Traders Helping Traders Daily Update for Tuesday, 5-17-05

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Erich's Update for Tuesday, May 17, 2005
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Scroll down for Tom's Trades!
"Choosing a goal and sticking to it changes everything." - Scott Reed
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FYI
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I'm out of town Tuesday through Thursday this week so the nightly updates are likely to be a little later than usual. I apologize for any inconvenience.

-Erich
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1: JULY CORN
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CN5 O=6 HI=7 1/2 LO=5 3/4 CL=7

Corn stopped us out shortly after the open as prices rallied off last weeks support. Look for resistance at 210 to possibly hold the market down. If we get a reaction here I'll probably try selling again.
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2: JULY COTTON
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CTN5 O=10 HI=15 LO=00 CL=01

I take back every rotten thing I ever said about the cotton market. Today cotton fell off further allowing us to pick up a little over $1000 at our first profit target.

Remember from the weekend edition of the ezine I mentioned that this might not be the end of the move and to look for a test of 5180? Well today's low at 5200 might be as close as we get.

If you're still short this trade bring exit stops to just above 5250's resistance to protect your profits going into tomorrow. Next target is 5050.
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3: JULY BEAN OIL
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BON5 O=00 HI=23 LO=95 CL=16

Smallish day for Bean Oil as prices contended with the support at 2200 and resistance above the market at 2225. Does that number sound familiar? It should, it was the major support area at the bottom of the larger trading range. If you're still short this market bring exit stops to just above 2225 to lock in profits.

Next target is support at 2161.
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4: JUNE LIVE CATTLE
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LCM5 O=30 HI=30 LO=82.5 CL=95

Ta-da! Your friends and family are all amazed that the resistance at 8730 held today...but not you, because you know how support and resistance works you expected a reaction here today and that's exactly what we got.

While I'm not usually keen on taking a countertrend position I will consider selling cattle tomorrow if we break today's low. At the moment this appears to be a short term trade as support at 8600 could foul things up for us.

*SELL June Live Cattle at 8672
*Stop 8717
*Approximate Risk Exposure: $180 per contract
*Profit Target: 8505
*Approximate Profit Potential: $670 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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5: JULY COCOA
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CCN5 O=20 HI=54 LO=17 CL=51

As expected cocoa took a bounce off the weekly support at 1420 today. If you took profit on target then you pocketed about $660 per contract. Today's higher close looks like the market might rally tomorrow, so if you're still short bring those exit stops in above the 1460 area.
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6: JULY WHEAT
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WN5 O=05 HI=07 1/2 LO=04 CL=06 1/4

If you left your wheat stops at breakeven then you are still short this market, otherwise prices probably tagged your order during today's range for a small profit of $175 per contract. No biggie (I hope) as I think we'll get another chance in a day or two.

Watching RSI to signal our next entry. We're not done here yet!
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7: JUNE CANADIAN DOLLAR
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CDM5 O=77 HI=92 LO=55 CL=79

The Canadian Dollar free fall continued today as the market tested the support at 7850. Notice the indecisive close? We will likely see a bounce here beginning tomorrow. Once rates get back to 7950-ish we'll get more serious about selling again.
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8: JULY SILVER
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SIN5 O=4 HI=9 LO=9.5 CL=5.8

Not much of a day in silver as prices remained relatively subdued. Probably see a test of either the 705 resistance or the 682 support in the next day or two. I still like this market short though, so I'll be focusing on selling opportunities.
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9: MARCH EURODOLLAR
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EDH6 O=.99 HI=.05 LO=.99 CL=.025

The ED continued higher today but seems to be losing some of its upward momentum. RSI is still at a testpoint so a reversal tomorrow is likely. As I mentioned before countertrend trades aren't my favourites; however we do seem to have a pretty good setup for tomorrow. The only problem is that support at 9590 might cut our ride short.

*SELL March Eurodollar at 9598.5
*Stop 9603.5
*Approximate Risk Exposure: $125 per contract
*Profit Target: 9567.5
*Approximate Profit Potential: $775 per contract
*RRR: 6:1
*Degree of Risk: 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 Tuesday, May 17, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=5-14 HI=5-29 LO=5-14 CL=5-20

I sold at 115-27 and exited the trade at 115-21 for 6 ticks, $187. There was the potential for 1 more trade but with the light volume and the final hour upon us I let it go.

The close at 115-20 leaves us marking the same numbers as triggers ... 116-00, 115-16 or 115-24 if the set up is right. I still think buys are dangerous and will go at least one more day eschewing same.
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2: JUNE EURODOLLAR
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EDM5 O=.575 HI=.587 LO=.572 CL=.582

Sit tight was the answer as we suspected. Same guidance for tomorrow as given in TT.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=77 HI=92 LO=55 CL=79

More down but a weak day none the less. I'm not inclined to do any thing down here until we get some definition in the structure. Sit tight.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=4.00 HI=3.50 LO=3.00 CL=3.50

I bought 586.30 not long after the traing window opened. It continued on up to the 589 level and fizzled. I exited at 588.50 picking up $220. I should have bought the break above 591 but it was too late in the day so I let it go ... unhappily.

The full array from TT are in play for tomorrow.
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5: JUNE GOLD
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GCM5 O=9.70 HI=0.10 LO=8.20 CL=9.30

Nothing there for us today. It's trying to decide 420-30 or 420-10. The preponderance of evidence looks like it may be 420-410.

$10 channel for tomorrow.
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6: JULY COTTON
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CTN5 O=.10 HI=.15 LO=.00 CL=.01

A gap down at the open took us below our number and set Cotton off on another day of price give up settling at 52.01. I will play 52.00 either way tomorrow if they give us a look at it. Gaps and almost nil retracements have made it hard for us to get anything going here.

Sell a break below 52.00 with a stop at 52.11 and a B/E roll at 51.90 or 11 points below the fill. You can sell anything inthe way of a break down to .85. We'll buy a retest of 52.00 that fails and begins moving higher with a stop at 51.93 and a B/E roll at 52.11. Target on the sell is 49.00 and 54 on the buy. We are in a down trend, no doubt, but this level between 5150 and 52.00 has been a pretty effective turning point protecting the downside.
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7: JULY COCOA
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CON5 O=20 HI=54 LO=17 CL=51

To say we found some support is an uderstatement. That was a classic bootlegger turn if ever I saw one. We'll continue to wait and watch 1480 for a chance to play.
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8: JULY CORN
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CN5 O=2.06 HI=2.07 1/2 LO=2.05 3/4 CL=2.07

Comeback Kid strikes again. That was pretty powerful stuff. I peaked in on the night session Sunday night when the market opened and again early Monday morning. It was pretty obvious we'd obliterate 2.05 on the open. I bought 2.06 at the open really hoping the power generated overnite would push us to 2.10. We only made it to 2.07 3/4 where resides some decent resistance. I bailed at 2.07 1/2 for $75. Focus for tomorrow is 2.05 and 2.10. I'm still very much in scalp mode so I'll play either number either way ... buy or sell breaks and failed retests
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9: MAY WHEAT
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WN5 O=3.05 HI=3.07 1/2 LO=3.04 CL=3.06 1/4

Same deal as Corn pretty much ... so I was ready to go at the bell. I bought 1 at 3.04 3/4 with as top at 3.03 3/4 instead of 1/4. We wasted no time in moving to 3.07 1/2 ... a decently strong resistance point. I was gone at 3.07 when I saw the failure for .02 1/4, $112.

For tomorrow I'll play the 3.04 buy again as well as buying a break above 3.08 even with 3.12 looming overhead. You can bet I'll be rolled tight as a sow bug there though.