Traders Helping Traders Daily Update for Thursday, 5-19-05

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Erich's Update for Thursday, May 19, 2005
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Scroll down for Tom's Trades for today!

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"Choosing a goal and sticking to it changes everything." - Scott Reed
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1: JULY CORN
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CN5 O=7 3/4 HI=2 1/2 LO=7 3/4 CL=0 3/4

Corn surprised me a bit today as prices rallied higher than expected. We're getting back into some pretty firm resistance in the 213 area, coupled by an RSI trendline test makes me think we'll see a bounce tomorrow. If we do get a bounce I might entertain a short before the weekend. We'll see.
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2: JULY COTTON
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CTN5 O=20 HI=67 LO=55 CL=80

Cotton prices stalled out today, which isn't really a surprise given the market's decline this last week. I'd like to see prices pull a little higher however and possibly test the resistance around 5380 before falling off again. I know that might be asking a lot of cotton right now but for tomorrow I'm just watching.
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3: JULY BEAN OIL
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BON5 O=07 HI=40 LO=05 CL=26

Bean Oil finally stopped us out of our short position from last week as prices rallied right from the open. We were able to pick up about $450 per contract which made for a pretty good trade overall. Expecting prices to rally tomorrow as well. Looking for resistance at 2265 - 2270 as a reason to sell.
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4: JUNE LIVE CATTLE
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LCM5 O=00 HI=00 LO=60 CL=07.5

Cattle took the plunge today and took our sell order with it. Prices didn't waste much time and fell off slightly after the open.

Bring exit stops at least to breakeven for tomorrow or if you'd like to cover a little profit consider using the intraday resistance at 8630 (probably 8640+) to cover your trade. First target is support at 8505.
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5: JULY COCOA
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CCN5 O=45 HI=58 LO=41 CL=53

Cocoa prices are still stalled out today as the market didn't really go anywhere. RSI is at a testpoint and as such we might expect a bounce tomorrow. I'm going to hold off until we get a confirmation of resistance afterwhich I'll look to sell again.
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6: JULY WHEAT
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WN5 O=12 HI=18 LO=12 C=15

Okay, wheat gave us the 317 test we were looking for when prices got to 318 for a high. I'm holding off one more day looking for a lower session as a confirmation of resistance. If we get that I might look to sell before the weekend. Maybe.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=01 HI=40 LO=00 CL=35

Very strong session in the CD today as the market rallied right from the open. Our first resistance line is just above today's high, at 7950, but given today's strength I'm not certain that it will have much affect on the market.

If rates continue higher look for a 7980 and finally 8000 before getting another chance to sell.
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8: JULY SILVER
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SIN5 O=4 HI=3.5 LO=3 CL=0.5

Yep, silver ran away alright...and in the wrong direction! We have an official change in trend today as silver prices surpassed the 20 day moving average. Look for a sign of resistance for another chance to buy this market. We might get it as early as tomorrow.
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9: MARCH EURODOLLAR
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EDH6 O=.02 HI=.09 LO=.005 CL=.055

The ED gave us our 9610 test today and still remains relatively strong looking. Of course this can be deceiving as rates might adjust themselves tomorrow. Volume has been falling off with the latest rally in rates which would suggest the trend is losing steam, trouble is I don't see anything I want to put money on at the moment.
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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 Thursday, May 18, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=5-27 HI=6-18 LO=5-24 CL=6-10

Due to many factors the bulls are semi in control at the moment. We could only watch as a wicked 3/4 point move up kicked off the day. I doubt we could've gotten in anyway so no big deal. We marched up to 116-18 and attempted higher twice befor failing. I sold at 116-14 and was stopped out at B/E. I resold -14 about 15 minutes later. I exited at -03 for 11 ticks, $343. That put us within the final hour ...quittin' time.

The close at 116-10 leaves us watching 116-16, 116-00 and 116-08 if needed. We equaled the Feb contract highs. I do not expect the bonds to fall off as sharply as we did then, we might even edge higher ... we'll continue our no buy zone and sell failures.
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2: JUNE EURODOLLAR
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EDM5 O=.577 HI=.595 LO=.575 CL=.582

We remain long from .555. We almost made it to the first target as we traded .595 as the high. I'll roll right there if we can edge above 96.600 tomorrow and grab .620 without ceremony if we can extend the reach that far.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=01 HI=40 LO=00 CL=35

Movin' on up! Almost enough enough to trade off 7940 but not quite for me. Those less demanding of S&R (read better analysts than I) may be able to justify buying a break above 40 but then you'll have to contend with resistance at 7980. Might be hard to get comfortable with the RRR. Other than that posibility, we'll wait for 7980.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=6.70 HI=8.90 LO=5.40 CL=8.00

When the window opened we were right on 597. I bought 597.30 almost immediately. I exited voluntarily at 600.50 following a failure at 601 and change. Out with $320. I followed that with another buy. This time at 601.40. I exited at 607.80 for $640. It was obviously all over at that level. I packed it in with $960 for the day.

The full array from TT are in play for tomorrow.
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5: JUNE GOLD
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GCM5 O=0.60 HI=2.00 LO=9.30 CL=1.90

We are still trying to make up our mind here. That was a pretty strong show near end of day. 430/420 reassumed control. I t stayed in teh decision aking zone all day until the move at the end, too late by then.

$10 channel for tomorrow.
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6: JULY COTTON
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CTN5 O=.20 HI=.67 LO=.55 CL=.80

I bought 52.04. I thought there was enough juice at 52.50 to warrant just taking the profit there which I did ... out at 52.40 for $180. We'll play the same numbers from yesterday.
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7: JULY COCOA
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CON5 O=45 HI=58 LO=41 CL=53

Cocoa price action is taking on the look of a bottom forming up. We need a good bit more structure to declare it so officially. I'll continue to monitor price action watching the structure build sufficiently strong enough to trade or for a return to 1480. We discussed this market extensively in tonight's webinar.
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8: JULY CORN
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CN5 O=2.07 3/4 HI=2.12 1/2 LO=2.07 3/4 CL=2.10 3/4

We entered the long from 2.05 3/4. We did survive the night intact with neither of our orders getting hit. We opened and immediately launched to near 2.10. Predictably, we stalled there for a bit presenting an interesting management dilemma. Do we protect the trade against resistance at 2.10 or do we give it a little room to see if there is anything left in the tank.

This gives us a wonderful study to absorb, I think. On one hand we roll the stop up tight ... say 2.09 1/4 preventing the market from back tracking on us. This is what I did. Out at 2.09 1/4 for 3 1/2 cents, $162. I then bought the break above 2.10 at 2.10 1/4. Corn then quickly moved to the next S&R level at 2.12/2.13. I did the same, rolling tight to 2.11 3/4 and got stopped at 2.11 1/2 for another penny and a quarter, $62. On the day we took 'em for $224.

The alternative management couse was to simply provide a bit more room on the rolls so that you stayed in on the pause at 2.10 and then respected the strength of the 2.12 resistance. Had you elected this course you would have made 6 cents, $300 instaed of the $224. Which is correct? The answer is they both are. If you understood the concepts of my management thinking you could have reached the decision on your own dependent on YOUR specific feelings, thoughts and circumstances. Willing to take a bit more risk? Cool, pocket the $300 and move on.

Want a little tighter cruise, want to remove some risk? Tighten it up at 2.10. Is there a big difference between a winner at $224 and $300? I don't think so ... about 25% is all. By understanding management strategies you could easily have taken either approach and the coach would say, "good job". Which one YOU chose really isn't the issue. Understanding that you had choices and being in a position to confidently decide which course best suits you IS the issue! Is the peace of mind and the confidence thing worth $76? Worth a double comission?

My answer was yes. Your answer might have been NO. How cool it is to have options that make sense, that you understand and can adjust, tweak at will according to what's best for you. Do ya' see it?

For tomorrow, we'll play it either way off of 2.12 or 2.10.
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9: MAY WHEAT
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WN5 O=3.12 HI=3.18 LO=3.12 CL=3.15

I missed the first shot at 3.12 but not the second ... I bought 3.12 3/4 looking for 3.18/.19 We made it to 3.18, I rolled tight at 3.17 1/4 and was stopped at 3.17 for 4 2/4 cents, $212.

WEe'll play either way off of 3.12 or 3.18/.19 for tomorrow. Penny and a quarter stops with rolls at the next in succession whole penny. The target on the sell is 3.05 with protection at 3.07