CURRENCIES

MARCH CANADIAN DOLLAR

The Canadian Dollar responded much better to our numbers last Friday. The market opened just above the 8525 line, which was the "new" number for the day. From here we saw rates dip slightly a few minutes into trading only to shoot higher through 8525 again. Given how quick the rally came I thought I had missed the move, but then we got the good ole retest at 8525 – just like it was supposed to.

From here the market once again turned higher and allowed me to buy in at 8535. I wasn't too disappointed at the "sloppy" fill as the steady pace easily allowed me to bring stops to breakeven. Even if you didn't get a chance to buy in off 8525 the CD did give another chance off our second line at 8550. This retest was a little quicker however, so you had to be on your toes to get it.

Stop management is a little trickier now. While it is tempting to leave the stops at breakeven (and probably safe to do so), it's probably more prudent to bring them under the 8550 support. Remember the Once Broken Theory – that once an area of resistance is broken the market should not reverse back through it.

I'll be playing the 8550 line again for Tuesday, so even if we do get stopped out we have a chance to re-enter. To the upside it looks like 8615 is our next area to be wary of. There's also the other side of the small gap from January 2 at 8600, so you might want to add that one to the list as well. While I don't think we'll see it, 8525 is still on the table for a move lower.



MARCH SWISS FRANC

The Swiss Franc was paying off like a loose slot machine last Friday. Our short from 8060 was at breakeven and we had 8025 in our sites as a profit target. The market opened quietly but then broke down hard through Thursday's lows wasting no time getting to the 8025 support! The speed of the move caught me by surprise, but I was still above to exit with decent profits.

Now that I was wide awake I was intently concentrating on the 8025 line. The market gave us a half hearted retest over the next 15 – 20 minutes but only got as low as 8032 before setting in another rally. If you recognized the move higher, what Tom calls "whispers", as the end of the retracement you could have bought the run to 8075, but don't feel bad if you missed it. While it was an impressive move, it was difficult to catch as rates whizzed right through anything resembling resistance until it got to 8075.

Our lines for Tuesday come at 25 point increments, which is typical of the currency markets. We'll start off the day playing the 8075 line which is followed by 8100 and finally 8125. I'm favouring a move to the upside, and this would be my preference.

The downside might see a retest of the 8050 line, which would give us an excellent opportunity to buy higher from here. While that is the ideal, a breakdown would bring 8025 back into play.




INDICES

MARCH MINI RUSSELL 2000

The Russell's range looks impressive on the daily, but truth be told it was very difficult to capitalize on the move. Friday's session began with a slight rally bringing the market to the 797 line, the one I was watching like a hawk to sell, remember? I got my wish as the market retreated from the resistance, retested, and fell off again. The move was short lived however as the Russ "felt" the 792 support early and bounced from 793, tagging me for a small loss in the process.

From here we saw another run to 796.50 (ie. 797). This time I was looking for the possibility of a breakout and got one after the brief retest of the resistance area. Rates chopped around considerably for the next couple of hours, leaving very little of my finger nails. I was more than a little relieved when we finally saw the 796.50 line hold the second time and rally higher from there. Before the close I brought the trade to breakeven, but forgot it was a holiday weekend in the US. It would have been much more prudent to exit, but there's not much I can do about that now.

For Tuesday I'll be paying particular attention to the 803 resistance and won't be shy about exiting here, or on the first sign of weakness. With the 805.50 resistance just above here I have to admit I'm skeptical about the upside for the beginning of the week, but long term might be a different story. Of course a breakout higher and subsequent retest should be bought, no matter how queasy it makes you feel.

While I don't think we'll see a full on reversal to start next week, but a dip to 796.50 – 797 would not be out of the question. Watch for the test/retest as a sign the support will hold before setting up for the next buy. Of course if the floor falls out, then 792 is going to be in play.



MARCH MINI $5 DOW

The Dow had my number on Friday as I was unable to ride out the choppy ranges that started the day. I was long from 12580 and hoping that we wouldn't see the index slip too much lower, but the quick move to 12550 stopped me out of the trade. Now I was lost until we saw something at 12600 or 12474, both of which seemed way out of reach for the day.

Of course I was wrong as the market made a big move to 12600 on a gap. From here we got a couple of retests. I bought the second one, not know that there would be a third, but all worked out okay as rates continued to climb to the end of the session. Given that this is a long weekend, I think I'll bring stops to breakeven (12610) for Tuesday, just in case we see a bigger than expected reversal.

12600 is obviously the monster line in play for Tuesday as is 12580. To the upside we have the contract highs at 12652 (ie. 12650) which are likely to have something to say about where the Dow is going. I'm favouring a reversal on Monday but with the recent strength you can't rule out a rally, but I would be suspicious.




GOLD

FEBRUARY GOLD

Gold began Friday right on schedule. The market rallied smoothly from the open and I thought we were going to get a good opportunity to work the 617 line, that was until the market blasted right through the line all the way to the 620 resistance! From here we saw prices contend with the 620 resistance and I was torn whether to buy or sell as I knew the market could go either way. Normally I would have preferred to short, but the quick move that got us here had given the market a bullish flavour.

I actually got a little luck with Gold as we had a test and retest of the 620 line. I was all set to sell the next bar lower when prices blew back to the 617 line. I wasn't prepared for such a large move and was quite relieved to see it was short lived as prices spent the next 20 minutes back at the 620 line.

We eventually saw the 620 resistance give way and break the previous high at 621 before stalling at 622. I set up to buy a breakout above 622 and got the fill less than 10 minutes later. Prices didn't look back at this point which made it very easy to bring the trade to breakeven on the next leg higher. I subsequently rolled the stops to the 625 resistance on the way up. Prices never got low enough to stop me out, but I had no intention of holding Gold over the weekend, so I exited before the close.

To start the week we will be paying particular attention to the 625 – 626 region again. From here the market could fail and send prices back to the 620 and maybe even 615 support. To the upside the first number of consequence seems to be 630 after which we'll be keeping a close eye on 637.




EDUCATION

The Concept of Test and Retest

You will hear me refer to test and retest a lot in my analysis in reference to how the market responds to a particular line of support or resistance. This concept is the cornerstone of our trading methodology since we "react" what the market does, rather than predict what it will do. The best way to understand how the market is reacting is to use the test/retest principle.

As support and resistance traders our job is to find the most influential lines of support and resistance and then trade off of them. Regardless of your time frame, the principle remains the same. What most people do wrong however is that they try to determine the strongest lines in the same time frame they are trading. This is not possible. While the current time frame might give you hints as to strength, you should be looking at a longer time frame to determine your action lines.

If you are day trading then you should be gathering your information from the daily charts, not the intraday. The intraday charts are where you initiate and manage your trade, but all your action numbers should be predetermined from the daily chart. Likewise if you are a position trader, you should be getting your information from the weekly chart, which is the next longer time frame. The weekly chart will give you your action numbers which you trade on the daily chart.

Okay, now that we now how to determine our action numbers, how do we establish a test and retest. Fortunately it isn't as difficult as it sounds. Remember that we are trading strong numbers. As a result, when a market breaches a strong area of resistance, it will have a tendency to retest that area to make sure that the breakout is valid. This retest is normally our best opportunity to enter a trade. Why? Because the breakout has already validated the direction and the retest is confirming the breakout; therefore we have a good opportunity to get into a market with minimal risk. Some diagrams should help clarify the principle.

Let's assume that prices are rallying and quickly approaching an area of resistance. It might look something like this:



When the market approaches the resistance it can do one of two things: it can break through, or it can bounce. Depending on how it reacts to the resistance level will determine how we react. So since we know "something" will happen here, we are on the alert to either buy or sell.

Now it is common to want to buy/sell the first breakout/bounce, and sometimes that is all the market will give us. But more often than not we will have a test followed by a retest of the resistance which gives us a better opportunity.

Let's see what a breakout followed by a retest would look like:



A bounce is very similar. While most times you would be tempted to sell the first bounce, often the market will retest the resistance before committing to the downside. A bounce with retest would look like this:



Of course the exact opposite is true if prices are coming from above into support. Sometimes a market will give you several tests and retests before finally committing and other times it will only give you a one bar retest but the principle remains the same. Papertrade it for a while and you will see that it is true in all markets and in all time frames.

Wednesday, November 08, 2006

Tom's Trades for the Big Weekend Edition, Novemeber 6, 2006

Tom’s Trades
By R. Thomas Logé
I’m still spending more hours sleeping than awake. I walked a mile and a half Saturday and again today. Of course as soon as I got back to the house I was out for a couple of hours. I’ll be back at the doctor’s tomorrow for a new chest x-ray. Hopefully we’ll see some big improvements from the last one.

It felt good to be back trading Friday even though I didn’t do much. It is very important to be physically fit to trade I think. I really do believe there is a definite correlation between sustained mental exertion and one’s physical condition. I was really wiped out by the little trading I did on Friday. It’ll be interesting to see how I fare tomorrow.

Let’s get after our plan for the week and see what the markets are setting up for us.

NEW TRADES

DECEMBER TBonds

The employment report played havoc with the Bonds Friday. The increase in jobs fell short of estimates but they recast the prior 2 months much higher than originally reported which set off the selling. I think a bigger impetus came from lots pent up profit taking as I wrote Thursday night. I sold 112-27 rolled out at 111-29 for a nice pick up. I then sold it again at 111-28 and exited at -31 losing 3 ticks before selling -28 once more with an exit at -17 for a daily bank of $1187 on the 3 trades.

The coming week is very light on reports until Thursday. We’ll see unemployment claims, import/export pricing. Balance of Trade and wholesale inventories all on Thursday. On Wednesday and Thursday we have two big auctions … 3 year notes followed by 10 year.

Look for the weekly tone to be down and we’ll kick off Monday looking to trade 111-16 or 112-00. The possibility exists for us to open lower than 111-16 in which case 111-00 will become the initial focus.
DECEMBER Eurodollar

I didn’t do anything in the ED on Friday. The employment numbers impacted the Ed as well.
I will sell a retest into the 94.640/.660 area as it fails and begins dropping again. I will buy a break above 94.660. I will also sell a break below 94.580 or buy on a failed retest there.
I’m going to keep the stops as close as possible. I’m planning to keep them back .015 from the trigger price.
DECEMBER Canadian $
I sold 8875 on the break of 8880 on Friday and exited at 8855 for $200.

Any retest of 8820 or lower right down to 8800 is a buy as it turns back north. I’ll also sell a failed retest above 8870 as it dies and turns south. Any retest of 8900, 8920 or 8960 that fails and turns lower is good for a sell.

Use the 3’s above and the 7’s below trigger numbers for stops.

DECEMBER Swiss Franc

I tried to sell on the failed retest of 8040 but couldn’t get it done as the SF was moving hard on the back of the employment numbers.

Any failed retest of 8100 is a sell. Likewise a failure at 8060 gets sold. A retest of 8000 that fails to pop lower is a buy and n outright break lower than 8000 is a sell. A retest of 7940 or anything lower is a buy as it turns and begins climbing.

Use the 3’s and 7’s a la CD for management controls.

DECEMBER Mini Russell

I played 750 and 752 with some success Friday. I sell off the break of 752 and 2 buys on bounces above 750 netted about $600.

Now that earnings season is well behind us the game of guessing turns almost entirely to what will the FED do in the Spring. The talking head’s wish list had a rate CUT at the top. The numbers released last week lowered the probability of that happening and scuttled the advances of early session.

That’s a more solid floor at 750 than the chart portrays. I expect it to hold the market up but I don’t think we’ll make any sustained progress higher as 775/780 will do the work as a ceiling at least for a while, maybe all week.

Here are the numbers currently in play for the December contract:

780, 775, 773, 770, 768,
765, 760, 752, 750, 748,
745, 742, 740, 738, 735, 732, 730, 726, 722, 718, 715, 712, 710, 706, 704, 702, 700, 698, 696, 694, 690, 688 and 680.

752 and above are add on’s.

DECEMBER Mini Dow

12000 is a critical number for the DOW. If we break it early Monday we may find it tough sledding to get back above it within the week. If it holds it will be a floor to be reckoned with.

Here are the current numbers in play for the DOW:

12200, 12150, 12100, 12060, 12000, 11940, 11900, 11800, 11775, 11750, 11700, 11620, 11600, 11580, 11550, 11500, 11475, 11440, 11400, 11370, 11350, 11330, 11300, 11240, 11200, 11170, 11150, 11050, 11000, 10970,
10950 and 10850.


DECEMBER Gold

Friday, I bought 621.50 and exited at 626.50 for $500. I might have done a bit better but lost my courage.

We ended Friday sitting on 630 so we’ll want to be ready to rock early on Monday. Play the $10 channels and be on watch for a chance to trade off 635 with a sell as mentioned in last Thursday’s update.

DECEMBER Cotton

I’ll buy a failed retest at 48.00, 48.50 or 49.00. I’ll buy a break higher from 49.50. I will also sell a failure at 49.50. I sell a failed retest of 50.00 or buy the break higher from there. Any failure between 50.50 and 51.00 is good for a sell as well. A break higher from there is fair game for a buy as well.

All stops are back 13 ticks from the trigger prices. Be very watchful of end’s of long runs and have some likely ONCE BROKEN numbers ready to go.

DECEMBER Cocoa

Cocoa is a pretty simple chart to decipher this week. I’ll buy a break above 1500 or sell a failed retest there. I’ll also sell a break below 1460 or buy a failed retest there as it turns higher. Stops are the 3’s above and the 7’s below the trigger numbers.

DECEMBER Corn

I’m purely a spectator for the moment. If I change my view I’ll advise you in the Daily Updates during the course of the week.

DECEMBER Wheat

I’ll buy a failed retest of 4.80 or sell a break below there. Same approach at 5.00 and 5.10 … buy the break higher; sell a failure.

Tom

Monday, October 16, 2006

Traders Helping Traders Big Weekend Edition - Part One and Part Two

Traders Helping Traders E-zine for the week 10-15-2006 - Test Drive Edition

Question: Do you ONLY cover one or two markets??
Answer: NO!! We cover all markets in all sectors - wherever there's a good trade, we'll cover it!

This is only the TEST DRIVE Edition. Our Subscribers get the whole thing.
For a detailed analysis of ALL the markets Erich and Tom cover along with explicit charts, entries, exits, stops, risk/reward ratio, potential profit, (and much more) please join us at http://www.supportandresistance.com/subscribe.html

Part One - Erich's Trades:

Lesson du Jour
Question:
How do you arrive at your profit targets?

Answer:
Profit targets are nothing more than subjective targets that the market might stop at. I arrive at these targets using the following tools:

If the market is retracing:
Fib levels, especially the 50% and 62%, but on larger trends, or long term charts the 38% will sometimes be influential

Trendlines, if the market is retracing to a trendline I will assume that the resistance near the trendline will cause the market to react (especially if it's in the direction of the major trend and not the pullback trend)

20 day moving average, which is a "moving" trendline.

The neckline (or full retracement) of the previous move. The reason rounded top/bottom formations are so powerful is that they repeat over and over again. I almost always assume a full retracement past the 62% line, but given the size of the move it might be a very long term target and I'll have shorter term targets in the meantime.
It is IMPORTANT TO NOTE that these tools only help me narrow my search for important support and resistance levels. I do not trade the numbers these tools offer up blindly, but they are helpful for narrowing your focus.

In a trending market:

1. If the trend is strong (ie. DMI is strong or building) I will often opt for trailing a stop. This usually allows me the greatest flexibility in capturing the better part of the move, but will routinely leave a lot more money at risk. October Sugar is a perfect example where we racked up over $2300 in profit per contract before finally getting stopped out, but I was running a stop almost $400 – 500 back, and that's a lot for sugar, but was necessary to "ride" the trend.

2. If the trend is weak I will almost always opt for a profit target. This is any area where the S&R is strong, which is determined by the tools in the manual you got. Essentially it's any area of extreme population, especially if there has been a previous reaction in that area as well.

You might want to consider the size of your account as well. I almost always recommend that small account traders take profit on target when they get it. Sometimes the market will move well past your intended target, but other times it will reverse. More often than not you'll be better served taking profit on target, and when in doubt, that's what you should do.

Remember that it's not the size of the profit that's important; rather it's the consistency in getting the profit. Once you have the consistency part down, the larger profits come from taking more contracts, not making home run trades.

Does that help?
Got a question that needs answering like an itch you can't scratch? Send it along to me at [email protected] and I'll be happy to try and clear things up for you.


You can see a sampling of Erich's Markets we're covering this week- Currencies and Energies (mini Natural Gas, Canadian Dollar and the British pound) along with charts at http://www.supportandresistance.com/Trade-Updates/testdrive-10-15-06.html

A Sampling of Tom's Trades we're covering this week: T-Bonds and the Mini Russell.

Let’s take a look what the coming week has in store for us in trading opportunities.

NEW TRADES

DECEMBER TBonds

Seems to me traders are on a hyper-sensitive watch for any signs of inflation which they think might spur the FED to more interest rate increases. In Friday’s Bond trading we dropped a full point minus 6 ticks on reports that one had to really reach for the case to be made. In fact, many would say the drop was not at all supported by the data but traders shrugged it off and went the lower route anyway.

The coming week is rich with reports that speak directly to the inflation issue. Monday we have the New York Fed manufacturing report, Tuesday it’s the Producer Price Index (PPI) and the FED’s Industrial Production report. On Wednesday we have the big kahuna of inflation reports as the Consumer Price Index (CPI) comes out. On Thursday we turn attention to the employment report and the Conference Board’s Index of leading economic indicators.

Look for some choppy up and down trading for the whole week. If we can get to -00 and -16 to open the day along the way our methods should be productive. I’ll try to relegate my trading to -00 and -16 at least initially but will not be afraid to jump on the quarters if need be.

Friday’s session closed at 110-11 so we’ll be focused on 110-00 and 110-16 for Monday morning. I’m also going to be poised to take a flyer off 110-08 either way. If we look at the daily chart we’ll see that 11-08 and 110-00 are critical support levels for Bonds.
DECEMBER Eurodollar

We did break .620 so I decided to hold the trade over the weekend. .600/.595 is the next critical level to get thru. I now have the stop at B/E and will quickly bail if .620 is exceeded on Monday.
For those not in and looking to establish a trade on Monday, I’d be willing to sell a break below .595 or buy a failure as it rose above .600. Stops are at .625 on the sell and .595 on the buy. The only management that makes sense is thru the use of periodic RRR.
DECEMBER Canadian $
No mystery in the CD charts this week. We’ll buy a failed rest or break back above 8800. I’ll also sell a break lower. Targets are at 8920 for the buy and 8700 for the sell.

I also like the 8840 level and will buy a break out higher or sell the failed retest there as it breaks lower. I’ll use the same targets as above.

There’s S&R all along the pathway to each of the targets at 20 point intervals. We need to keep the stops rolling along behind any trade that’s making progress. We know in the currencies we have enough price flow to get trades almost every day so it is imperative that we come away with profits on every trade that gives them to us. There is no sense in allowing profits to dissipate where such high trade frequency exists. Be ever mindful of your periodic RRR.

We’ll use the same stop structure as usual … 3’s above on sells and 7’s below on buys.

DECEMBER Mini Russell

Strong earnings reports persist and all the economic reports seem to be reinforcing the “soft landing” the FED keeps talking about. That makes for a pretty rosy picture for stocks as the DOW continues to set new highs. This may be an October that breaks the normal pessimism that usually prevails during this month.

I doubt we’ll see anything in the reports to change the tide of higher values in the indices. This is going to test our ability to enter trades until we get some backfilling forming structure we can get our analysis teeth into. We are in for some lean times I fear in light of the huge advance of Thursday and Friday.

Here are the numbers currently in play for the December contract:

750, 748, 745, 742, 740, 738, 735, 732, 730, 726, 722, 718, 715, 712, 710, 706, 704, 702, 700, 698, 696, 694, 690, 688 and 680.

To get the full Big Weekend Edition with both Tom's Trades and Erich's picks, join us at http://www.supportandresistance.com/subscribe.html

Good trades to you!

Monday, October 02, 2006

Traders Helping Traders Big Weekend Edition - Part Two

Tom's Trades By R. Thomas Logé

The Day Fire is all but out after burning for a solid month and consuming 254 square miles of brush and timber. It is testimony to the amazing work of firefighters that only one house was lost.

The fire robbed me of 2 days of trading but we came back for the final 3 and did pretty well all things considered.

That's another benefit of the way we trade, picking predetermined price levels rather than chasing after each day's price flow. We can leave the markets for a day or 2 or even more and come right back without feeling we lost touch.

I'm going to dig right in and get after the game plan for next week.

NEW TRADES

DECEMBER TBonds

The coming week is light on reports with 2 exceptions. On Monday we start off with a heavyweight in the form of the ISM report on manufacturing activity. Analysts expect a reading around 53.5; maybe a bit higher after Chicago's regional reading on Friday. On Friday we'll cap the week with the employment report. Since it is the only report Friday it may have even greater weight than normal so be wary.

The close on Friday at 112-13 ended the week on a sour note for bulls. I think we'll open the week with more weakness and tread water from there all week. We'll be watching for opportunities at 112-16 and 112-00 to began the week.

DECEMBER Eurodollar

I'm still short from .695 from Thursday. The stop is at B/E now. I'm thinking we have a shot at seeing .620 and maybe even .580. Periodic RRR is going to dictate how this trade concludes. If I weren't involved in this short trade I'd be looking at selling a break below .660 with a stop at .675.

DECEMBER Canadian $

In Thursday's Daily Update I added 9040 and 9020 to the mix of playable numbers. We'll play either way now off all 4 numbers … 9040, 9030, 8980 and 8940. For buys at 9020 or 40 we'll look at 9080 as a target. For sells we'll look at 8940 and hope to get thru there to open up the 8860 target discussed below.

We have two primary lines in the sand to contemplate Monday morning … 8980 and 8940. We'll buy the break above 8980, sell the break below 8940 or sell the failed retest at 8980 or buy the failed retest at 8940. I'll also play at 8920 either way dependent on the appropriate whisper there. Targets are 8860 on any sell and as much as I'd like to say 9040 on the buy the real "what's most likely" is 9020. That makes the buy at 8980 a very small trade with less than a $400 profit potential.

The stops will be on the same basis we've been using for sometime now … on buy trades they go at the next lower XXX7 and on sells they are at the next higher XXX3. We'll be risking only about $80-$100 on the 8980 buy but that barely yields a 4:1 RRR. If you take the buy there you can't leave it out of your sight for even a minute.

DECEMBER Swiss Franc

We're right back where we were week before last.

I'll take a flyer at 8060 either buying the break higher or selling the failed retest there.

Target for the buy is 8160 and for no good reason, 8000 on the sell. Any trade done here needs to be rolled to B/E very quickly about 10 ticks I imagine.

The stops will be on the same basis we've been using for sometime now … on buy trades they go at the next lower XXX7 and on sells they are at the next higher XXX3.

DECEMBER Mini Russell

The market played out almost as we predicted last week. I had it pegged at 2 up and then 3 down, we actually did 3 days of up and then 2 down. We're going to stay strong but suffer a bit in trying to gain and hold new altitude. This will likely be a frustrating week for us as we keep bumping above price levels we can play. I can't add any new numbers on the high side yet so we'll probably be handicapped in buying some of the spikes we'll inevitably see.

I think it's going to be quite taxing to play the markets both ways capitalizing on both buy and sell trades. Some of you may find it more comfortable to ambush only buys on pullbacks.

Here are the numbers currently in play for the December contract with the addition of 742 and 740:

742, 740, 738, 735, 732, 730, 726, 722, 718, 715, 712, 710, 706, 704, 702, 700, 698, 696, 694, 690, 688 and 680.

DECEMBER Mini Dow

The DOW clearly has been less riddled by volatility than has the Russell. It has been a much smother ascent to current levels. The DOW is going to be a difficult play fir us exactly for those reasons.

Here are the current numbers in play for the DOW:

11775, 11750, 11700, 11620, 11600, 11580, 11550, 11500, 11475, 11440, 11400, 11370, 11350, 11330, 11300, 11240, 11200, 11170, 11150, 11050, 11000, 10970, 10950 and 10850.

DECEMBER Gold

I think the coming weeks will play out very well for our $10 Channel theory. I see gold becoming more and more a creature of range and less and less able to make sustained moves in one direction. This tendency coupled with the Channel play should reap benefits for us throughout the week.

DECEMBER Cotton

We made the plunge below 51.60. There isn't a thing down here that gives us an ability to read a course of action. I'm going to play only at 51.60 and only by buying a break higher. The stop is 51.53. The target is 52.60 with an aggressive roll at 52.00.

The trade will more than likely terminate on the end of a long run or as a result of periodic RRR considerations as opposed to arriving at a target.

DECEMBER Cocoa

There is evidence of support at several price levels from 1460 to 1480. I'm going to play only 1470. I will buy a break higher or a failed retest there. The stop will be 1467 and I'm looking at a target of 1530 - 1540. 1480. 90, 1500, 1510 and 1520 all command respect worthy of a roll. I don't think you can manage this market that tight so again mixing periodic RRR with the S&R will be the likely way to go.

I think I'll sell Cocoa on a failure up at 1500/1510 with a stop at 1513 or 03 depending on the fill price.

DECEMBER Corn

My first line in the sand comes at 2.68. I will buy a break higher; I would prefer to sell a failed retest there as it turns and heads back south.

I'll sell a failed retest at 2.65 1/2 - 2.66. I will not buy the break higher from there. I'll also sell the break lower at 2.62.

2.52 and 2.54 are also levels I'll play. I'll look to sell breaks lower at either number or buy any failures there. These are pretty much the first buy levels I'm comfortable with outside of the buy of the break higher at 2.68

These are all scalps so the penny and a quarter rolls and stops are in play.

DECEMBER Wheat

Wheat has been on a 2 week plus pattern of alternating up and down days. The ups have non the less out paced the downs as Wheat added 65 cents to price. Monday will determine whether the pattern repeats or not. We'd expect an up day. I really think we'll be down.

I'm going to play 4.41 selling the break there. It is a scalp trade so the stop is a penny and a quarter as are the rolls.

Tom