Traders Helping Traders Daily Update for Friday June 10, 2005

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Erich's Update for Friday June 10, 2005
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1: JULY CORN
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CN5 O=3 1/2 HI=6 3/4 LO=3 CL=5 1/2

Got a bit of a bounce in corn today, just above the WASDE report due out tomorrow. No real surprise here as the market was likely to adjust a bit as traders jockey for an early position in the market.

Report days are tricky and you certainly don't need to take a position tomorrow; however if you were inclined you could bracket support and resistance and let the breakout tell you which side to trade.

*BUY July Corn at 218 1/4
*Stop 215 3/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 232 3/4
*Approximate Profit Potential: $725 per contract
*RRR: 5 1/2:1
*Degree of Risk: Moderate

OR

*SELL July Corn at 212 3/4
*Stop 215 1/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 205 1/4
*Approximate Profit Potential: $375 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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2: JULY COTTON
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CTN5 O=35 HI=65 LO=10 CL=29

Cotton stopped us out on the open as the market briefly broke yesterday's high before falling off again. We walked with a little over $300 profit per contract which is nothing to get too excited about, but still beats a kick in the head with a frozen boot.

Cotton does look like it wants to continue lower tomorrow but I think I'll pass on this Friday trade and try to pick it up next week.
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3: JULY BEAN OIL
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BON5 O=68 HI=25 LO=62 CL=13

Bean Oil found support in a hurry today as the market opened with a big gap to the downside and faded the rest of the day. I'll look to run the weekend trade tomorrow, but the parameters are a little tight, so I'll adjust them to meet the 2040 resistance.

I'm going to concentrate on the buy tomorrow and will leave the sell side of the trade if prices reverse tomorrow.

*BUY July Bean Oil at 2343
*Stop 2309
*Approximate Risk Exposure: $198 per contract
*Profit Target: 2498
*Approximate Profit Potential: $930 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate
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4: AUGUST LIVE CATTLE
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LCQ5 O=15 HI=40 LO=02 CL=12

Cattle wasted no time getting to the 8200 support line today as prices plummeted lower. In hindsight it could have been a nice little trade; however the problem was finding a suitable exit stop to make things worthwhile.

Hoping for a bounce/stall at 8200 which will let us get short this market next week.
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5: JULY COCOA
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CCN5 O=21 HI=48 LO=10 CL=21

Cocoa made another unsuccessful stab at the 1450 resistance today. Prices didn't do too much on the whole as the market closed where it began. RSI is suggesting that we could see lower prices and another testing of the 1400 support line. Standing aside for tomorrow.
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6: JULY WHEAT
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WN5 O=13 3/4 HI=17 LO=12 1/2 CL=14 1/4

Wheat came just a couple of ticks shy of our revised 311 target and hit our exit stop today, taking us out of the trade with a little over $200 profit per contract.

We're trading off strong support and resistance right now and will bracket them both to trade the breakout from tomorrow's WASDE report, but I'm favouring the long side.

*BUY July Wheat at 320 1/4
*Stop 316 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 335 3/4
*Approximate Profit Potential: $775 per contract
*RRR: 4:1
*Degree of Risk: Moderate

OR

*SELL July Wheat at 310 3/4
*Stop 314 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 295 1/4
*Approximate Profit Potential: $775 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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7: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=91 HI=03 LO=66 CL=71

A bit of a surprise in the CD today as the market broke support at 7990 - 8000. I thought for sure we would see a bounce there, but it didn't happen that way. Think I'll stand aside for tomorrow.
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8: JULY SILVER
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SIN5 O=6 HI=6 LO=1 CL=7

Holey Moley, talk about a move from right out of left field! Silver prices tanked today which is not what we were expecting. I thought we would see the market show us some support which would give us a chance to buy, but now that plan goes right out the window!

Nothing happening here tomorrow for me.
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9: MARCH EURODOLLAR
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EDH6 O=.045 HI=.06 LO=.99 CL=.045

The ED had a very unpredictable session today, falling right through the 9604 support we had been eyeing. The market might find some support off the 9600 area, but I'm going to wait for confirmation before getting into anything.
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10: WILD CARD - SOYBEAN MEAL
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SMN5 O=9.3 HI=3.5 LO=9.1 CL=2.9

Bean Meal made a nice recovery off the 210 support today which is also the 38% retracement of the last uptrend. You'll also notice a considerable amount of congestion at the 213 resistance area which we can use for a buy entry tomorrow.

*BUY July Soybean Meal at 214.3
*Stop 211.8
*Approximate Risk Exposure: $250 per contract
*Profit Target: 222
*Approximate Profit Potential: $770 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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"Tom's Trades" for Friday, June 10, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=8-05 HI=8-15 LO=7-24 CL=8-08

Gap down open took us well past 118-16. I sold 1 at 117-29 and was stopped at -30 for loss of 1 tick. I then sold 118-13 and closed it out at 118-05 for 8 ticks, $250. That was it for the day.

The close at 118-08 was interesting. I'll let this level slide and wait for 118-00 or 118-16 to play. No buy policy still prevails.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.265 HI=.270 LO=.210 CL=.260

Big pop lower but it snapped right back. Still a watcher ... woooooooo.
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3: JUNE CANADIAN DOLLAR
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CDM5 Oy74 HIy86 LOy50 CLy55

Same deal tomorrow ... Could it be any more obvious? We'll play either side of 8000. We'll sell a rise back above 8010 and/or sell a retest of 8000 that fails. Stops are 7997 on the buy and 8003 on the sell. Get it to B/E at 8015 or 7991.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=0.20 HI=7.20 LO=6.60 CL=6.50

Today was roll day. I traded June thru the day, today, but will roll to September for tomorrow as September becomes the front month in all the Indecies. That means we must develope a new slate of numbers to trade ... you'll find them below.

I bought 616.90 after the failure at 616.60 and boom ... what was THAT? We shot up to 620 like a rocket ... and promptly failed. I bailed at 619.30 for $270. We returned to 617.10. If it had dropped to 616 anything, I'd have bought it again. Sorry I didn't! I finally got back on the bus, buying 621.30. I thought it was an omen that having added 626 yesterday we went right to it ... and failed ... I jumped out at 625.40 for $410 selling 2 so that I was now short 1 from 625.40. I bailed out of this one at 624 even for another $140. I bought 626.40 and promptly got my posterior handed to me. Out at 625.50 for a $90 loss. Done for the day.

Ok, here's the dope on September. September has been operating in territory about 150-200 points higher than June. That isn't a lot and I suspect that most of the numbers we have been using for June trades will eventually reestablish themselves as the power points for September over time.

September is not nearly as rich in structure as was June so we want to take a step back, dial out a little of our aggressiveness until we richen up a bit. You following me?

Having said that, here are the actual numbers in descending order which I will trade either way upon the market's arrival or use as management "what's most likely"s: 628, 626/625 as a range, 621/620 as a range, 616.50, 614, 610, 607.50, 599.50/.00 as a range, 596 and 577. Keep the June numbers handy and don't hesitate to fold them in as warranted.
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5: AUGUST GOLD
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GCQ5 O=5.60 HI=7.10 LO=3.00 CL=6.10

Nothing for us in Gold today. Frustrating, to say the least. Almost got down there low enough to allow a buy. Not quite good enough though.

$10 channel again tomorrow.
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6: JULY COTTON
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CTN5 O=.35 HI=.65 LO=.10 CL=.29

A gap up open sped us right by the 47.08 planned buy. I bought 47.10 on the pullback and was stopped at B/E. I then sold 46.95. Once we got down near yesterday's low at 46.20, I thought that was a pretty good place to watch for management help. Sure enough, it got to 46.21 and flipped around on us. I was stopped out at 46.50 on a 46.25 stop. We picked up 45 points, $225.

I'll replay the 47.00 trade tomorrow.
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7: JULY COCOA
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CON5 O=21 HI=48 LO=10 CL=21

I sold 1438 and was stopped at 1445 losing $70. I resold at 1434 with a 39 stop. I thought the turn around at 1410 was pretty telling and managed to bail at 1418 for $160.

I'll go with 1440 again tomorrow.
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8: JULY CORN
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CN5 O=2.13 1/2 HI=2.16 3/4 LO=2.13 CL=2.15 1/2

I exited at 2.13 3/4 for an even 5 cents, $250. The support at 2.14/2.13 was formidable, I thought. Once we got hung up there it was pretty obvious we weren't going any lower ... a pretty good whisper from the market.

I'm on the sidelines tomorrow with the report due and the weekend in front of us.
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9: MAY WHEAT
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WN5 O=3.13 3/4 HI=3.17 LO=3.12 1/2 CL=3.14 1/4

I missed the first bounce higher and then bought 3.13 later in the session. I jumped out at 3.16 as the late session volatility kicked in and I wanted no part of it.

I'm an observer tomorrow due to the report and the weekend. Have a beauty y'all.
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