Erich's Trades for Thursday, August 18, 2005
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Market Update for Thursday, August 18, 2005
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FYI
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Our buddy Tom went in for back surgery today. I haven't heard how he made out yet, but you might want to keep him in your prayers. I know he'd appreciate it.
Erich
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1: CURRENCIES
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September Australian Dollar ADU5
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No bounce, no buy...big dip though! Obviously rates didn't like it where they were, but I'm not sure this market is ready to sell just yet. If we see a hesitation from today's move I might put on a sell order. Maybe.
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September British Pound BPU5
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I'd still like to buy the Pound, but I'm still not comfortable with the extremely oversold market. If we see a bit of normalizing over the next few sessions I'll get more serious about getting in.
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September Canadian Dollar CDU5
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Big "about face" day in the CD. I don't like to enter a market after a big day, so I'll stand aside tomorrow, but I'd love to see support at 8250 hold.
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September EuroFX ECU5
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The Euro followed the other markets lower today away from our buy order. Still in question how low rates will go before recovering...I don't think it's too far away.
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September Japanese Yen JYU5
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The pullback in the Yen continued today as rates headed slightly lower. I'll place a buy order above today's high in case we see an early reversal, but I think we'll see an RSI test first.
*BUY September Japanese Yen at 9177
*Stop 9153
*Approximate Risk Exposure: $300 per contract
*Profit Target: 9277
*Approximate Profit Potential: $1250 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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September Mexican Peso MPU5
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Small move to the downside in the Peso today, but I like the RSI hook so I'll consider tighening my entry figures a bit and enter below 93.200 support.
*SELL September Mexican Peso at 93.175
*Stop 93.575
*Approximate Risk Exposure: $200 per contract
*Profit Target: 89.775
*Approximate Profit Potential: $1700 per contract
*RRR: 8 1/2:1 *Degree of Risk: Moderate
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September Swiss Franc SFU5
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The Franc backed off our buy order today. Think I'll give this one the day off tomorrow.
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September US Dollar Index DXU5
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We're against strong resistance at 8820. If we see rates break here then we'll probably see a test of the contract highs, otherwise a bounce will send rates lower to 8620.
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2: ENERGIES
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October Unleaded Gas HUV5
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Ouch! Not the day I was hoping for, but it was a definite risk that prices would briefly break the double high before reversing...which is what they did.
Nothing new here tomorrow, but expect prices to continue to normalize a bit.
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October Heating Oil HOV5
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Heating Oil was a little more forgiving as prices reversed without rallying, so the market never found our buy order. Still expect more of a retracement tomorrow.
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October Crude Oil CLV5
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Ooooo baby baby! Crude did a monster reversal today which lead the charge for the other two energies. Also expecting more a reversal tomorrow.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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Two hips and hooray! The ED gave us both our hook and resistance confirmation today. Still like the "safe" sell from yesterday, but you could certainly sell below today's low and cover above the high as an alternative.
*SELL June (06) Eurodollar at 95.535
*Stop 95.615
*Approximate Risk Exposure: $200 per contract
*Profit Target: 95.245
*Approximate Profit Potential: $725 per contract
*RRR: 3 1/2:1
*Degree of Risk: Low to Moderate
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September mini-DOW YMU5
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Likely to follow the S&P lower tomorrow, but nothing I see worth trading.
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September mini-NAS NQU5
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Still looks weaker, but nothing I want to try trading.
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September mini-S&P esU5
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Looks the weakest of the bunch, but again nothing worth trying to pick up on.
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4: GRAINS
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September Corn CU5
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Gee, who was that smart trader who said we would see a bounce at the 208 area? ;-) Hoping to see another higher session tomorrow so we can get serious about selling again.
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September Oats OU5
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If Oats lead the way, then we should see another higher day in the grains tomorrow, including this one. Maybe we'll finally get a chance to sell!
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September Rice RRU5
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Rice faltered slightly today as prices didn't trade too much higher than yesterday. You could bring stops up a bit if you wanted (675) or just leave them at breakeven for tomorrow, but the trend seems to be weakening, so I'm not sure what to expect.
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September Soybean Meal SMU5
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Hello! Nice set up in Soy Meal today to sell the market below obvious support. We've got more support nearby, but the trend is building strength so this could turn out to be a nice short. At the moment it is still a bit of a crap shoot though.
*SELL September Soy Meal at 188.9
*Stop 192.3
*Approximate Risk Exposure: $340 per contract
*Profit Target: 176.3
*Approximate Profit Potential: $1260 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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December Soybean Oil BOz5
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Same setup, different flavour, also a bit of a crap shoot.
*SELL December Bean Oil at 2237
*Stop 2271
*Approximate Risk Exposure: $204 per contract
*Profit Target: 2123
*Approximate Profit Potential: $684 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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September Soybean SU5
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Beans seem to have the most favourable setup of the three as we can encorporate the support at the bottom of the channel into the trade and use recent support to cover the position.
*SELL September Soybeans at 601 3/4
*Stop 310 1/4
*Approximate Risk Exposure: $425 per contract
*Profit Target: 566 3/4
*Approximate Profit Potential: $1775 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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September Wheat WU5
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Wheat's heading higher as expected. Hopefully we'll see another rally tomorrow which will allow us another sell.
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5: MEATS
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October Feeder Cattle FCV5
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Feeders are still out wandering in the field. Nothing new happening here...but remember there is an important cattle report out this Friday.
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October Live Cattle LCV5
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Cattle are still chicken as the market continues to trade away from our sell order. There's a biggie report due out Friday, so we'll run the sell for tomorrow and through in a buy trade for the report.
*SELL October Live Cattle at 7917
*Stop 7967
*Approximate Risk Exposure: $200 per contract
*Profit Target: 7637
*Approximate Profit Potential: $1120 per contract
*RRR: 5 1/2:1
*Degree of Risk: Moderate to HIGH
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October Lean Hogs LHV5
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Did someone mention resistance at 6220? Are you beginning to see how powerful support and resistance can be? Hogs made a huge opening gap and big reversal - a classic fade for those unfortunate enough to get caught today.
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6: METALS
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September Copper HGU5
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Got stopped out with $300 in profit as copper made a rather abrupt reversal today. Looks like we might be seeing a change in trend, but the support at 159.50 is the last straw for the bulls.
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December Gold GCZ5
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I told you the 452 line was strong, didn't I? ;-) Gold thought so too as prices took a major dip today. I'll run the buy order again tomorrow, but I doubt we'll get filled.
*BUY December Gold at 452.7
*Stop 448.7
*Approximate Risk Exposure: $400 per contract
*Profit Target: 469.3
*Approximate Profit Potential: $1660 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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September Silver SIU5
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What's this? Is silver giving us a tradable formation? Just a minute while I check to see if there's a pink elephant flying by.
Hope silver doesn't take my joking too seriously and hand me a whipsaw tomorrow, but I'd look to sell the recent low and cover above today's support.
*SELL September Silver at 691.0
*Stop 695.5
*Approximate Risk Exposure: $225 per contract
*Profit Target: 670.5
*Approximate Profit Potential: $1025 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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7: SOFTS
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September Cocoa CCU5
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And this boys and girls is why we place a "just-in-case" order in a market like cocoa...just in case, which is exactly what happened today.
Can't move our stops just yet (unless you wanted to) but hopefully tomorrow we can lessen our risk. First profit target is support at 1207.
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September Coffee KCU5
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Coffee still looks like a sell, but I can't justify the risk exposure since we need to sell below the big dip day. Maybe tomorrow.
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December Cotton CTZ5
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Cotton continues to pull higher today, which is fine with me. I want to sell this market again, but I think I'll hold off until we get closer to an RSI testpoint - probably tomorrow.
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September OJ OJU5
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The OJ trade is losing a lot of its flavour as prices are taking far too long to find the order and head lower. This makes me think we'll see the market rally instead. We could run the trade anyway, it won't matter if prices don't find the order.
*SELL September OJ at 8985
*Stop 9165
*Approximate Risk Exposure: $270 per contract
*Profit Target: 8385
*Approximate Profit Potential: $900 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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Sugar stopped us out at breakeven today as prices bounced early off support. Not a big surprise for a market like sugar though, which is choppy at the best of times.
Nothing new tomorrow.
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