THT Daily Update for Friday, February 11, 2005

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PART ONE: Erich's Trades for Friday, February 11, 2005
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Hot off the commodity presses to you!
Erich http://www.supportandresistance.com

"When prosperity comes, do not use all of it." - Confucius

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1: MARCH CORN
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CH5 O-6 1/2 HI-9 3/4 LO-6 1/2 CL-8 1/4

Hey, whaddaya know...there is some life left in the corn market after all! Today's rally looked to be pretty strong as the market took off from the open. As before I'm not getting too excited about buying just yet, but I will keep a lookout tomorrow. If prices head higher look for resistance in the gap from January 12, 2005.

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2: MARCH COTTON
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CTH5 O-45 HI-00 LO-40 CL-74

While we saw the bounce in cotton coming, I have to admit it was much more aggressive than I was expecting. It'll be interesting to see what prices do with the 4500 resistance tomorrow - after all, it is Friday.

If we see a stall we could have a good line to play for next week.

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3: MARCH BEAN OIL
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BOH5 O-23 HI-35 LO-17 CL-19

Bean Oil showed us a bit of resistance today when the market closed near the low of the day. Notice too that RSI is at a test point and as such we might see a bounce tomorrow and lower prices.

You could stick with the weekend plan (although you're likely not to get filled tomorrow) or if you wanted to be more aggressive you could sell below the 1915 support.

*SELL March Bean Oil at 1914
*Stop 1936
*Approximate Risk Exposure: $132 per contract
*Profit Target: 1761
*Approximate Profit Potential: $918 per contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate

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4: ARPIL LIVE CATTLE
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LCJ5 O-15 HI-15 LO-65 CL-72

Well, that worked out pretty well, don't you think? ;-)

Sold cattle today as per our plan and the market almost found our first profit target in a single session! I love it when that happens! Now for the tough part - managing the trade.

We'll probably see another bearish session tomorrow; however there is no denying the abundance of support on the low. At the very least you should bring exit stops above the intraday resistance at 8722 to protect some profit. There's about $500 on the table right now though, so don't be shy about bringing those stops in closer to the close.

Certainly if we see a low opening tomorrow (if you can watch the open), we should bring stops in tighter in case of a "fade", but right now it looks as though we will make a run at the 50% level - 8630.

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5: MARCH COCOA
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CCH5 O-45 H-60 LO-35 CL-59

Thought we would at least see cocoa try to get to 1515 today, but it seems the 1530 support was good enough to hold the market up for a bit. Today's session has a bit of "time-to-run-prices-up-again" flavour, so I'm not entirely sure what to make of this market tomorrow.

Think I'll just stand aside.

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6: MARCH WHEAT
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WH5 O-9 1/2 HI-7 LO-9 CL-6 1/4

Wheat was a regular bottle rocket today as prices rallied right from the open. Thinking this market might be ready to head higher (I'm a little more comfortable buying wheat than corn right now); however tomorrow's Friday and we've got a bunch of resistance above the market.

Would love to see wheat stall out tomorrow, this would give us a chance to buy into the market on Monday. Keep your eye on RSI to time your entry.

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7: MARCH CANADIAN DOLLAR
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CDH5 O-74 HI-73 LO-64 CL-59

Big day in the CD. I imagine a few daytraders did alright here as the market made a nice little breakout after opening range expired. Alas us position traders didn't have a trade here today, and tomorrow doesn't look much better.

The resistance at 8100 is making me a little gunshy about buying, but if we clear that (with a reasonably strong close) I'll consider buying it early next week.

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8: MARCH SILVER
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SIH5 O-0 HI-8 LO-7 CL-6.5

Holy Moley...who lit a fire under Silver today? These are the ranges I live for, unfortunately we weren't on board with this one today. Needless to say the market is looking a little bullish (how's that for an understatement) and as such our focus has shifted to buying...but not tomorrow, not after today's huge range.

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9: DECEMBER EURODOLLAR
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EDZ5 O–.365 HI–.37 LO–.31 CL–.325

Dare we try selling the ED again? Today the market showed us resistance at 9637, and RSI is very close to a test point. While we might see a bounce tomorrow we're still able to keep risk reasonably small, so I might look at selling below today's support.

*SELL December Eurodollar at 96.3025
*Stop 96.345
*Approximate Risk Exposure: $107 per contract
*Profit Target: 96.17
*Approximate Profit Potential: $325 per contract
*RRR: 3:1
*Degree of Risk: Moderate

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10: WILD CARD - ARPIL LEAN HOGS
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LHJ5 O-70 HI-50 LO-70 CL-77

We got even with hogs today for the gap that shut us out of our trade a couple of weeks ago. In fact the market found our order quite nicely right from the open and never looked back.

Management is the key now. There could be some profit taking tomorrow as we're currently up over $700 per contract as of the close. Don't be shy about getting those stops in nice and tight in case of a bounce. At the very least you will want to have stops at 7225 or 7210 to protect the majority of our accumulated profits.

First target is support at 7137.5 which we will likely see tomorrow.

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PART TWO: "Tom's Trades" for Friday, February 11, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O-6-23 HI-6-27 LO-5-28 CL-6-01

The gap down open took us well beyond a comfortable sell level and the ensuing rise didn't quite get high enough for me at 116-27. Let me restate that ... -27 was high enough but they wouldn't give me a bid/ask that allowed me anything better than a -25 fill. In retrospect I probably should have taken it and ratcheted down my management as a compensation strategy.

I sold 116-14 and was stopped out at B/E. I then sold 116-15 and was stopped out at -03 for plus 12, $375. We were by then close enough to the final hour I just buttoned up shop.

The close at 116-01 has the focus at 116-00. Since we are not buyers yet, we can proceed with the 116-00 sell as usual even the we are at 116-01. The earliest I will initiate the trade is 115-29.

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2: MARCH EURODOLLAR
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EDH5 O—.035 HI—.035 LO—.025 CL—.030

Keep the eyes on the TT numbers. Had I known it would stay right here for a month and a half I would have sold some option premium ... lol.

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3: MARCH CANADIAN DOLLAR
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CDH5 O-74 HI-73 LO-64 CL-59

Straight out of TT I bought 1 at 8010 after the break of 8008. We did all the rolls right up to 60. We didn't quite make it all the way to 8075 but, at 73 I moved the stop to 69 and was stopped out at 8088 for $780.

Tomorrow I will sell a failed test of 8100, I will sell a failed test of 8080 and I will buy a break above 8100. My money is on the failed test of 8080.

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4: APRIL GOLD
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GCJ5 O-4.80 H-0.10 LO-3.10 CL-8.70

They are really torturing me. A $500 plus move today and they would even give us a fighting chance at a play. We are back up near the top of the channel with the close at 418.70. I'll be looking for the sell above the 80th percentile tomorrow after the confirmation.

$10 channel for tomorrow, gang.

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5: MARCH COTTON
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CTH5 O-.45 HI-.00 LO-.40 CL-.74

With the cloe yesterday at 43.00 it did not surprise me the see the gap open up at the next exact resistance level. I bought at 43.55. We touched 44.50 and broke back hard. I got out at 44.30. It of course then made it thru 50 and worked higher before closing at 44.74 off the high for the day at 45.00. I'll take the 75 points, $375 and quietly mutter under my breath how I really feel.

For tomorrow, I'll buy a break above 45.00 with a stop at 44.83 and a B/E roll at 45.22. The target is 45.90-46.00. I'll also ... and I think this is the more likely trade ... sell one on a failed retest of 45.00 with a stop at 45.03 or 07, a B/E roll at 44.81 and a target of 44.00. On both the buy and the sell keep a trailing stop running 25-30 points behind the market. Do tight rolls at .50 both ways and 44.25 on the sell and 45.75 on the buy.

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6: MARCH COCOA
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COH5 O-45 HI-60 LO-35 CL-59

Nothing for us in Cocoa today. We stayed in between the numbers at 1560 and 1520 all day.

All the same TT numbers plus the 1560 trade from yesterday's update. With the close at 1559 we are looking at a buy above a 1560 break or a sell on a failed retest.

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7: MARCH CORN
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CH5 O=1.96 1/2 HI=1.99 3/4 LO=1.96 1/2 CL=1.98 1/4

We began the day long from 1.95 1/2 again. The gap up open was nice to see but the midday bounce to 1.99 3/4 was just stellar. We bailed at 1.99 1/2 picking up another 4 cents, $200.

Tomorrow it's the TT numbers as well as selling a failed test of 2.00 or buying the break above 2.00 with a very short stop both ways ... 2.00 3/4 on the sell and 1.98 3/4 on the buy.

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8: MARCH WHEAT
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WH5 O=2.89 1/2 HI=2.97 LO=2.89 CL=2.96 1/4

I thought the open was a test of th elows so I bought one as best I could paying 2.90. We were operting under the belief that 2.95 would end it all. Consistent with that belief I was stopped out at 2.95 1/4 for 5 1/4 cents $262.