Traders Helping Traders Daily Update for Thursday Feb. 24, 2005

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Erich's Update for Thursday, February 24, 2005
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Hot off the commodity presses to you!
Erich
http://www.supportandresistance.com

"Nothing can stop the man with the right mental attitude from achieving his goal." - Thomas Jefferson
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1: MAY CORN
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CK5 O-4 HI-4 1/4 LO-2 1/2 CL-3 3/4

Reality check today as trader's start second guessing yesterday's huge rally. The hesitation is good for us however as it clearly shows us the strength at 217.

I would like to see the market retreat a little more over the next day or two before entering again. Right now the timing just isn't right.
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2: MAY COTTON
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CTK5 O-20 HI-60 LO-75 CL-89

Should be no surprise to anyone that cotton took a bounce off the 4960 resistance today. Notice too how this level coincides with the 50% retracement.

Ideally I would like to see prices fall off a little more, maybe to 4790 - 4800 so that we could buy in again. If we see a bounce tomorrow I'll be ready with a buy above today's high - just in case.

*BUY May Cotton at 4966
*Stop 4924
*Approximate Risk Exposure: $210 per contract
*Profit Target: 5129
*Approximate Profit Potential: $815 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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3: MAY BEAN OIL
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BOK5 O-95 HI-97 LO-45 CL-91

Bean Oil proved to be the strongest member of the bean complex today as prices pretty much held their ground after yesterday's rally. The high close combined with yesterday's high gives us good parameters to build a trade for tomorrow, although I fully expect prices to head lower for the near future.

*BUY May Bean Oil at 2222
*Stop 2189
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2359
*Approximate Profit Potential: $822 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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4: ARPIL LIVE CATTLE
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LCJ5 O-60 HI-15 LO-35 CL-10

Got the extra hit on support we were looking for today and while prices might head higher tomorrow we've got a great line to sell below. Watch your RSI indicator for a bounce, which we could see come from the 8700 resistance. Also watch for support at 8400 - it's a pretty hefty line.

*SELL April Live Cattle at 8522
*Stop 8570
*Approximate Risk Exposure: $190 per contract
*Profit Target: 8355
*Approximate Profit Potential: $660 per contract
*RRR: 3:1
*Degree of Risk: Low to Moderate
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5: MAY COCOA
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CCK5 O-15 HI-40 LO-15 CL-27

I want to get more aggressive on buying cocoa, really I do, but the market just isn't giving us any decent setups. We've got a band of resistance at 1660 which is giving me some pause about buying from the current levels. I'm afraid I'll have to let it pass for tomorrow.
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6: MAY WHEAT
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WK5 O-21 HI-26 1/2 LO-18 3/4 CL-24 1/2

No real surprise that wheat prices stalled out today. Like the other grain markets I would prefer to see a testing of support before buying in again. I'd like to set up a "just in case" trade to buy the market on a break of Tuesday's resistance; however the resistance at 336 is keeping me out of the trade.

Could be a good day trade though.
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7: MARCH CANADIAN DOLLAR
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CDH5 O-15 HI-23 LO-30 CL-79

I thought I was being so smart buying the CD the day before the National Budget was announced - not! The CD handed me a bit of a spanking today as the market opened gap lower and took us out of the long trade. The only good thing is that we didn't lose too much money, but it's a small consolation.

I normally don't enter a trade the day after a losing trade; however we've got strong support on the low and a break below here could send rates lower still.

*SELL March Canadian Dollar at 8028
*Stop 8046
*Approximate Risk Exposure: $180 per contract
*Profit Target: 7965 (followed by 7920)
*Approximate Profit Potential: $630 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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8: MARCH SILVER
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SIH5 O-3 HI-6 LO-7.5 CL-4.3

Bit of a bearish day for silver as prices tested support, but seemed to remain solid. Tough to get a trade off in this market with the big ranges. Think I'll stand aside for tomorrow.
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9: DECEMBER EURODOLLAR
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EDZ5 O–115 HI–17 LO–065 CL–09

Big range followed yesterday's small range. Another tough market to get into given the amount of support near the lows. Expecting a rally tomorrow and a testing of resistance before we can sell again.
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10: WILD CARD - APRIL LEAN HOGS
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LHJ5 O-95 HI-50 LO-85 CL-42

Hogs rallied through resistance at the RSI trendline today. Good session to the upside as well as it appeared that the market rallied right from the open. Hogs don't normally rally for consecutive days without pausing, so we'll look for a hiccup and then plan our buy.
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"Tom's Trades" for Thursday, February 24, 2005
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1: MARCH 30 YEAR T BOND
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USDH5 O-3-20 HI-4-14 LO-3-17 CL-3-27

Today was a fun day in the Bonds. We began right after the open by buying 1 at 113-21. About 5 or 6 minutes later the Bonds exploded to the upside. The pullback from -09 stopped us out at 114-05 for 16 ticks, $500. It then started the climb again, topping out at 114-14. A clear failure brought on by -16 considerations. I pushed the envelope a bit but sold 1 at 114-12. We got thru 114-00 with a minimum of fuss and powered right down to ... all together now ... 113-17, a test of 113-16. I bailed at 113-19 for another 13 ticks, $406. Feeling somewhat on a roll, I bought 113-21 despite the late hour of the day. I exited purposely at 113-29 for another 8 ticks, $250. That makes it $1156 for the day.

We closed at 113-27, so we'll be all over 114-00 tomorrow. Buy a break above, sell a retest after the failure as it's heading south. We might go straight to 113-16 or gap down in which case we'll wait for a resolution there. May we do as well tomorrow. Be cautious and precise ... you know they like to come back after giving us a big winner and make us humble again.
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2: MARCH EURODOLLAR
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EDH5 O—005 HI—010 LO—002 CL—007

Still nothing ... TT numbers again tomorrow
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3: MARCH CANADIAN DOLLAR
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CDH5 O-15 HI-23 LO-30 CL-79

Sold 8096 ... a bit sloppy on the fill I thought. I exited at 8050 for $460.

We'll play the TT numbers tomorrow with 8080 added to the mix. Sell a failed test there. I will not buy until a break above 8125.
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4: APRIL GOLD
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GCJ5 O-4.00 HI-6.40 LO-2.80 CL-5.80

TT/$10 channel for tomorrow. They never gave us a a shot at anything today.
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5: MAY COTTON
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CTH5 O-.30 HI-.60 LO-.75 CL-.89

I was stopped out at the open at 49.20 banking 120 ticks or $600. A bit later I sold one at 48.90 and was stopped out at 49.00 for -10. I bought 49.10 and was stopped out at 49.40 picking up another $150.

I will follow the guidance in yesterday's Update for tomorrow.
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6: MAY COCOA
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COK5 O-16 HI-40 LO-15 CL-27

I bought 1622 and was stopped out at B/E. Same numbers from yesterday's update are in play for tomorrow.
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7: MARCH CORN
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CH5 O=2.06 1/2 HI=2.06 1/2 LO=2.04 1/2 CL=2.05 3/4

Barely a 2 cent range for the day andd no where near our numbers. We watched. Same Update numbers for tomorrow.
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8: MARCH WHEAT
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WH5 O=3.12 1/2 HI=3.18 LO=3.10 1/2 CL=3.16

We bought 3.12 1/2 and were stopped out at 3.11 even on a 3.11 1/4 stop. A $75 loser. Came right back and bought another at 3.12 1/2. This one was stopped at 3.16 1/2 for 4 cents, $200

I'm going to stay with yesterday's program again tomorrow. Above 3.12 I'm feelign a little like a fish out of water so I'll just watch unless they give me 3.12 to play.