THT Big Weekend Edition - Part Two - Tom's Trades

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Big Weekend Edition, Part Two - Tom's Trades
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To view the Test Drive version of Part One - Erich's Trades - go to http://www.supportandresistance.com/testdrive.html

To get these on Sunday each week, along with Part One of course, go to http://www.supportandresistance.com/subscribe.html

This has been a very full week with a capital "F". Thank you all for your good wishes regards Jacki's surgery. She is doing just fine and recovering quickly … too quickly by my estimation. She's up and around to an extent causing me to nag at her to take it more easy … typical.

My oldest granddaughter celebrates her 19th birthday today … my God, where did the time go! My sweet Nahtassha Neekohl Satchiko Kohara has become a woman in the blink of an eye. My son, Jeff, turns 30 next week. Inescapable realization … I'm gaining elder statesman status much before my mind is ready to accept it.

I'm sitting here in my cubicle at the house constructing this as my next oldest g-daughter, Ke'Le is on the laptop, sitting next to me doing her homework. She's 15. Man, it's getting scary. For those of you with kids of your own who may be a bit younger than I … take the time to spend moments with them as much as you can, talk to them, nourish them, enrich their lives … the memories will sustain you later on. They will become priceless at sunset.

The coming week should be an interesting one. We have some economic issues providing volatility to the stock markets, currencies and most notably the interest rate issues. We're sneaking up on the summer season for grains which is always problematic. These factors always play hard on directionally focused traders.

It's time to think through the benefits of being a forecaster NOT but simply an observer of price flow, letting the market dictate whether buyers or sellers we will be. Who knows more about the market's action than the market? No one.

If the market is going to talk to us only a fool would refuse to listen or, worse, prefer to talk over the top of it spouting predictions based on assumptive mathematical equations. Let's be smart!!

Here we go, kids … put the capper on last week with the review and drag out the treasure maps for the paths we'll take next week.
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Trade Review
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I didn't do much on Friday for obvious reasons. I did a little in Bonds before I took Jacki in and then looked back in about 11 am my time. Most everything was done by then.
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JUNE TBonds
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About 5 minutes into the session I sold 114-28. When the stronger than anticipated jobs number came out we got some extreme volatility. Since the break was hard in our direction it gave me some choices. I could play it conservatively rolling the stop tight near the bottom of the move … IF I could move that fast.

The second alternative was to go with the flow a bit. Let the market play out, see where we were when the dust settled and then make the appropriate response. The risk in this course was how hard the Bonds would bounce back before the dust settled. I decided to go for it a bit since I was essentially playing on their dime. I jumped ship at 114-04 after the market pulled up at -02 and went green.

If I'd been really on my game I would've reversed right there … I wasn't and didn't. Out at -04 for 24 ticks, $750. I sold at -07 after it topped out at -10/-11 and was stopped at B/E. The pattern was becoming apparent. I next bought at 114-03. We went to -08 and I reversed the trade selling 2 at -07 taking 4 ticks and ending up short 1.

Based on the fact we'd ended a number of probes lower at -02 I put in a limit at -03 and exited there for another 4. I've now accumulated a $1000 and it was time to take Jacki over to the hospital. Done for the day.
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JUNE Eurodollar
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The jobs report got us. I was stopped out of the long trade at 96.580 for a $75 loss. I pretty much messed this trade up. I retrospect I should have been ready to reverse the position at 96.600. By the time I saw the clearer vision it was a combination of too late and too involved with the bond trade. Lesson learned.
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JUNE Canadian Dollar
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It looks like we had some good numbers in play. If you followed the guidance in the Thursday Update you should have made some … on a sell of the break below 8040 and the arrival at the 8020 support should have taken you out with a coupla' hundred. You should have bought the break back above 8040 and made a few hundred more … possibly after a B/E trade.
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JUNE Gold
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Following the $10 Gold Channel should have produced some profit on a sell around 428.40 or so. Looks to me like close to $300 was a definite possibility.
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NEW TRADES …
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JUNE TBonds
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They did it to us again … Friday's close at 114-00. I always like to see the market move to the -00 or -16 then break one way or the other. You can play it straight away from here. Just know that doing so carries a little bit more risk than when we can observe to move to the number. We now will have to wait for some movement away from 114-00 which they'll probably give us on the open but maybe not. The numbers for focus are 114-00, 113-16 and 114-16 with -24 and -08 also of interest.
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JUNE Eurodollar
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There is structure at 96.540 to launch from … with either a buy on a retest or a sell on a break. The stop on the buy is 96.530 and .55 on the sell. The target for the sell is 96.460 and 96.600 on the buy. RRR is great on the sell at 8:1 but at 4:1 on the buy it's pretty skinny.
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June Canadian Dollar
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I was very happy with the CD's flow on Friday … it really embraced the obvious S&R levels with everything it did for the most part. We settled Friday at 8063. We'll play within the boundaries of 8080 and 8016 on Monday utilizing 4 levels of S&R … 8080, 8060, 8040 and the range at 8016-8023.

Here's the plan, we'll sell a retest at 8080 or buy a break above. Stops are 8087 for the sell and 8073 on the buy. Roll to B/E at 90 on the buy and 70 on the sell. Target for the buy is 8140 and 8000 on the sell. The buy needs to be rolled tight at 8100, 8115 and 8130. The sell roll triggers are 8060, 8040, 8025 and start squeezing it at 8010. I'll sell a break below 8060 but not buy the failed retest of it. The stop is 8067 and we roll to B/E at 8053.

The balance of the management can be found in the numbers above. At 8040 I'll sell the break below and/or buy the failed retest. Stops are 8043 on the sell and 8033 on the buy. Targets are the same. Management is again picked up from above. At 8023/16 I will not sell but will buy the failed retest as it rises above 8023. The stop is 8019 or 17. Again, management is derived from the previous levels cited above.
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June Mini Russell 2000
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Given the action racked up last week we have no changes to the array of tradable levels. Here's the array of numbers I'm willing to trade … 640/639, 635, 633, 629, 623, 621, 616, 614, 607, 601/00, 591, 586, and 574. All of them can be done either way depending on the markets guidance EXCEPT 574 and 639.50.

639.50 can only be sold and 574 can only be bought. They all are in play as roll points during any active trade. Stops on entries are about $120 back of the fill. Once in the trade you have to give these trades $200-$250. In between roll points, bring the rolls within $120 again.
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JUNE Gold
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They say timing is everything and it struck Gold for me on Friday. The $10 channel has been an under performer of late and we finally got a nice play on Friday. I missed it. With close at 426.90 Friday we'll look for a retest up above the 428.50 level and a failure with confirmation to get short or a fall that presses below 421.50, tests 420 and begins to rise for a buy.

Do not be shy about taking profits within the 422-428 range. It isn't going to travel the full distance most of the time. Since we take the view Gold is unlikely to move outside the $10 we can free our minds of any big trade fog and do the right thing by managing tightly and taking $200-$400 captures with a clear conscience.
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JULY Cotton
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I'm going to severely limit my trading targets in Cotton tomorrow by only playing 2 levels as ambush points … 54.00 and 53.00. I'll buy a break above 54.00 with a stop at 53.83 for risk not exceeding $120 and hopefully closer to $100. Roll to B/E at 54.11. The target is 55.00 with intermediate rolls at 54.25, 54.45 and 54.75. That gives us an RRR of about 5:1.

I'll also sell a failed retest at 54.00 with a stop at 54.11 and a roll to B/E at 53.90. The risk is less than $100. I'm going to push the envelope on the target in setting it at 51.50 for RRR of better than 12:1. That's a stretch, to be sure. I mean you can see it but … Along the way you need to give props to 53.50, 53.00 and 52.50. Also include 52.00 by virtue not of the structure but its "roundness".

The second number I'll play is 53.00 either way. Sell the break below with a stop at 53.15 for risk of under $100 and a B/E roll at 52.90. The target is the same 51.50 from above as are the roll triggers. This gives us RRR of about 7.5:1. Buy the failed retest there with a stop at 52.87 for risk of less than $100. Roll to B/E at 53.11. The target has to be 54.00 for about a 5:1 RRR.

Keep RRR in line regardless of the given roll triggers. NEVER let yourself continue to be involved in a disadvantageous proposition.
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JULY Cocoa
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What could Cocoa do to make this look any more like a bottom? Danger, Will Robinson. I'm going to shelve trading 1480 area. Obviously we will buy a break above 1505 and that's all I'm set to do for right now. The stop will be 1499. The roll to B/E at 1511 and the target is 1560 for about a 10:1 RRR.
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JULY Corn
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I will buy a break above 2.10 or sell a retest and failure there. The stop on the buy is 2.09 ¼ for about $50 of risk and we roll to B/E at 2.11. On the sell the stop goes at 2.10 ¾ for about a $50 risk again and the B/E roll comes in at 2.09. The targets are 2.05 on the sell for about 5:1 and 2.17 for RRR of about 7:1. Roll triggers are 2.08, 2.13 and 2.14/15 I will also buy a failed retest at 2.05 with a stop at 2.041/4.
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JULY Wheat
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I will buy a break above 3.20 or sell a failed retest there. I will also buy a failed retest at 3.12 ¾ down to 3.12 even. The stops are back a penny and a quarter. Rolls to B/E come at a penny and a half of accumulated profit.

That's it for this edition. See you at the Daily Update and Wednesday night at the Webinar. Equal parts good, solid analysis and mean, cold-blooded management … it's what we do; it's how we level the playing field; it's how we win.

-Tom