Daily Updates for Thursday March 31, 2005

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Erich's Update for Thursday, March 31, 2005
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Subscribers got these on Wednesdat Nite...test drivers get theirs somewhat after the fact! To get yours BEFORE the action, go to http://www.supportandresistance.com/subscribe.html
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Erich will be away for part of next week while on the road to California for the Seminar. There won't be any updates from him for the period he is on the road as finding a good internet hookup can sometimes be a pain. Tom will doing the updates for period Erich is on the road.
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1: MAY CORN
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CK5 O=4 HI=4 1/2 LO=2 1/4 CL=2 1/2

Near identical day to yesterday as prices stayed bound between 214 1/2 and 213. Leave exit stops at breakeven for tomorrow's Prospective Planting report. If today's action in Beans and Oats is any indication we should be on the right side of the market, otherwise we'll reverse and sell.
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2: MAY COTTON
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CTK5 O=20 HI=58 LO=85 CL=38

Cotton headed lower today but not enough to make me want to sell. I was hoping for something a little more substantial but didn't get it. Still not comfortable with a buy, but I might entertain it if we see today's support hold. We'll see.
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3: MAY BEAN OIL
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BOK5 O=01 HI=85 LO=88 CL=48

Didn't I tell you that bean oil was a wicked market? This is twice in as many weeks that bean oil has whipped us before breaking out. At least last week we were able to pick up some profit to offset the loss, but this week the market left without us. I thought for sure that the Planting Report tomorrow would have given us one more day. Guess I shouldn't think. ;-)
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4: ARPIL LIVE CATTLE
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LCJ5 O=70 HI=00 LO=45 CL=75

If I wasn't such a stickler for staying with the trend I would get pretty serious about selling cattle tomorrow; however my trading rules won't allow it right now.

I wouldn't mind seeing cattle stall out a bit, but I have a feeling we will see a decline tomorrow. That's okay though because it should give us another buying opportunity in a couple of days.
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5: MAY COCOA
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CCK5 O=76 HI=87 LO=71 CL=79

Still hanging in the cocoa trade...but just barely. We really need to see something more aggressive to the upside tomorrow or I think the market's going to take us to lunch.

Might run the sell order tomorrow as well, just in case we see something more substantial to the downside. I don't usually like to do this, but I was hoping the market would have moved more decisively by now.

*SELL May Cocoa at 1558
*Stop 1571
*Approximate Risk Exposure: $130 per contract
*Profit Target: 1518
*Approximate Profit Potential: $400 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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6: MAY WHEAT
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WK5 O=36 1/2 HI=37 3/4 LO=32 CL=33 1/2

Wheat continues to bounce around the 50% retracement level. Prices didn't do much today, probably in anticipation of tomorrow's report. We've got reasonable support and resistance to trade from, so I'll bracket them both and trade the breakout side.

*SELL May Wheat at 329 3/4
*Stop 333 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 319 1/4
*Approximate Profit Potential: $525 per contract
*RRR: 3:1
*Degree of Risk: Moderate

OR

*BUY May Wheat at 338 1/4
*Stop 335 3/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 354 3/4
*Approximate Profit Potential: $825 per contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate
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7: JUNE CANADIAN DOLLAR
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CDM5 O=47 HI=66 LO=11 CL=24

Up, down, up, down...it's like trying to trade a teeter totter...geesch! Nothing interesting in the CD today. Still on hold until we either get closer to 8356, which is looking more and more unlikely, or support at 8150. Note, if you wanted to be aggressive on this trade you could short below today's low as lower rates are looking likely for tomorrow.
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8: MAY SILVER
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SIK5 O=8.5 HI=7 LO=7 CL=4.7

Well, if you took yesterday's "suggested" trade you would have done alright as silver made a bee line to the 718 - 719 resistance. I don't think the rally will last however as RSI is right at a test point and I think we will see a reversal tomorrow.

Got $200 bucks you don't need? Then you could try and sell the market in anticipation of resistance holding. Note that this is extremely risky and you will likely lose your investment; however it could be a great trade if it works.

*SELL May Silver at 718.5 (limit)
*Stop 722
*Approximate Risk Exposure: $175 per contract
*Profit Target: 675.5
*Approximate Profit Potential: $2150 per contract
*RRR: 12:1
*Degree of Risk: HIGH
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9: DECEMBER EURODOLLAR
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EDZ5 O=.695 HI=.71 LO=.68 CL=.695

The ED's getting warmer, but not quite hot enough to sell just yet. Actually the risk is so small that you could take the market short below today's range if you wanted, and cover the trade above the high, but I think I'll wait one more session.
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10: WILD CARD - MAY BEAN MEAL
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SMK5 O=7.5 HI=2.5 LO=7.5 CL=92

Bean Meal easily found our buy order today as prices powered through resistance. Bring exit stops to break even for tomorrow. First profit target is resistance at 198.9.
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"Tom's Trades" for Thursday, March 31, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=0-12 HI=0-25 LO=0-03 CL=0-22

Finally, we're getting a little range in the day's trade. We started the day selling 1 at 110-14. We got a preety smooth even run down to 110-03. The tank went empty there and I jumped out at 110-05 for 9 ticks, $281. I actually reversed there selling 2 ... 1 to exit the long and 1 to initiate a long trade. We clawed our way up to 110-14/15 and again it was obvious we'd run the tank try.

When the candles turned from green to predominantly red, I heeded the voice in my ear and bailed ... out at 110-13 picking up another 8, $250. We replenished the fuel stores and set sail north again. I bought again at 110-20 and was stopped out at 110-17 giving back 3 of the 17 we'd captured earlier. The close at 110-22 has us looking for trades off 111-00 or 110-16 for tomorrow.
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2: JUNE EURODOLLAR
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EDM5 O=.460 HI=.465 LO=.450 CL=.460

*yawnnnn* ... more of the same. Patience my friends, patience.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=47 HI=66 LO=11 CL=24

Sometimes I just shake my head in wonderment at the sheer awesomeness of S&R. It is truly humbling that they allow us such clarity so frequently. Sold one at 8257. When we broke our roll point at 20 going to 16, I brought the stop to 2121 and was stopped out at 23 for 34 points, $340. For the balance of the day we pretty much just sat there at 20 bouncing occassionally to 30. Never gave us a look at anything further.

In addition to the TT numbers which I'll continue to play, 8220 picked up additional power in the past couple of sessions ... actually it's an S&R range between 8211 and 23. I'll buy a retest of 8220 as it rises above 23. The stop is 17. Roll to B/E at 8230. I'll also sell a break below 11 with a stop at 13 or 17 ... your choice ... and roll to B/E at about 8205.

The close at 8224 has us very tight to it ... make sure it's a retest before going in.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=7.60 HI=6.40 LO=7.30 CL=6.30

I guess they figured we'd done well enough yesterday that they'd shut us out today. Zip City. All the same TT numbers for tomorrow plus let's add 616 to the mix ...you can go either way, selling a break or buying a retested failure.
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5: JUNE $5 DOW
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EYMM5 O=440 HI=571 LO=438 CL=558

When the window opened we made a break south and set low of the day as it turned out. Would have been very nice if they could have just taken a little lower allowing us in on the added 10420/00 play from yesterday. No such luck. We had to wait for 10460/80 to pop onto the screen. I bought 10466 ... just in time to catch a rocket. We went straight to 10510. Perfect. It backed up a bit from that level and I bailed at 10500 for $170. After pausing to catch its breath off we went again. I bought 10514 and it soon ran out of gas. I was stopped out at 10530 for 16 ticks, $80. Replay of all the TT numbers and the guidance from yesterday on 10420/00.
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6: APRIL/JUNE GOLD
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GCJ5 O=6.20 HI=8.00 LO=6.00 CL=6.90
GCM5 O=8.80 HI=0.70 LO=8.60 CL=9.50

We will trade JUNE GOLD tomorrow ... we are done with April.

We got close to the trigger today but it was late in the day and didn't quite get to the levels we needed for the $10 ... nothing done.

JUNE GOLD is at a little higher level than ASpril ... about 2 and a half to 3 bucks. We should have a shot at something tomorrow as a result. $10 channel it is ... with one modifcation, however. 428 is a strong area of support on the June chart. We'll delay our sell just a tad and do it as it breaks below 428.
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7: MAY COTTON
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CTK5 O=.20 HI=.58 LO=.85 CL=.38

I'll play 54.00 or 54.50 again tomorrow as well as keeping an eye out for TT numbers. I'll only sell failed retests of those numbers. "No buy" zone.
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8: MAY COCOA
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COK5 O=80 HI=93 LO=76 CL=81

Teasing us a bit, trying to lure us to fudge on our numbers ... ain't gonna' do it, wouldn't be prudent. I'll do the same TT numbers tomorrow.
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9: MAY CORN
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CK5 O=2.14 HI=2.14 1/2 LO=2.12 1/4 CL=2.12 1/2

Nothing doin' here. That's a sweet double top up there at 2.14 1/2. I won't do anyhting until after the report has been released at 7:30 Chicago time. We'll see where we are and go with the TT numbers or play the double top ... sell a retest and failure, buy a break above.
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10: MAY WHEAT
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WK5 O=3.36 1/2 HI=3.37 3/4 LO=3.32 CL=3.33 1/2

I sold the break of 3.35 at 3.34 1/2 and I'm out at 3.33 ...faked us out a bit. Picked up $75. I sold it again ... same number... a bit later. We couldn't have been more wrong as it immediately reversed and went higher. I left the building at 3.35 losing $25. I am nothing if not persistent. I sold it again at 3.34 1/2 and again bailed at 3.33 for another $75. Ugly is what it was. Same deal tomorrow ... 3.35 and 3.40.