Traders Helping Traders Daily Update for Friday 4-1-05
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Erich's Update for Friday, April 1, 2005
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Subscribers got these on Thursday Nite...Testdrivers get theirs somewhat after the fact! To get yours BEFORE the action, go to http://www.supportandresistance.com/subscribe.html.
Scroll down for TOM'S TRADES.
Erich will be away from April 5 to15 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 travelling.
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1: MAY CORN
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CK5 O=4 1/4 HI=8 1/4 LO=1 1/2 CL=3
What a crazy day in corn. The market rallied hard only to be turned around before the close. Don't know what to make of it, but we're still long with stops at breakeven. First profit target remains 219 3/4.
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2: MAY COTTON
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CTK5 O=10 HI=10 LO=65 CL=03
Brutal day in cotton as prices opened with a big gap and continued lower throughout the session. I'm still cautiously bearish this market, but can't find a good entry signal. Tomorrow (April 1) is April Fool's Day so I think it's best we leave cotton alone.
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3: MAY BEAN OIL
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BOK5 O=60 HI=05 LO=85 CL=90
Looks like trader's didn't like the news they got in the Planting report today as bean prices (along with the rest of the grains) fell off hard.
We're back to familiar support at the 2280 line and we can use this to initiate a sell position tomorrow if prices continue lower.
Note: I normally don't like starting a new trade on a Friday, so don't feel like you have to take this trade right now. Chances are we will have another chance to sell on Monday.
*SELL May Bean Oil at 2274
*Stop 2307
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2128
*Approximate Profit Potential: $882 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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4: ARPIL LIVE CATTLE
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LCJ5 O=10 HI=10 LO=40 CL=82.5
Mild bounce off the 9040 support area today. Probably will see a higher session tomorrow, but I'm not all that comfortable with the lines we're trading at right now. Think I'll sit this one out.
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5: MAY COCOA
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CCK5 O=05 HI=26 LO=02 CL=13
Cocoa must have sensed my disappointment with it as prices finally got around to rallying today. It was a good session too, with a favourable opening gap - always nice when that happens.
I'm never too keen to hold a cocoa contract over the weekend, so if we see 1669 tomorrow I might be inclined to pack up my toys and go home. In the meantime we can finally bring stops to breakeven.
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6: MAY WHEAT
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WK5 O=36 HI=41 1/2 LO=30 CL=31
I guess wheat played an early April Fool's prank on me today as prices ranged high enough to make me buy before tanking and stopping me out.
I thought I had the market pegged after prices were still behaving themselves after opening range, in spite of the big opening gap. The resistance at 342 proved to be too much however as prices fell like a rock before the end of the day.
Thank goodness we only took a $125 hit.
I normally don't trade a market the day after a losing trade; however I'll put this trade out there for you if you're interested. Like the other grain trades we're looking at, don't feel like you have to take this trade tomorrow. There should be ample opportunity to re-enter the market again next week.
*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: HIGH
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7: JUNE CANADIAN DOLLAR
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CDM5 O=54 HI=82 LO=49 CL=69
Surprise! Another higher day in the CD after a lower day! Not really sure what to make of this market. It definitely is trying to sort itself out though, but I'm not sure it's making any progress.
Nothing for me here tomorrow. I'll be stubborn and hold out for a test of 8356 or 8150 before recommitting to the CD.
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8: MAY SILVER
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SIK5 O=4.5 HI=2.5 LO=1 CL=4.7
Too bad we weren't playing horseshoes as this trade got really close to working out. Missed it by a crummy 50 cents...now you know why I told you it was extremely risky. ;-)
Still think we hade the right idea and might see prices fall off tomorrow...but I think I'll just watch.
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9: DECEMBER EURODOLLAR
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EDZ5 O=.695 HI=.775 LO=.695 CL=.765
The ED had a little fire under it today as rates made a decent rally. It's not so much that rates really gained a lot, but more significantly RSI has had a chance to "refresh" itself.
Now that RSI had pulled back a bit I would welcome a bounce off resistance, which would get me short early next week.
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10: WILD CARD - MAY BEAN MEAL
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SMK5 O=5.5 HI=8.5 LO=5 CL=7
How disappointing is that? Bean Meal rallied hard today and missed our profit target by a measely 4 ticks before reversing and taking us out at breakeven.
If you had the chance to watch the trade during the day I hope you would have captured at least some of the available profits...but for the rest of us sulking is the order of the day.
You could try to sell this market tomorrow below the 185 support. As I mentioned before, it isn't necessary to sell this market going into the weekend. It will be much safer to try and sell it next week, but if you're inclined:
*SELL May Bean Meal at 184.9
*Stop 186.7
*Approximate Risk Exposure: $180 per contract
*Profit Target: 176.6
*Approximate Profit Potential: $830 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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"Tom's Trades" for Friday, March 31, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=0.22 HI=1.14.21 CL=1.12
Today was a very interesting day ... so interesting, in fact, that I will use today as the basis for an entire segment of the upcoming workshop. A report out early in the session was contrary to the best guesses of most all the analysts and economists. They mostly felt we'd see a report that added to inflation fears. The report indicated exactly the opposite ... inflation is well moderted and under control. As a result the market sucked out value added for more agressive future rate hikes.
After a big, swift advance the market cooled and returned to 111.00 ... just like WE knew it would ... it ALWAYS goes to -00 or -16. Look how relaxed we were today. We didn't panic, we didn't go rushing headlong into a trade afraid we'd miss something. The run started at a point of non interest for us, it went crashing thru our point of focus at 111-00. We didn't go chasing it. We sat back waved goodbye with a smile ... knowing we'd soon say hello again at either 111-16 or on the return to 111-00. One or the other was inevitable, wasn't it? Easy stuff, people.
We let the volatility play out ... it was easy, it never gave us reason to do anything because our numbers weren't put in play by market price flow action. This is th epassive benefit side to what we do. It kept us warm and dry until the market came back to IT'S comfort zone ... 111-00. That also happens to be one of our comfort zones. Ain't it funny how that works? It insulated us from the desire to jump on the bandwagon. The correct trading decision was to stay flat which our methods helped us do. A circumstance that begs a bad trade from others but is rendered unapproachable by our methods is as good as a winning trade, I think. Can you see it?
I bought one at 111-02. We went to -12 and failed, out at -08 for 6, $187. Bought another at -02. It went to -08 and failed. We got out at -06 for 4 ticks, $125. Bought again at -03, stopped at -02 for a loss of 1 tick and bought again at -03 which I exited at -08 because of time. We picked up a net 4 ticks, $125 after covering the 1 tick loser. Net on our trades for the day was $437.
The close at 111-12 sets us to work on 111-16 or 111-00 for tomorrow.
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2: JUNE EURODOLLAR
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EDM5 O=.460 HI=.495 LO=.460 CL=.485
I knew there was a bounce in there somewhere fighting to get out the closet! Had it touched .500 and failed I would have sold it. Since it only did .495 I decided to wait until tomorrow. If you did sell it there, I have no quarrel. The stop should either be .505 or .525. Under the circumstances I would opt for ... any guesses? ... you got it ... .505. Why? The perceived disappearing inflation, the bottom forming picture and because I am tighter than Jack Benny.
If you waited as I did, we'll look for a retest to .500, maybe a tad higher and sell on the failure and the break of .500.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=54 HI=82 LO=49 CL=69
I tried 3 times to get one sold. I finally was able to get a fill on the third time at 8274. Lot of good it did ... stopped out at 8276 for a $20 loss. All the TT numbers for tomorrow plus the 8223/11 range for tomorrow.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=6.00 HI=8.00 LO=2.70 CL=7.80
I told you the day was coming ... I bought one at 616.10, had my stop at 615.70, stopped out at 614.70 losing $140. I sold 1 at 615.90, took the profits at 613.80 getting back $210. Back in the black. I was exhausted mentally ... yes, I am a whimp. I just couldn't get a feeling I was in control of anything ... so I sat down for the balance of the day. Too much volatility and too much swing for me.
All the same TT numbers for tomorrow plus the 616 add from yesterday ... 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=573 LO=504 CL=542
I couldn't handle the monster volatility in both the indecies today so I left the Dow alone. Replay of all the TT numbers and the guidance from Monday on 10420/00.
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6: JUNE GOLD **WE'VE ROLLED TO JUNE**
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GCM5 O=8.80 HI=0.70 LO=8.60 CL=9.50
I bought twice ...430.50 and 430.40 ...both were stopped out at B/E. We'll try again tomorrow. The $10 channel.
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7: MAY COTTON
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CTK5 O=.10 HI=.10 LO=.65 CL=.03
We sold 1 at 53.90 and out at 52.90 for $500. All the same numbers for tomorrow.
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8: MAY COCOA
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COK5 O=05 HI=26 LO=02 CL=13
Nothing at our number today. I'll do the same TT numbers tomorrow. I will also buy a break above 1640 or sell a failed retest there.
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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
I bought 1 at 2.14 3/4. When we broke above 2.17 I rolled the stop to 2.16 3/4 and they got us there ... out with 2 cents worth, $100. I'll go with the same numbers for tomorrow. I'll also sell a failed retest of anything above 2.17 or buy a break above 2.18.
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10: MAY WHEAT
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WK5 O=3.36 HI=3.41 1/2 LO=3.30 CL=3.31
I bought 3.35 3/4 and out at 3.40 1/2 as we easily reached our target for 4 3/4 cents, $237. I sold 3.39 1/2 and was stopped out at 3.37 1/4 for 2 1/4 cents, $212. By then it was too close to end of day so I packed it in. Just in time to watch it drop 10 cents in the last 15 minutes. For tomorrow we'll play the TT numbers and I will buy a break out above 3.32 1/4.
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