Traders Helping Traders Daily Updates for 5-5-2005

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Erich's Update for Thursday, May 5, 2005
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"Courage is not the absence of fear; rather it is doing what you fear." - Anonymous
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1: JULY CORN
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CN5 O=5 1/2 HI=7 3/4 LO=5 1/2 CL=6

Boink! Got our little bounce off weekly support today as prices traded within yesterday's range. Not a real surprise as markets are prone to "adjust" after big moves. I'd like to see the adjustment continue for another day (or two) before we look at selling again.
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2: JULY COTTON
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CTN5 O=40 HI=00 LO=80 CL=89

Scary day in cotton as the market made a wicked range. The high close suggests that prices aren't liking going any lower and as such we can probably expect a bit of a rally over the next day or two. Watching RSI for a testpoint to time the next trade, but I think it'll come off resistance at 5500.
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3: JULY BEAN OIL
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BON5 O=58 HI=95 LO=45 CL=78

Okay, now this is looking a little more promising today. Bean oil prices rallied as high as the resistance at 2290 - 95 but failed to get any higher. Notice too how RSI and prices are both at the trendline tests, as such we could stick with the weekend sell, or tighten the order in anticipation of a bounce tomorrow.

*SELL July Bean Oil at 2234
*Stop 2267
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2132
*Approximate Profit Potential: $612 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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4: JUNE LIVE CATTLE
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LCM5 O=20 HI=40 LO=85 CL=92.5

Cattle fell off a bit today, but not quite enough for us to get too aggressive with our stops. Ideally you'll leave stops where they are for yet another session; however if you want to reduce some of the risk place stops above today's high by a few ticks.
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5: JULY COCOA
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CCN5 O=90 HI=05 LO=86 CL=96

Nearly the identical range to yesterday's action. I'll run with the same cocoa trade for tomorrow, but it we see prices stall out yet again then I'll be looking to get more aggressive by the weekend.

*SELL July Cocoa at 1474
*Stop 1491
*Approximate Risk Exposure: $170 per contract
*Profit Target: 1423
*Approximate Profit Potential: $510 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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6: JULY WHEAT
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WN5 O=18 1/2 HI=20 3/4 LO=15 1/2 CL=17 1/4

Not too much of a change in the wheat market. Saw prices make another hit on the support today. I don't really expect prices to rally; however your stops should be no higher than breakeven right now. If you wanted, you could place them above today's high. First target is support at 314 1/4 followed by 303.
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7: JUNE CANADIAN DOLLAR
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CDM5 O=10 HI=39 LO=90 CL=29

Bit of an opening gap and rally led the CD higher today. We're right at the 50% level on RSI and the trendline as well, so I'll look at selling the market tomorrow in anticipation of a bounce. Maybe we can pick up a few dollars before the weekend.

Note: It will be less risky to wait for the reaction before selling this market; however I really like the fact I can use 8010 resistance to cover the trade from here.

*SELL June Canadian Dollar at 7988
*Stop 8016
*Approximate Risk Exposure: $280 per contract
*Profit Target: 7811
*Approximate Profit Potential: $1770 per contract
*RRR: 6:1
*Degree of Risk: Moderate to HIGH
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8: JULY SILVER
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SIN5 O=8 HI=5 LO=6.5 CL=1.3

Silver had a pretty strong session today, but look for prices to stall around the 711 resistance tomorrow. If this line holds I might look at selling this market again but right now it's left me with a pretty bad taste in my mouth.
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9: MARCH EURODOLLAR
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EDH6 O=.955 HI=.005 LO=.94 CL=.995

A slightly more aggressive day for the ED today as prices rallied to test resistance. We've now got the market cornered and can look to trade it either way, either above resistance or below support.

*BUY March Eurodollar at 96.105
*Stop 95.95
*Approximate Risk Exposure: $162 per contract
*Profit Target: 96.24
*Approximate Profit Potential: $612 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH

OR

*SELL March Eurodollar at 95.895
*Stop 95.95
*Approximate Risk Exposure: $137 per contract
*Profit Target: 95.67
*Approximate Profit Potential: $862 per contract
*RRR: 4:1
*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 5, 2005
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1: JUNE 30 YEAR T BOND
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USDM5 O=5-05 HI=5-06 LO=3-15 CL=4-21

You can thank the FOMC for this morning's madness as well. The move was so swift it never gave us a shot at the sell. A little after 8am CDT we got a shot at selling -07. I thought we had a pretty good chance of seeing 114-00 again so I grabbed it ... sold 114-07.

We made a run to 113-29 where I moved the stop to 113-31 and got stopped out at 114-01 for 6 ticks, $187. I sold again at 113-27. Before I could even roll to B/E we were at 113-15 back to -22 and down to -16. I exited as fast as I could and got a fill at 113-19 for another 8 ticks, $250.

I bought -22 and withing 10 minutes exited at 113-30 for another 8, $250. I bought another at 114-03 and jumped out at -08 for 5 more, $156. I sold one at -08 and was stopped at B/E. I took a breather for a while as it traded sideways for about an hour. I saw what I thought was a nice setup about 10 after 10 and bought 1 at -08.

Since I was up pretty good on the day I backed off on the roll to B/E and gave it a bit of room and was rewarded by a move up to -22. I exited at -20 as we had moved into final hour territory. Out with 14 more, $437. That's $1280 on the day. With the close at 114-21 we will be looking for trades at 114-16, 114-24 and 115-00 for tomorrow.

The rebound in Bond prices following the morning plunge was in part a reaction to FED comments that it will in all probability start issuing 30 bonds again, perhaps as early as August. I, of course, loved hearing that news.
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2: JUNE EURODOLLAR
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EDM5 O=.585 HI=.595 LO=.580 CL=.585

.595 was awfully close. Still gonna' look for the bounce back to 96.600 or above .610.
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3: JUNE CANADIAN DOLLAR
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CDM5 O=10 HI=39 LO=90 CL=29

I tried to sell it, I tried to buy it ... I couldn't get a thing filled as the bid/ask seemed to be expensive all day. I did nothing
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=7.30 HI=6.30 LO=5.80 CL=5.00

Shortly after our trading window opened we found ourselves back at 586. I did a B/E trade on a buy from 586.40 and then bought one at 586.40 again. This one got up the 591.60 and predictably failed. I exited at 590.90 picking up $450. I was too wrapped up by the Bonds do do anything more. I looked about 12:30 CDT and snapped on off at 591.40. I was thinkin' we might see a return to 600 today. It started going sideways at 594 I stayed with it for a while but I thought it was pretty conclusive it wasn't going anywhere from there so I bailed at 593.90 for another 4250. All the same numbers from weekend TT tomorrow.
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5: JUNE GOLD
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GCM5 O=9.60 HI=0.90 LO=9.20 CL=0.00

Boy they are trying our patience aren't they? Nothing done but there is a trade comin'. $10 channel.
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6: JULY COTTON
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CTN5 O=.40 HI=.00 LO=.80 CL=.89

very strong recovery at the end of the session. We'll be focused on 54.00 tomorrow. Sell a failed retest, buy a break above. Stops are 54.11 on the sell and 53.87 on the buy. Get them each to B/E on on moves above 54.11 for the buy and 53.87 for the sell.
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7: JULY COCOA
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CON5 O=90 HI=05 LO=86 CL=96

I was pretty busy with the Bonds and the Russell today. I watched it a bit at the open. Too wild and wooley for me to follow trying to sneak peeks back and forth so I put it on the shelf. Doesn't look as though we missed anything of significance. Same TT numbers again tomorrow.
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8: JULY CORN
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CN5 O=2.05 1/2 HI=2.07 3/4 LO=2.05 1/2 CL=2.06

I'll play 2.05 tomorrow. Buy the break above, I can't sell at the moment.
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9: MAY WHEAT
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WN5 O=3.18 1/2 HI=3.20 3/4 LO=3.15 1/2 CL=3.17 1/4

I'll sell a break below 3.13 tomorrow or buy a failed test there. 1 1/4 stops and roll to B/E at 3.12 on the sell and 3.14 1/4 on the buy. I'll also buy a break above 3.21 or sell a failed retest there.