Traders Helping Traders Daily Trade Update for Thursday 5-26-05

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Erich's Update for Thursday, May 26, 2005
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Scroll Down for Tom's Trades!

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1: JULY CORN
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CN5 O=4 1/2 HI=7 1/2 LO=8 1/2 CL=2 3/4

In case some of you were wondering why I wasn't looking to buy a break above the obvious resistance at 225, today the market gave you your answer. Today's session was only to clear the tables folks as prices ran through both support and resistance before stalling out again.

With the holiday weekend fast approaching tomorrow is really our last day to trade so taking any position right now is extremely risky. I would rather wait for a more subdued session where we can get our bearings.

I know you're anxious, but I recommend we wait just a little longer.
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2: JULY COTTON
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CTN5 O=10 HI=45 LO=87 CL=37

I'm a little surprised that cotton didn't rally harder today, but the set up now looks as though the market is almost sure to make a rally tomorrow (I think). ;-)

Those of you who have been around for a while will recognize this as a countertrend trade, which you know I hate...but the setup is very promising.

Don't fret if you decide to pass on the trade as we'll get another chance to sell very soon (next week). If you do take the trade I strongly recommend the use of a profit taking order as the move is definitely limited.

*BUY July Cocoa at 5057
*Stop 5008
*Approximate Risk Exposure: $250 per contract
*Profit Target: 5248
*Approximate Profit Potential: $950 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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3: JULY BEAN OIL
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BON5 O=02 HI=39 LO=00 CL=25

Hmmm, 2339...do we think that's close enough to 2340?

Got the test today folks, notice too that RSI is testing the trendline. This is our signal to get our act together and try to sell this market short tomorrow.

Technically the market is still in an uptrend, so this is also a countertrend trade (at the moment); however if we get a decent move to the downside it should easily bring us into bearish territory again. If you choose, you can sit out tomorrow and wait for the confirmation before selling, that's always safer.

*SELL July Bean Oil at 2296
*Stop 2341
*Approximate Risk Exposure: $270 per contract
*Profit Target: 2077
*Approximate Profit Potential: $1314 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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4: JUNE LIVE CATTLE
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LCM5 O=35 HI=65 LO=20 CL=60

A bounce is looking likely for cattle prices tomorrow so if you're still short this market you'll want to have your exit stops above today's high by a couple of ticks to protect as much profit as possible.

Once the pullback is over we can look at re-selling the market, but probably not until after the holiday weekend.
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5: JULY COCOA
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CCN5 O=40 HI=50 LO=27 CL=29

Got short cocoa today on a halfhearted breaking of 1430's support - definitely not the way I wanted to get filled, but not a surprise after yesterday's stronger session.

Hoping to see something more aggressive tomorrow so we can get our stops to breakeven. First target is support at 1319.
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6: JULY WHEAT
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WN5 O=34 HI=39 3/4 LO=25 1/2 CL=30 1/4

Another tug-o-war day in the grains as wheat mimiced what we saw in corn. Big clean out day...but I think we'll wait for the dust to settle before re-entering. Call me greedy, but I'm still expecting a test of support at 321.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=38 HI=54 LO=00 CL=17

Things started well for us in the CD as rates fell off as expected, unfortunately the 7900 support seems to have gotten in the way and held rates fast for the day. Hoping to see the market continue lower tomorrow without finding our stop...which will require a bit of luck.
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8: JULY SILVER
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SIN5 O=1 HI=5.5 LO=0 CL=3.8

Strong day in silver as prices rallied the whole session. I'd look at buying but there's resistance at 720 that's making me a touch shy.

Just watchin and waitin tomorrow.
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9: MARCH EURODOLLAR
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EDH6 O=.03 HI=.07 LO=.005 CL=.04

The ED rallied a little higher today and never found our entry order to the short side. We're getting close to the 9610 resistance again and it will be interesting to see if it is still enough to hold rates down.

Running yesterday's trade tomorrow, but I doubt we'll get filled.

*SELL March Eurodollar at 95.985
*Stop 96.025
*Approximate Risk Exposure: $100 per contract
*Profit Target: 95.785
*Approximate Profit Potential: $500 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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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 26, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=7-01 HI=7-08 LO=6-07 CL=6-14

It took us 2/3rds of the day to get there but, get there we did. I sold 116-28. We easily cruised our way down to 116-07 where upon I threw in a market to exit. We exited at 116-10 for 18 ticks, $562. I thought seriously about buying -08 right after. I thought it looked a lot like a bounce ... I let it go as the market slipped higher ... too high it turns out by the time I made up my mind. I don't thoink I could've gotten -08 or -09 anyway.

The close at 116.14 zeroes our sights on 116-16 or 116-00. First buy is 115-16 or possibly -28 if all is aligned properly.
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2: JUNE EURODOLLAR
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EDM5 O=.585 HI=.590 LO=.575 CL=.580

We're still long from 96.555 with the stop set at B/E. I'm poised to grab .600. We'll see, eh?
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3: JUNE CANADIAN DOLLAR
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CDM5 O=38 HI=54 LO=00 CL=17

I'm still not seeing anything to shout about. I'll remain committted to 7980 for the moment. This is subject to change everyday.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=1.60 HI=2.00 LO=4.80 CL=6.80

I think this might have been the most fun day of trading the Russell so far. The window was raised with the market in mid fall from 611. I jumped on selling 609.80. We easily dispatched 607 and didn't let up a bit until we'd arrived at 605. I watched 10 minutes worth of candles and then banked the trade exiting at 605.40 picking up $440. From there we made a pretty smooth climb back to 607. I bought 607.40 only to be stopped at 607.30 losing $10. I sold 606.80 and closed it at 606.40 for a small commission paying gain and not much more. Next up we bought 607.40 before rocketing back to 610 ... ok, 609.90. I eventually bailed at 609.10 for another $170 which ended my battle with the Russell for the day.

The full array of previously identified levels in TT are at play tomorrow. I don't see any evidence we need to add or subtract any numbers from the array.
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5: JUNE GOLD
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GCM5 O=7.30 HI=9.00 LO=7.10 CL=8.90

Another nothing day. $10 channel for tomorrow ... and a whole bunch of patience.
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6: JULY COTTON
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CTN5 O=.10 HI=.45 LO=.87 CL=.37

Right after the open we had 2 big range candles. I tried to seel the first ... couldn't get it. I turned right around and tried to buy it on the next ... couldn't get it either. I know when I'm not wanted at a party. I split.

Hooked on 50.00 and no t=other for tomorrow.
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7: JULY COCOA
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CON5 O=40 HI=50 LO=27 CL=29

Not today. I'll again play 1460 break out tomorrow. I've repeated yesterday's text to so it's handy.

I will buy a break above 1460 tomorrow with a stop at 1453. Roll to B/E at 1468 and use 1500 as the target. Roll tight, really protect 1480 on the way. TT numbers are still in play as well should we see 1480 or 1500.
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8: JULY CORN
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CN5 O=2.24 1/2 HI=2.27 1/2 LO=2.18 1/2 CL=2.22 3/4

Biggest single range day of the July contract ...so far., 9 cents. The big ... almost 3 cents ... gap open higher pulled the rug from under us. I watched. 2.20 is the number for tomorrow; we'll trade it either way. I'll also take a shot at 2.24 either way. Penny and a quarter stops and rolls.
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9: MAY WHEAT
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WN5 O=3.34 HI=3.39 3/4 LO=3.25 1/2 CL=3.30 1/4

We sold 3.34 1/2. 3.25 just leapt off the chart as the target. Wheat went pretty much straight to it and prompty bounced back 5 cents. I'm out at 3.27 for 7 1/2 cents, $375.

I'll play 3.25 either way tomorrow along with these suspects ... 3.20, 3.35 and 3.40.