Erich's Update for Friday, February 4, 2005

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Erich's Update for Friday, February 4, 2005
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Hot off the commodity presses to you!

Erich
http://www.supportandresistance.com

"Pessimism ought to be considered a sin." - Conrad Hilton
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1: MARCH CORN
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CH5 O=195 1/4 HI=195 1/4 LO=194 1/4 CL=195

Can't seem to catch a break in corn lately. We sold
the market on the low today before prices recovered
and closed relatively high - overall not a good thing
going into tomorrow.

The good news is that we've got a strong resistance
level to say "you're wrong" without too much money at
stake. Leaving everything as is for tomorrow.

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2: MARCH COTTON
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CTH5 O=4430 HI=4445 LO=4310 CL=4312

That's a little more like it! Got a nice fill in cotton
today as prices fell off right from the open. As you
know we tried to sell cotton off the high, if we got the
opening price we were looking for. Unfortunately we didn't
get it; although in the future I might entertain selling
cotton from the open next time we're relatively certain
about the direction.

Bring exit stops to breakeven to protect yourself tomorrow.
First profit target is 4251.

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3: MARCH BEAN OIL
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BOH5 O=1898 HI=1903 LO=1882 CL=1886

Not much has changed for bean oil in respect to our
chance to get into another trade this week. The market
is getting closer to weekly resistance and we might
see a pause tomorrow since it's Friday. RSI is also
getting quite oversold, so support is likely not too
far away.

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4: ARPIL LIVE CATTLE
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LCJ5 O=8780 HI=8847 LO=8755 CL=8825

Nasty session today as cattle opened with a major gap
to the downside only to recover to where the market
left off yesterday. Regardless of where your stops were
you would have gotten taken out on the open for a loss.

This market is behaving even more wickedly than normal.
Think it's time to take a breather and reassess our
position over the weekend.

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5: MARCH COCOA
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CCH5 O=1590 HI=1609 LO=1580 CL=1594

Bit of a surprise out of cocoa as prices put on the
brakes today. RSI is hooking which makes me think we
could see lower prices tomorrow.

The more aggressive line is to take the market short
below today's support on the low and cover the trade
above 1600 (or the high if you can afford it). The more
conservative trade is to wait to see how prices respond
to the 1550 support before selling.

Since it's Friday, and I'm not crazy about holding cocoa
over the weekend, I think I'll opt for Plan 'B'.

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6: MARCH WHEAT
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WH5 O=288 1/2 HI=291 LO=288 CL=289 3/4

If you sold wheat yesterday then you would have likely
gotten stopped out for a small loss today as prices ranged
a little bit without going anywhere. Yes, we framed this
trade a little tight; however given our potential profit
target at 278, we really didn't have a lot of choice if
we were going to try and sell.

There's such clutter on all the grain charts right now
that it hardly seems worthwhile trying to trade them.
Sitting this one out tomorrow until we either get closer
to weekly support or see prices rally a bit.

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7: MARCH CANADIAN DOLLAR
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CDH5 O=8064 HI=8076 LO=8024 CL=8054

This is one trade that I'm feeling better about all
the time. Notice how rates made a stab at support today
but were unable to get low enough to find our order.
This is what support and resistance is supposed to do,
and if we're choosey about our lines, then we can stay
on the right side of the market.

Don't know if rates are coming down tomorrow or if they'll
rally off support, but if they do break the significant
support at 8017 we'll be there to sell!

*SELL March Canadian Dollar at 8014
*Stop 8037
*Approximate Risk Exposure: $230 per contract
*Profit Target: 7916
*Approximate Profit Potential: $980 per contract
*RRR: 4:1
*Degree of Risk: Moderate

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8: MARCH SILVER
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SIH5 O=675 HI=678 LO=659 CL=667.7

Big day in silver range-wise; however prices really didn't
go anywhere. Tomorrow's interest rate announcement will
undoubtably have an effect on silver's prices (probably
down) but I'm not going to chance getting whipsawed. The
ranges are just too big right now to make for a predictable
entry.

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9: DECEMBER EURODOLLAR
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EDZ5 O=96.23 HI=96.24 LO=96.21 CL=96.22

Small day in the ED even though rates fell off a bit
from yesterday. While I want to sell the market there
isn't enough structure to put together a trade from
these levels. Unfortunately we just have to wait until
we get our next cue.

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10: WILD CARD
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No wild card market tomorrow.
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