Traders Helping Traders Daily Update for Thursday, June 23, 2005
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Erich's Update for Thursday, June 23, 2005 ==================================================
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1: JULY CORN
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CN5 O=6 HI=6 1/2 LO=8 1/2 CL=9 1/2
Big reaction in corn today. Somebody was certainly cleaning house as prices plummeted from the 236 level. We're just shy of the 227 1/2 support I was looking at the market to recover at and given today's quick move I might hold off until we see either a reaction or possible support at 223.
Watching with great interest tomorrow.
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2: DECEMBER COTTON
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CTZ5 O=60 HI=63 LO=25 CL=29
Okay, so cotton fudged the 5350 line and got to 5363 today...close enough for a market like cotton. Prices fell off sharply today after encountering resistance and the 38% retracement level.
I would consider selling cotton tomorrow on a break below the 5210 support, which should put us back into a downtrend tomorrow. It remains to be seen if the market will find support again - which could cut the move short; however I hope to get stops to breakeven before that could happen.
*SELL December Cotton at 5207
*Stop 5247
*Approximate Risk Exposure: $200 per contract
*Profit Target: 5069
*Approximate Profit Potential: $690 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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3: DECEMBER BEAN OIL
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BOZ5 O=18 HI=20 LO=79 CL=84
A bit of a correction in bean oil today, but the market did manage to hold support. I'm expecting lower prices to follow tomorrow as this market is due for an "adjustment".
Still looking for a buying opportunity around 2450.
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4: AUGUST LIVE CATTLE
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LCQ5 O=72 HI=40 LO=52 CL=00
Cattle continues to normalize a bit today as RSI moved a little higher. We've still got support in the 7950 area and I am expecting another selling opportunity, but I'm hoping we can hold out one more day.
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5: SEPTEMBER COCOA
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CCU5 O=63 HI=80 LO=58 CL=69
Bought cocoa today on a halfhearted break of resistance. You might have skipped the trade given the opening gap however if you're long you'll probably want to bring stops up a bit to take some of the risk out of the trade.
The correct stop placement is still the original 1543 but if you wanted to take some of the sting out of a possible reversal, consider placing stops just below today's low (ie. 1553).
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6: JULY WHEAT
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WN5 O=40 HI=42 LO=35 CL=36
Wheat bounced off the 340 resistance again today as RSI dipped a little lower as well. I might expect to see prices continue lower tomorrow, but I don't think that this is necessarily the end of this move.
I'll just be watching tomorrow.
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7: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=28 HI=29 LO=88 CL=20
The CD was recovering a little more today as well as the market dipped somewhat...but not a lot. I would still like to see a test of the 8060 area before buying the market again.
We're very close to an RSI testpoint which will be our timing tool, so it will be interesting to see if we can get 8060 or if current support will hold.
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8: JULY SILVER
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SIN5 O=9.5 HI=2 LO=9.5 CL=5.8
Silver's hanging in...but not by much. The market did close reasonably low today, which is hopeful for tomorrow but I would try to get the stops to breakeven as quickly as possible - if you're currently short.
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9: MARCH EURODOLLAR
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EDH6 O=.025 HI=.08 LO=.015 CL=.075
If you were short the ED from the week before you would have taken a bit of a hit as the market gapped higher. If you were trying to sell this week, then you're still safe as rates never even got close to our order.
I have to admit I don't like buying the market at these levels and would prefer to sell, but I'll just stand aside tomorrow and see what happens. Today's session was obviously strong...so it's not a good time to sell.
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10: WILD CARD
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No wild card market - yet.
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"Tom's Trades" for Thursday, June 23, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=7-27 HI=8-15 LO=7-23 CL=8-14
A big gap up and a continuation even higher kept us sidelined today. Fine with me, THAT I view as prefereble to taking the kind of risk necessary to buy at this level. The close at 118-14 has mre rooting for a test of 118-16 and a failure I can my teeth into with a short trade from there. It is highly likely we'll see more strength before any tradable shortside moves. Patience is the order of the day.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.210 HI=.235 LO=.205 CL=.230
Apparently, they heard me:) A nice little move in our favor today. We are currently about $87 in the black. 96.235 is some pretty stout support. It would be nice if we could dispatch that early tomorrow and move to .270. That's asking a lot, I know. We'll see what they deal us tomorrow and maybe make an adjustment in our stop.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=28 HI=29 LO=88 CL=20
We gapped lower and continued on down. Eventually we broke 8100. It came at the end of such a significant run I was very leery in selling it so sat tight. It started bouncing in 5-10 point increments so I let it be and moved to other markets.
Fot tomorrow I will play either way off 8120 or 8100.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=5.20 HI=8.70 LO=1.30 CL=6.60
Since I added 645 to the mix yesterday and since that number comes from the daily chart and since 646 came from the weekly I decided to let the market play out and make the buy above 646 and the sell below 645. I bought 646.30 and exited at 647.70 for $110. I that with a sell at 644.80. We fell from the entry straight to 641.30. I made my way to the exit as quickly as possible and mangaed an out at 641.70 for $310. Next up I bought 642.30 as again the 642 I added to the mix came from the chart so the buy was above 42 and the sell below 641.50. I exited at 643.40 adding $190 to the take. Another buy followed at 642.40. We rode this one to 645.30 for $290. About an hour later I sold 644.80 and bailed at 643.00 for another $180. I was plum worn out by this time so I packed it in with a day total of $1080.
All the TT numbers plus those added yesterday are in play for tomorrow.
There is a lesson worth mentioning at this point. I learned a few years ago, back in the day's when I daytraded the emini S&P under Marsh Jones' tutelage, I have both physical and mental limitations. The brain power and stamina it takes to trade at the pace required by what I do is NOT sustainable indefinitely. When you feel the focus go, the sharpness drain away ... don't fight it. Fold the tent, hang out the gone fishing sign. Go hit a bucket of balls, chase your significant other around the house, go play catch with your kid ... anything that takes you out of the trader realm. It is an important lesson to absorb.
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5: AUGUST GOLD
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GCQ5 O=7.80 HI=0.90 LO=6.50 CL=0.50
We can't catch a break lately in Gold. A good sized gap lower put us on the trailer. For those of you not familiar with the term ... when you are involved in motor racing and you have been soundly thrashed by the competition it is said they put you on the trailer. Meaning your car gets packed up for the trip home ... i.e. you are toast, done for the day.
$10 channel and 442 for tomorrow.
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6: DECEMBER COTTON
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CTZ5 O=.60 HI=.63 LO=.25 CL=.29
Another gap opening market. 53.50 was an area of S&R congestion. I jumped the gun a bit and sold at 53.40. I rolled to B/E at 53.30 and again at 53.00. 52.50 was a clear "what's most likely" place and I rolled and was stopped out at 52.60 for 80 points, $400. I followed that trade up with another sell off the retest of 53.00 by selling 52.85 and getting stopped at 52.50 for another 35 points, $175.
I'll trade 51.50, 52.50, 53.00, 53.50 tomorrow with 52.50 being the likely beginning point.
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7: SEPTEMBER COCOA
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COU5 O=63 HI=80 LO=58 CL=69
I bought 1564 and exited at 1576 for $120. In retrospect I should have had 1580 in the plan as well. There wasn't much here today but a coupel of sells off 1580 would have definitely enhanced the take.
1520, 60 and 80 for tomorrow. Be real tight on the management when buying the break above 1560 because of the proximity of 1580. You might want to wait for the break above 1580. Buying a 1560 break would definitely be described as an aggressive trade.
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8: JULY CORN
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CN5 O=2.36 HI=2.36 1/2 LO=2.28 1/2 CL=2.29 1/2
I sold 2.34 3/4. I held it but got stopped right after night trading started at 2.30 1/4 for 4 1/2 cents, $225.
I'll sell a failed retest of 2.32, 2.35 or a break of 2.27 1/2 tomorrow. I'll buy a break above 2.32 1/2.
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9: MAY WHEAT
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WN5 O=3.40 HI=3.42 LO=3.35 CL=3.36
I sold 3.39 1/2 and exited at 3.37 3/4. Sold 3.39 1/4 and dumped it at 3.36 near end of day. I thought long and hard about keeping this open overnight. When it touched support at 3.35 and bounced I was gone as fast as I could peddle. Total of 5 1/2 cents, $275.
#.35 and 3.40 for tomorrow either way.
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