Traders Helping Traders for Wednesday, June 29, 2005

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"Tom's Trades" for Wednesday, June 29, 2005
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1: SEPTEMBER 30 YEAR T BOND
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USDU5 O=8-27 HI=8-28 LO=8-11 CL=8-16

An opening gap lower confirmed my suspicions from yesterday's comments. We sold 118-27 and got stopped out at 118-23 for 4 ticks. I sold -23. I rolled to B/E at 19 and to -17 when we broke -16. I exited by choice at -13 for 10 ticks. There appeared no futher setups at our numbers and then we were into the final hour.

The close at 118-16 has us ready to go tomorrow on a break lower from there. No buys. I expect to see as much as a full point come out of the bonds tomorrow so be on your toes.
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2: SEPTEMBER EURODOLLAR
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EDU5 O=.205 HI=.215 LO=.185 CL=.195

We were stopped out at 96.205 for a whopping $25. I'm done with the Eurodollar until Friday at the earliest.
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3: SEPTEMBER CANADIAN DOLLAR
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CDU5 O=25 HI=55 LO=07 CL=39

I began trying to sell the break below 8120 but couldn't get it done. I bought 8110 again and jumped off the bus at 8138 for $280. I left some stuff on the table today. The 2 failures at 45 looked defining to me. I was wrong, of course and my conservative view probably cost me a a hundred bucks or a bit more. It is a good exercise to look hard at the RRR scenario at the 8145 failures. I think it is a good illustration of the clarity of the call to action that periodic RRR calculations can provide. If you're wrong the worst that happens is you leave something on the table. If you reverse the action the worst that can happen is you you lose or give back lots of the accumulated profits. I would prefer to leave it on the table ... sort of like we leave milk and cookies for Santa Claus ... appease the trading gods.

I'll play the same three numbers again tomorrow.
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4: JUNE MINI RUSSELL 2000
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ERTM5 O=0.80 HI=4.70 LO=0.70 CL=4.60

All in all a pretty cool day for us. After a bit of a slow start the market respected our predetermined numbers allowing us a couple of fairly easy trades. As the trading window opened we were wallowing around at 633 ... not one of our numbers unfortunately. As we took out 637 I bought 637.30. I jumped out at 638.30 for a hundred. We came back to 637.40 which allowed me to buy 637.60. I exited by choice at 640.40 for $280. From there I managed to sell the low of the next candle at 639.70. I bailed at 640.00 for a $30 loss. I then bought 640.30 and exited at 641.60 for $130. My fingers were flying pretty good at this point. I bought 640.30 once more and exited at 645.40 for $510. Wheww!. I was done ... literally.

The full array of numbers for tomorrow.
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5: AUGUST GOLD
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GCQ5 O=9.00 HI=9.30 LO=7.20 CL=7.70

Good sized gap down. I never felt we got the confirmation sufficient to sell one. $10 Channel for tomorrow.
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6: DECEMBER COTTON
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CTZ5 O=.40 HI=.40 LO=.85 CL=.99

I sold 54.95 and we were off to the races before I could even blink. I bailed at 54.15. I didn't expect 54.00 to be as big a factor as it turned out to be. A good lesson in respecting those big, fat round numbers. Let's make a rule, shall we? We'll ALWAYS protect them with a roll ... period. Out with $400.

We'll revert back to the numbers from last week. 53.50, 53.00, 52.50, 52.00 and 51.50.
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7: SEPTEMBER COCOA
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COU5 O=37 HI=38 LO=06 CL=09

I sold 1526 and got stopped out at 11 for $150. I had rolled the stop to 1511 when we broke below 10 on the ol' once broken you won't find me when you come back.

I'll go with 1520 and 1585 again tomorrow.
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8: JULY CORN
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CN5 O=2.20 1/2 HI=2.21 1/2 LO=2.16 1/4 CL=2.18 1/2

Well, there definitely wasn't any turn around to this Tuesday. I did nothing today.

I will play 2.17/2.16 as a range tomorrow. I will also play 2.20. Either way, peolpe. Penny and a quarter ... stops and rolls.
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9: MAY WHEAT
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WN5 O=3.29 HI=3.30 LO=3.25 1/2 CL=3.27 3/4

I tried to sell something above 3.30 and they wouldn't let me. Nothing for us today. I'll play 3.31 and 3.25 1/2 tomorrow. Either way. Penny and a quarter stops and rolls.
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Erich's Update for Wednesday, June 29, 2005
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"In matters of conscience, first thoughts are best; in matters of prudence, last thoughts are best." - Robert Hall
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FYI
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I apologize for the lateness of this update. A personal matter arose which had to be dealt with immediately. You will likely be reading this Wednesday morning - these are your trades for today.

Sorry for the inconvenience,

Erich
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1: SEPTEMBER CORN
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CU5 O=9 1/2 HI=1 LO=6 CL=7 3/4

As suspected corn never rallied high enough today to find our buy order; however the market did hold support which is very encouraging for tomorrow.

I will look at buying corn on Wednesday if we see it trade above today's high. I'd rather wait for prices to breach the 235 resistance, mind you, but this will place more money at risk.

With the RSI testpoint I'll look at buying early in hopes of keeping risk to a minimum.

*BUY September Corn at 232 1/4
*Stop 227 3/4
*Approximate Risk Exposure: $225 per contract
*Profit Target: 255 1/4
*Approximate Profit Potential: $1150 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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2: DECEMBER COTTON
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CTZ5 O=40 HI=40 LO=85 CL=99

Oh sure...now you do as your supposed to! @#$%! cotton market!

Cotton gave us a big decline off the 5540 - 5550 resistance today. I expect prices to head lower tomorrow, but I'm not selling. In fact I would look for possible support at 5270 as a chance to get long.
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3: DECEMBER BEAN OIL
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BOZ5 O=05 HI=21 LO=16 CL=71

Bean Oil continued lower, giving us a serious test of the price trendline as prices reacted a little early to the 2400 support area. Expect prices to rally tomorrow, but the problem is finding the right spot to buy.

*BUY December Bean Oil at 2523
*Stop 2479
*Approximate Risk Exposure: $264 per contract
*Profit Target: 2678
*Approximate Profit Potential: $930 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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4: AUGUST LIVE CATTLE
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LCQ5 O=90 HI=05 LO=02 CL=10

There you have it boys 'n girls, the market finally hooked off the RSI trendline today. Notice too where prices found support? Yep, right on the ole 8000 level from which we tried to trade yesterday.

We've got the green light to sell tomorrow. This is a little more aggressive than waiting for the confirmation (ie. a lower session tomorrow) so decide for yourself if you're up to the risk.

*SELL August Live Cattle at 7977
*Stop 8042
*Approximate Risk Exposure: $260 per contract
*Profit Target: 7772 (watch out for 7850)
*Approximate Profit Potential: $820 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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5: SEPTEMBER COCOA
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CCU5 O=37 HI=38 LO=06 CL=09

A "textbook" day in cocoa as prices continued to test the 1500 support area. RSI is at a testpoint, and since this is the fourth bounce off the trendline I would favour a break rather than a bounce. For this reason I would look to sell the market short tomorrow if we trade below 1500.

*SELL September Cocoa at 1498
*Stop 1517
*Approximate Risk Exposure: $190 per contract
*Profit Target: 1431
*Approximate Profit Potential: $670 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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6: SEPTEMBER WHEAT
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WU5 O=39 1/2 HI=41 LO=35 3/4 CL=38 1/4

Wheat support held today as prices traded in a moderate range. I would look to buy the market long above today's high, with exit stops below the obvious support on the low. If that's a little on the rich side, then you can save a couple of dollars by placing stops below the 337 support but I don't think I'd go much tighter than that.

*BUY September Wheat at 341 3/4
*Stop 336 3/4
*Approximate Risk Exposure: $250 per contract
*Profit Target: 366 3/4
*Approximate Profit Potential: $1250 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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7: SEPTEMBER CANADIAN DOLLAR
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CD=5 O=25 HI=55 LO=07 CL=39

Near identical day to what we saw yesterday as the CD continues to test both support and resistance. We had been concentrating on a buy scenario as this is the market's dominate trend; however you could also treat the current formation as a channel and trade the breakout side.

Tomorrow's FOMC report will likely have some residual effect on the Canadian Dollar, but for the time being I'll still look to buy.

*BUY September Canadian Dollar at 8163
*Stop 8147
*Approximate Risk Exposure: $160 per contract
*Profit Target: 8238
*Approximate Profit Potential: $750 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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8: SEPTEMBER SILVER
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SIU5 O=9.5 HI=9.5 LO=0 CL=4

Silver made a big move to the downside today easily filling our short order. If this were any other market I would consider leaving the stops where they are for the moment; however you never really know with silver so I'll bring the stops to breakeven and hope for the best.

First target is support at 695.5.
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9: MARCH EURODOLLAR
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EDH6 O=.065 HI=.075 LO=.03 CL=.04

Interesting day in the ED today as rates traded lower on a gap. No doubt traders are trying to position themselves ahead of the FOMC report due out tomorrow morning.

Notice that RSI shows the market right at the 50% level of the indicator - suggesting no bias in either direction. It's not a coincidence that it should find this neutral zone the day before the report you know.

As you know I'm a bit bias when it comes to the ED and would rather sell it than buy it; however I will consider bracketing today's range and letting the market tell me which way to trade:

*BUY March (06) Eurodollar at 9608.5
*Stop 9602.5
*Approximate Risk Exposure: $150 per contract
*Profit Target: 9627.5
*Approximate Profit Potential: $475 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH

OR

*SELL March (06) Eurodollar at 9602.5
*Stop 9608.5
*Approximate Risk Exposure: $150 per contract
*Profit Target: 9584.5
*Approximate Profit Potential: $450 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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10: WILD CARD
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No wild card market - yet.
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