Traders Helping Traders Daily update for Wednesday Mar. 9, 2005

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Erich's Update for Wednesday, March 9, 2005
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The Members got this on Tuesday evening, but the Test Drive edition is sent after the fact. To get yours on time and in full, go to http://www.supportandresistance.com/subscribe.html

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1: MAY CORN
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CK5 O=2 1/2 HI=5 1/4 LO=1 3/4 CL=4 1/4

Corn showed us some support today in the 211 area. Prices reacted to support a bit early as they only made it to 211 3/4. No matter. A higher session tomorrow will get me looking long again.

If you wanted to be aggressive on the trade you could buy in above today's high; however we've got a big report out later this week so we could see prices flounder a bit.
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2: MAY COTTON
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CTK5 O=80 HI=70 LO=55 CL=52

Bit of a surprise today in the cotton market as support held and prices rallied higher. I'm still on the look out for a retracement of sorts; however I'll also look at buying on a break of the resistance on today's high.

If you decide to try either of these trades, remember this is cotton, a market that can be very wild at times.

*BUY May Cotton at 5181
*Stop 5143
*Approximate Risk Exposure: $190 per contract
*Profit Target: 5487
*Approximate Profit Potential: $1530 per contract
*RRR: 8:1
*Degree of Risk: Moderate to HIGH

OR

*SELL May Cotton at 5029
*Stop 5066
*Approximate Risk Exposure: $185 per contract
*Profit Target: 4806
*Approximate Profit Potential: $1115 per contract
*RRR: 6:1 *Degree of Risk: HIGH
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3: MAY BEAN OIL
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BOK5 O=82 HI=73 LO=65 CL=43

If you left your buy order in until today's close you would have been filled long during the last hour of trading. Not my favourite way to get into a market as closing range can be almost as unpredictably as opening range.

Leave exit stops where they are and keep your fingers crossed for tomorrow. We definitely need a bit of luck to stay in this trade without getting our stops hit.
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4: ARPIL LIVE CATTLE
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LCJ5 O=10 HI=40 LO=90 CL=25

Do you see what I see? I'm talking about that tiny little pennant that has formed in cattle over the last couple of days. It's pretty obvious the market isn't sure what's going to happen next with both bulls and bears sitting on the fence.

We can sit on the fence too and be ready for them once they make their move. I would look at placing two orders for tomorrow, one to buy and another to sell; although I would much prefer to sell this market rather than buy it, but we'll see what we get.

*BUY April Live Cattle at 89.72
*Stop 89.37
*Approximate Risk Exposure: $140 per contract
*Profit Target: 91.32
*Approximate Profit Potential: $640 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH

OR

*SELL April Live Cattle at 88.67
*Stop 89.07
*Approximate Risk Exposure: $160 per contract
*Profit Target: 85.42
*Approximate Profit Potential: $1300 per contract
*RRR: 8:1
*Degree of Risk: Moderate to HIGH
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5: MAY COCOA
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CCK5 O=90 HI=99 LO=67 CL=69

Boink! 1800...what did I tell you? Okay, now the big question is whether it will hold or not. I'm hoping so, but it might be a little premature to sell below today's low. I'm hoping for another lower session tomorrow so that we can sell below that.

Please cocoa, don't run away on us again! Pretty please!
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6: MAY WHEAT
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WK5 O=31 HI=41 LO=30 1/2 CL=37 1/4

Wheat played out much like the Bean Oil trade today where prices rallied from the open but didn't find our buy until closing range. If you did get filled you'll have to leave exit stops alone for tomorrow and cross your fingers and toes that we don't get our stops hit.

First profit target 365 1/4.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=71 HI=48 LO=70 CL=47

Nuts. Few things are as disappointing in trading as lining up a market only to have it gap your entry and void your trade. That's what the CD did to us today as rates posted a tremendous rally. We've got resistance at 8265 - 8270 nearby. Maybe we'll get another chance at this market before the weekend.
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8: MARCH SILVER
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SIH5 HI=1 LO=9.5 C=3.8

Today's silver spike looks much more impressive on the daily chart than it really is. While we were flat this trade today, if you had tried to buy it with yesterday's parameters you would have been gapped this morning as the regular session began at 749 and quickly shot to 753 and the high of the day shortly after that. All in all it would have been a VERY difficult move to catch.

No doubt silver's looking strong again, but in all honesty I can't put together a trade that I'm really comfortable with. Hopefully we'll see prices settle down a bit and give us another chance in a day or two.
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9: DECEMBER EURODOLLAR
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EDZ5 O=.965 HI=.975 LO=.93 CL=.97

What is it with all the opening gaps today? The ED gapped our entry as well which put the trade on hold for opening range. After the first 30 minutes the market was still trading below our entry so I pulled the trade.

It really was a judgement call as we only missed by a couple of ticks. If you took the trade anyway then you're currently short. If you can afford the trade, leave stops where they are, otherwise bring them above today's high by a couple of points.
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Tuesday, March 8, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=2-30 HI=2-31 LO=2-08 CL=2-14

A sizable gap down open took us below 113-00. We sold 112-29 and were stopped out at 112-20 on a -19 stop for 9 ticks, $287. We then sold 112-15. This one was stopped out at 112-11 adding 4 ticks $125. I sold again at 112-14 and was stopped out at B/E. we ended our attempts for the day.

The close at 112-14 has us in proximity to 112-16; that becomes the focus for tomorrow. Don't trade right off the -14 if we open there. Make it go back up a bit and come back thru it before jumping anything.
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2: MARCH EURODOLLAR
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EDH5 O=.005 HI=.005 LO=.000 CL=.002

I'm out at 97.000 ... B/E. We only have about a week to go before Last Trading Day. Tomorrow I will begin folowing the June contract and will have an analysi for you tomorrow. Notice, I said analysis, not a trade. We'll see.
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3: MARCH CANADIAN DOLLAR
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CDH5 O=71 HI=48 LO=70 CL=47

A power move that never gave us a shot. It's back to the drawing board. There isn't any structure up here I'd be comfortable trading, so we watch a bit.
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4: MARCH MINI RUSSELL 2000
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ERTH5 O=4.30 HI=5.50 LO=7.20 CL=7.80

We sold 644.20 after the initial opening climb failed rather dramatically. We were stopped out at 638.90 collecting $530. I couldn't get back on a number after that although I watched pretty intently for the balance of the day.

It is becoming increasingly clear that I am daytrading here. The volatility is such that it is demanded. I don't know that I like the feel of this despite the fact we've thus far done passably with our trades. I am listening every minute for the other shoe to drop. I've also been somewhat dismayed by the market demanding bigger stops and less agressive rolls than I'm comfortable with. We'll continue our little experiment but the jury is still out.

We are back to the same level from our initial TT writeup ... 640.00 and more specifically the 637.90 level we'd ID'd as the sell trigger. Go back to the 2/27 edition and reacquaint yourself with the numbers there for that is the active plan for tomorrow.
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5: MARCH $5 DOW
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EYMH5 O=925 HI=956 LO=900 CL=917

Nothing here today. I'm an observer again.
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6: APRIL GOLD
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GCJ5 O=6.90 HI=1.30 LO=6.70 CL=1.10

Nothing today, focus for tomorrow shifts to the 440-450 channel. $10 Channel tomorrow. Be sure of the confirm and let it get out of the decision making zone before going after anything.
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7: MAY COTTON
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CTK5 O=.80 HI=.70 LO=.55 CL=.52

Nothing here today. I spectating tomorrow.
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8: MAY COCOA
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COK5 O=90 HI=99 LO=67 CL=69

We started the day staedily climbing only to give it all up right at the end of the session. We'll still focus on 1720 tomorrow.
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9: MAY CORN
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CK5 O=2.12 1/2 HI=2.15 1/4 LO=2.11 3/4 CL=2.14 1/4

We did get the better of the 2 alternative orders ... out at 2.12 1/4 in the night picking up 4 1/2 cents, $225. I bought 2.12 1/2 this morning shortly after the open. Other than one quick foray up to 2.13 3/4 we spent much of the day wallowing around at 2.12 1/2 to 2.13 1/4. In the final hour we moved up to 2.15 1/4. I'm doing much the same as yesterday, only in reverse. I have the stop now at 2.14 1/4 and a limit order to take profit at 2.16 1/4. Pretty much a carbon copy of the thought processes from yesterday.

If I get taken out overnight, I'll be back on 2.17 tomorrow ... buying a break above 2.18 and selling a failed retest of 2.17
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10: MARCH WHEAT
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WK5 O=3.31 HI=3.41 LO=3.30 1/2 CL=3.37 1/4

We bought 3.31 1/2. With the exception of a couple of small pullbacks we climber higher most all day accelerating in the last hour. I was pretty committed to keeping this trade open overnight. I was keeping a hard eye on the big resistance overhead at 3.38 though. When we hit 3.41 I moved my stop to 3.39 3/4. I did not want this thing backing up on me and I SURE didn't want to be hanging around very long if we broke back below 3.40. They threw me out at 3.39 1/2. As it turned out I was pretty happy about that as we plunged to 3.36 in the final 5 minutes before settling at 3.37 1/4.

Tomorrow we'll play off 3.38 just exactly as we described in TT from the weekend. Buy the break above; sell the failed retest as it drives lower.
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