Erich's Update for Friday, August 26, 2005

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Market Update for Friday, August 26, 2005
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1: CURRENCIES
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September Australian Dollar ADU5
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The AD is flirting with a trend change as rates rallied higher today. I'll keep watching RSI for the next testpoint before shorting.
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September British Pound BPU5
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See, who says crossing your fingers doesn't help? Did you see the Pound trade higher today? That was all because of my crossed fingers. ;-)

I might be a little premature, but I've got to lessen the risk in this position somewhat, so I'm bringing stops in below today's low. First profit target is resistance at 183.19.
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September Canadian Dollar CDU5
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Go figure we'd get the hesitation I was looking for on a Friday. Maybe we'll get really lucky and see some profit taking before the weekend. Either way I'm just watching tomorrow.
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September EuroFX ECU5
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Caught a break today as the Euro gave us a clean fill when rates broke resistance. It's always a challenge balancing risk with range when it comes to these *big* markets, but today the Euro did right by us.

I'm not crazy about all this risk however, so I'm bringing stops below the 123 support line for tomorrow. It might prove to be a little tight, but we'll push the trade.
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September Japanese Yen JYU5
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Unusual day in the Yen as rates continue to bounce around a lot. We've got the makings of a small pennant for tomorrow and you could trade it as such, but I think I'll pass.
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September Mexican Peso MPU5
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Regardless of where you put your exit stop the Peso would have found it today. I had mine just above yesterday's high, so I got stopped right after the open for about $700 in profit per contract. Nice way to go into the weekend, don't you think?
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September Swiss Franc SFU5
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Darn Swissy gapped our entry again! This is the second time an opening gap has sidelined a perfectly good trade. Oh well, can't do too much about it now other than sulk.
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September US Dollar Index DXU5
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The USD made a good move to the downside today and there is room to bring stops to breakeven if you choose, otherwise leave them above 8800 for one more day.
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2: ENERGIES
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October Unleaded Gas HUV5
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Got tagged in the Unleaded trade today as prices ranged below the 185.45 line where we had our stops. We're still walking with over $900 per contract, so I don't feel too bad about that. Nothing new for tomorrow.
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October Heating Oil HOV5
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Heating oil continued higher, almost getting to our intended profit target *if* we had taken the trade. Expecting a reaction here tomorrow.
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October Crude Oil CLV5
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Big range in Crude today as well. I think we might be seeing oil prices head lower in a hurry real soon. Even so I don't want to hold an open position over the weekend in this market.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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We're getting closer to selling the ED again as rates showed us resistance today. I'll run the same trade again tomorrow as this is a relatively *safe* market to hold if we have to.

*SELL June (06) Eurodollar at 95.59
*Stop 95.655
*Approximate Risk Exposure: $160 per contract
*Profit Target: 95.245
*Approximate Profit Potential: $860 per contract
*RRR: 5:1
*Degree of Risk: Moderate
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September mini-DOW YMU5
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The Dow is looking up as the index gave us the support hesitation we were looking for. I'm going to press my luck and hold out for another stall tomorrow. If we get it we'll probably look at selling.
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September mini-NAS NQU5
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Did someone say something about watching the 1560 line? Yeah, okay I missed it by 2.5 points, sorry about that. ;-)

If this weren't Friday we would have an ideal opportunity to bracket the support and resistance and trade the breakout, but since it is Friday I think I'll hold off.
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September mini-S&P esU5
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Got the reaction we were looking for today. Isn't it great how support and resistance works? Yeah, I think so too.

Like the other indices I'm going to hold off taking a position on Friday and hope for a wishy-washy session before recommitting.
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4: GRAINS
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December Corn CZ5
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Sold corn today as prices broke support. There's not too much you can do with the stops at the moment, but if you *must* tweak, use the 221 resistance to hide the stops.
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December Oats OZ5
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Oats continue to avoid our short order. This isn't a bad thing mind you as all this hesitation has given the market a chance to refresh itself. I'll run with the same trade again tomorrow.

*SELL December Oats at 156 3/4
*Stop 160 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 142 3/4
*Approximate Profit Potential: $700 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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September Rice RRU5
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Rice has been true to form with the sideways channel prices seem to be stuck in. If this continues we should see lower prices tomorrow and support at 667-ish.
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September Soybean Meal SMU5
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Turns out selling yesterday was the right thing to do as the market would have gapped our order today thereby voiding our trade.

Prices made a nice move to the downside and you should bring the trade at least to breakeven for tomorrow in anticipation of a bit of a bounce. If you want to cover some profit use the 184.5 - 185 resistance level.
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December Soybean Oil BOZ5
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Caught a nice breakout through support today as bean oil prices fell off sharply. Bring stops to breakeven for tomorrow. First profit target is support at 2123.
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September Soybean SU5
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Okay, this one's borderline. If you gave the market a couple of ticks, as per suggestion, you would have sold beans today. If you ran the trade *as is* then you might have been left on the sidelines as beans gapped the entry.

If you are short then you'll want to bring stops at least to breakeven or above 592 to protect some of that profit.
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September Wheat WU5
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If you tighten your stops like I did then you would have got hit today with $225 profit as wheat made a bit of an unexpected bounce. If you're still short this trade you'll want those stops above today's high. First profit target is support at 300 3/4.
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5: MEATS
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October Feeder Cattle FCV5
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Day's like today just leave me scratching my head. Nothing new here tomorrow...maybe ever.
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October Live Cattle LCV5
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We must be bordering on the Outer Limits as we're losing control of our horizontal and vertical. Nothing I want to trade here tomorrow.
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October Lean Hogs LHV5
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Well it's nice to see pigs made a decent trade again. The market made a very clean breakout through resistance and easily found our buy order in the process. Bring stops at least to breakeven for tomorrow, or just below the 83.00 resistance if you want to give the trade a little elbow room.
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6: METALS
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September Copper HGU5
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Sold copper today on a nice breakout through support. You'll want to bring stops in at least a little for tomorrow's session and might consider the resistance at 166.30 to place stops above.
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December Gold GCZ5
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Gold is winding up like a spring and I think we might see a breakout really soon. I'll run with the current buy order again tomorrow, but with this channel you could set up a trade either way.

*BUY December Gold at 447.5
*Stop 444.7
*Approximate Risk Exposure: $280 per contract
*Profit Target: 469.3
*Approximate Profit Potential: $2180 per contract
*RRR: 7 1/2:1
*Degree of Risk: HIGH
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September Silver SIU5
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Ooooo baby baby! Our patience was rewarded as silver made a big decline through support today. You'll want to bring exit stops in a bit and maybe cover on the other side of the 685 resistance.

Don't be shy about giving a couple of ticks...silver does like to *fudge* the numbers.
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7: SOFTS
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December Cocoa CCU5
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Got the sell signal in cocoa today, but I have to admit I'm not crazy about holding this market over the weekend. I think I'll just watch tomorrow. If prices do fall off the 1375 line should catch them.
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September Coffee KCU5
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Got filled short in a end of day decline in coffee. Unfortunately we don't have a lot of room to play with the stops and we'll probably have to leave them alone for one more session.
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December Cotton CTZ5
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Not the day I was hoping for from Cotton as prices stalled out. I'll bring exit stops in above today's high, or the other side of 4900 for tomorrow. If we see prices bounce here then it's probably a good time to leave.
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September OJ OJU5
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Just watching OJ for the moment. Nothing too interesting however.
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October Sugar SBV5
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Sugar's still all over the place. Today prices fell off sharply, but unfortunately it was a day too late.
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