Traders Helping Traders Daily Update for Tuesday 4-26-05

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Erich's Update for Tuesday, April 26, 2005
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Hot off the commodity presses to you! Well, not exactly...the Subscribers got this Monday evening, Test Drivers get it after the fact. To get yours good and clean and fresh, tra la la...go to http://www.supportandresistance.com/subscribe.html

Scroll down for Tom's Trades.
"It's not who you are that holds you back, it's who you think you are not." - Anonymous
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1: JULY CORN
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CN5 O=1 HI=3 3/4 LO=0 1/4 CL=2 1/4

I guess the 217 support was too much for corn today as prices took off in a big way. It's easy to see that the grain markets are especially weather sensitive right now.

We're trading at the 50% retracement level so I think I'll give the market the day off tomorrow. Today's lower close doesn't fill me with a lot of confidence for buying tomorrow.
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2: JULY COTTON
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CTN5 O=25 HI=12 LO=25 CL=01

Nuts. Today's huge range in cotton had me kicking myself for not running the buy trade as well as the sell. As you remember we had the market pegged in a pennant; however since we were closer to the bottom end I only ran the sell order. Today's range makes it very difficult to know what to expect tomorrow. Think it's best to stand aside.
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3: JULY BEAN OIL
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BON5 O=30 HI=39 LO=90 CL=95

What's up with the Bean complex? Corn and grain took off today like wildfire and beans 'n cousins just fell flat. Running the same order for tomorrow, but if we see a break of support we'll look at selling Wednesday.
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4: JUNE LIVE CATTLE
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LCM5 O=40 HI=25 LO=27.5 CL=12.5

Cattle rallied higher on a big opening gap today. This is usually indicative of prices have some upward momentum. We've got the contract highs nearby which should see prices give us some sort of reaction, so it's best to stand aside for tomorrow.
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5: JULY COCOA
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CCN5 O=95 HI=95 LO=83 CL=86

Cocoa inched closer to the 1475 support line today. This market is setting up nicely for a possible countertrend trade similar to one we did a few weeks ago. If we see a test of 1475 tomorrow with a favourable close near the high then we might just try that for Wednesday.
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6: JULY WHEAT
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WN5 O=24 HI=40 LO=23 1/2 CL=30 1/2

Yikes! What a wild day in the wheat market! Yeah, I know we were looking to sell wheat today, but remember I mentioned this market could be in transition...which is pretty obvious after today.

The good news is that we didn't get caught on the wrong side of the market and given the opening gap we would have had a hard time catching this trade (does this sound like sour grapes?) ;-)

Big day means tomorrow could be unpredictable, especially so close to a 50% retracement. I would think a lot of traders would be reassessing their positions, so a stall/pause could be in order.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=68 HI=93 LO=59 CL=81

Looks like the CD is going to call my bluff after giving us an early reaction to the 8150 resistance line. RSI has hooked as well, but it is a bit premature, which makes me a little nervous (not a lot, just a little).

Looking to sell tomorrow on a break of support. The US Dollar looks to be poised for a short term rally, so this should help put downward pressure on the Canadian currency.

*SELL June Canadian Dollar at 8054
*Stop 8071
*Approximate Risk Exposure: $170 per contract
*Profit Target: 7977
*Approximate Profit Potential: $770 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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8: JULY SILVER
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SIN5 O=1 HI=5 LO=5 CL=0.6

Bleech! What a horrible day in silver. I know something big is coming...but I just can't put my fingers on the right numbers. Right now I'm looking at 721 and 725 for support and of course 740 for resistance, but the market isn't giving me a clear entry signal so I still have to wait.
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9: MARCH EURODOLLAR
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EDH6 O=.935 HI=.94 LO=.88 CL=.91

The ED dipped a little lower today...not quite as low as we were looking, but it is getting closer. You can probably go ahead and put on the suggested trade for tomorrow. Remember it is a higher risk trade as rates may not find support; however we're working off a couple of good levels and the risk is reasonably small.

*BUY March Eurodollar at 95.8475
*Stop 95.7975
*Approximate Risk Exposure: $125 per contract
*Profit Target: 96.11
*Approximate Profit Potential: $650 per contract
*RRR: 5:1
*Degree of Risk: Moderate
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10: WILD CARD
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No wild card market for tomorrow.
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"Tom's Trades" for Friday, April 21, 2005
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Hi Gang ... thank you for your indulging me the day off. Jill and Brian's wedding was truly one of the most elegant weddings I've seen in a very long time. It was actually just an excuse to go north and see my 2 youngest granddaughters, Sydney and Courtney. Jacki and I had not seen them for about 8 months and at 2 and 4 years old they need visits much more frequently than that. We'd planned to head home about 10 am Sunday but thanks to a faulty fuel pump in the old Benz we didn't get away until about 6 which got us home about 11pm ... bushed beyond my limits. Somehow road trips are a bit less enjoyable than they were just a few scant years ago.

I traded today and will cover those as well as laying out what I see for tomorrow and deeper into the week. Here we go, then.
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1: JUNE 30 YEAR T BOND
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USDM5 O=4-08 HI=4-10 LO=3-31 CL=4-06

Some time back I wrote we'd see 114-00 but I doubted the markets ability to push much higher unless there was some news that either added to the thought that inflation was heating up or that it was very much under control. So far neither scenario has surfaced thus we find ourselves mired in a 1 point range. Last Monday we pegged the thermometer at 114-19 as the talking heads all were in agreement that inflation was so sedate that the Fed would not be tinkering with rates until probably the September or August meeting at the earliest. We ca expect more of the kinds os action which has prevailed the past 2 weeks. That would be narrow, relatively speaking, ranges and choppy within the -16/-00 triggers. This narrower range price flow is reminisient of the way Bonds were most days several years ago.

I'm going to launch an experiment the balance of this week. I'll be trading -08 and -24 as well as -00 and -16. My recommendation is that you let me be the guinea pig and you watch. If we have some success you may elect to join in. Let's get some data at my expense first. Continue with -00 and -16 and we'll see where the test goes.

Trdaing today was limited at best. I sold 1 at 114-07 and exited at 114-02 for 5 ticks. I bought 1 at 114-03 and waited out about an hour of uninspired sideways junk before we finally made some measureable advance. When we broke above -08 I rolled the stop to -07 and was immediately stopped out. That was essentially the plan. Having given myself permission to do the -08/-24 thing I didn't want it coming back much below -08 without answering the call to action. Out with 4 ticks. I bought -08 once more and was stopped out at -07 for a 1 tick loss. Net on the day 8 ticks, $250.

With the close at 114-06 I'll be focused on 114-08 and 114-00. You all will be looking at 114-00 and 114-16. With the increased array of entries for me comes a necessity for tighter management which will result in more B/E trades and more within 1-2 point rolls when profits are at stake.
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2: JUNE EURODOLLAR
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EDM5 O=.595 HI=.595 LO=.575 CL=.585

We retain our short position from Thursday. Stop is now 96.605 ... just shy of B/E. I hate those round, round numbers. This pegs the risk at $12.50. We press on into tomorrow. If I'm stopped out I'll resell 96.600 on the break.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=68 HI=93 LO=59 CL=81

I didn't like it right from the opening bell. I watched as we approached 8080 but it leaped over it too far for me to get comfortable with the buy. I just let it go its merry way today.

8080 is still the preferred level to my eye. I will take another stab at that level tomorrow. I will take it either way. You can go back to last weekend's TT for the stops and management numbers.

I will also look to buy a retest of the 8016/23 range. I will only buy here as it breaks back above 8023 or tests it with a poke below 8027. Should we slip above 8080 without an entry opportunity, I'll trade 8100 either way as well. Stops at 8093 on the buy and 8107 on the sell. Get this trade to break even on a move above 8111 on the buy and below 8091 on the sell.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=1.70 HI=7.80 LO=1.30 CL=7.00

Didn't give us any of the last set of numbers we pegged on Thursday. I'll trade any of the numbers from last week's TT plus what we added on Thursday last week. Thursday's comments are repeated below and are still valid.
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5: JUNE GOLD
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GCM5 O=4.60 HI=6.30 LO=4.10 CL=5.80

Nothing for us again today. The only play is the 420/430 $10 channel.
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6: JULY COTTON
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CTN5 O=.25 HI=.12 LO=.25 CL=.01

The short squeeze on the expiring month took everyone by surprise today. Today was FND on the May Contract with a lot of delivery notices. Some heavt buying of the physical was noted. Cotton is plentiful and there is no fundamental reason for a move of this magnitude. We might see some more delivery notices surface tomorrow which could bolster trade for another day or so. I look to see a pullback of sizable proportions as early as tomorrow.

I'm watching tomorrow except for one play ... I will sell a break below 55.50 with a tight stop ... 55.63.
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7: JULY COCOA
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CON5 O=95 HI=95 LO=83 CL=86

We had a big gap down day on Friday in Cocoa. Funds AND small specs were bent on selling from Friday thru today. Volume lightened appreciatively today however and we saw a good bit of buying by the trade at 1492 down to the lows at 1483. Weather is good and the peace process in the Ivory Coast, the world's largest growing region.

If the peace process stays on track we'll probably see lower prices still. Some Cocoa watchers are saying 1200 is a real possibility. I did nothing today nor Friday, obviously. 1520 was blown away so easily on Friday. The chart shows us good reason for the volume to wane and prices pull up in the 1485 area.

I'll watch tomorrow looking for more structure to emerge at the current level before jumping on anything.
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8: JULY/MAY CORN
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CK5 O=2.13 HI=2.15 LO=2.11 3/4 CL=2.13 1/4
CN5 O=2.21 HI=2.23 3/4 LO=2.20 1/4 CL=2.22 1/4

Friday is FND for May Corn. OI and volume have dropped off significantly. We'll begin trading JULY CORN tomorrow. Godd movement to the upside today as thoughts are circulating that despite a robust 30% planted number from USDA delays from the weather will show up in the next report.

I did nothing in May today. The gap open took us right into the teeth of the major resistance at 2.13. We made a move on 2.15 and then pulled back into the support, formerly resistance, at 2.13/2.13 1/2. On to JULY.

2.22 is roughly equivalent to 2.13 in the May. I will sell a break below 2.22 tomorrow with a very short stop ... 2.23 1/4. I will also sell a retest of 2.24 that fails with a stop at 2.25 1/4. I'll also buy a break above 2.24. I'm going to hang on to my scalper mentality a bit longer.
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9: MAY WHEAT
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WK5 O=3.13 1/2 HI=3.30 1/2 LO=3.13 CL=3.20 3/4
WN5 O=3.24 HI=3.40 LO=3.23 1/2 CL=3.30 1/2

Same story here as May Wheat marks FND on Friday. We'll likewise move to July in this market. A big move here as well today for mostly the same thinking. 2005 Crpo is 40% planted according to USDA but delays are expected to show up in the next report.

A 9 cent pullback near end of day in Wheat. I did nothing today and don;t anticipate I will tomorrow. I prefer to watch tomorrow. We'll have something on tap for Wednesday, I think.