Erich's Update for Tuesday, August 23, 2005
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Market Update for Tuesday, August 23, 2005
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Erich http://www.supportandresistance.com
"We should be taught not to wait for inspiration to start a thing. Action always generates inspiration. Inspiration seldom generates action." -Frank Tibolt
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1: CURRENCIES
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September Australian Dollar ADU5
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Queer session today as prices rallied but were bearish overall. I wouldn't mind seeing the market continue higher, maybe to resistance at 7580 before backing off. We might start trailing a sell order tomorrow.
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September British Pound BPU5
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The Pound rallied today and hooked early in RSI. I would like to see rates fall off to test RSI tomorrow otherwise we'll look to buy at 181.00.
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September Canadian Dollar CDU5
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The CD rallied nicely today, leaving me kicking myself a bit for not looking to buy. We might get another chance off resistance at 8350.
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September EuroFX ECU5
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Smallish bounce in the EC this morning which might lead to higher rates again tomorrow. I'll hold off for the time being as we have more favourable setups in the USD and Swiss Franc.
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September Japanese Yen JYU5
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The Yen bounced higher off the trendine today. I might look at buying tomorrow above today's resistance. This is the same plan as what we did a few weeks ago.
*BUY September Japanese Yen at 9177
*Stop 9153
*Approximate Risk Exposure: $300 per contract
*Profit Target: 277
*Approximate Profit Potential: $1250 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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September Mexican Peso MPU5
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The Peso "reacted" to last week's big decline. Exit stops should be either above Friday's high, or on the other side of the 93.000 resistance line. Hoping to see the market resume the downtrend very soon. First profit target is 89.775.
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September Swiss Franc SFU5
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The Swissy followed the Euro higher today confirming our support. It's not the ideal setup for buying but I might look at a buy above 7930's resistance. We can cover the trade below the 7900 support line for a "reasonable" amount of risk.
*BUY September Swiss Franc at 7933
*Stop 7897
*Approximate Risk Exposure: $450 per contract
*Profit Target: 8107
*Approximate Profit Potential: $2175 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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September US Dollar Index DXU5
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The US Dollar confirmed resistance today as rates made a serious move to the downside. Looks like we might have a resumption of the downtrend tomorrow.
I would consider selling below today's low and the support at 8800. The ideal stop placement is at 8737; however this is going to leave $500 at risk. Altenatively you could use intermediate resistance at 8823 to cover the trade.
*SELL September US Dollar Index at 8787
*Stop 8823
*Approximate Risk Exposure: $360 per contract
*Profit Target: 8619
*Approximate Profit Potential: $1680 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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2: ENERGIES
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October Unleaded Gas HUV5
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Whew! That was close!
Unleaded made a run at our entry today, but came up a few ticks short, so our buy order was not engaged before the market reversed. I'm still liking the long position and will run the same trade tomorrow.
*BUY October Unleaded Gas at 183.15
*Stop 181.90
*Approximate Risk Exposure: $525 per contract
*Profit Target: 192.60
*Approximate Profit Potential: $3970 per contract
*RRR: 7 1/2:1
*Degree of Risk: Moderate to HIGH
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October Heating Oil HOV5
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While it doesn't look like much of a day, today's range was well over $500 from high to low. It's always extremely tempting to bracket a small day like today and trade the breakout side tomorrow.
In case no one told you, this is a very risk proposition.
*BUY October Heating Oil at 185.30
*Stop 184.55
*Approximate Risk Exposure: $315 per contract
*Profit Target: 193.35
*Approximate Profit Potential: $3380 per contract
*RRR: 10 1/2:1
*Degree of Risk: HIGH
OR
*SELL October Heating Oil at 183.80
*Stop 184.55
*Approximate Risk Exposure: $315 per contract
*Profit Target: 178.10
*Approximate Profit Potential: $2390 per contract
*RRR: 7 1/2:1
*Degree of Risk: HIGH
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October Crude Oil CLV5
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We weren't quite as fortunate with Crude oil today as the market rallied through resistance only to fall off and whipsaw us out of the trade. I hate it when that happens! Nothing new here tomorrow.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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The ED continues to range between support and resistance. I'll continue to look to sell for the short term on a break of support.
*SELL June (06) Eurodollar at 95.54
*Stop 95.625
*Approximate Risk Exposure: $212 per contract
*Profit Target: 95.245
*Approximate Profit Potential: $737 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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September mini-DOW YMU5
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Still nothing interesting in the DOW for now.
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September mini-NAS NQU5
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Sold the Mini-NAS late in the day as the index pushed through support. Can't do much with the stops right now and we'll have to hope for a big decline tomorrow otherwise the exit order is bound to get tagged.
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September mini-S&P esU5
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Indecisive day for the S&P. I still think we'll see it fall off, but I'll run with the NAS for now.
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4: GRAINS
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December Corn CZ5
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Corn rallied slightly today, but not enough to make me change my mind about our sell order. Sticking with the sell for tomorrow as well, but if we get another bullish session I'll adjust my shorting figures.
*SELL December Corn at 223 1/4
*Stop 219 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 205 1/4
*Approximate Profit Potential: $725 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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December Oats OZ5
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Oats pulled a little higher today which is really tempting me to try and sell the 158 support line. I'll think I'll leave well enough alone and run with the original order tomorrow, but as with corn, if we see another higher session, I'll adjust my figures.
*SELL December Oats at 154 3/4
*Stop 158 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 142 3/4
*Approximate Profit Potential: $600 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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September Rice RRU5
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Got a bounce off the trendline today, which I have to admit was a little unexpected. I thought with the weakening trend we would see Rice break support, but it's holding for now.
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September Soybean Meal SMU5
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Too bad Soy Meal stopped us out at breakeven today. No matter though as we have another chance to sell the market tomorrow should we see a reversal.
*SELL September Soy Meal at 187.7
*Stop 191.3
*Approximate Risk Exposure: $360 per contract
*Profit Target: 176.3
*Approximate Profit Potential: $1140 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Soybean Oil BOZ5
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Bean Oil rallied slightly, but is still technically bearish so we'll still look to sell. We could see another rally as prices attempt an RSI test.
*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 gapped our exit this morning taking us out of our short position. Here too we can run the same trade as last week in case we see a reversal; however it's looking like an RSI test is likely.
*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: HIGH
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September Wheat WU5
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Wheat's the only grain market to trade lower today as prices bounced off the RSI tespoint. This reaction demands we sell the market tomorrow below today's support.
*SELL September Wheat at 319 3/4
*Stop 324 1/4
*Approximate Risk Exposure: $225 per contract
*Profit Target: 300 3/4
*Approximate Profit Potential: $950 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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5: MEATS
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October Feeder Cattle FCV5
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Still nothing in this market.
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October Live Cattle LCV5
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I'm thinking we will be selling cattle very soon...just not tomorrow.
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October Lean Hogs LHV5
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Hogs are looking like they are due for a pullback, but I'm standing aside.
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6: METALS
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September Copper HGU5
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We have yet another bounce in copper to start off the week. RSI is also holding the trendline, so I might look at buying if we can exceed today's high. There's a little more money at risk here than I normally like, but overall if's a good looking trade.
*BUY September Copper 169.10
*Stop 167.35
*Approximate Risk Exposure: $437 per contract
*Profit Target: 174.90
*Approximate Profit Potential: $1450 per contract
*RRR: 3:1
*Degree of Risk: HIGH (because of the dollar amount)
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December Gold GCZ5
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Gold seems to be finding support on renewed weakness in the US Dollar. If we see a higher session tomorrow we'll look at buying again.
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September Silver SIU5
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Silver ran away from our sell order today. Too bad because it was a sound trade. We'll pull the trade for tomorrow and just watch.
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7: SOFTS
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September Cocoa CCU5
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Cocoa's getting very close to a testpoint and as such we might expect resistance soon, maybe even off the 1380 - 1390 resistance line. We'll watch tomorrow, but will probably put together a trade for Wednesday.
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September Coffee KCU5
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Okay coffee, I can't ignore you any longer. The market continues to test support and has given us fairly tight numbers to sell from should prices continue lower.
*SELL September Coffee at 9380
*Stop 9515
*Approximate Risk Exposure: $500 per contract
*Profit Target: 8635
*Approximate Profit Potential: $2800 per contract
*RRR: 5 1/2:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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I might end up kicking myself over this, but I'll give cotton one more day to find the RSI trendline before selling. This could shape up to be a very nice trade.
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September OJ OJU5
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Nothing in OJ right now. Since the market slipped past us last week we're on hold.
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October Sugar SBV5
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Got filled short in sugar today as prices finally broke support. If you can afford the risk you can leave stops where they are, otherwise consider bringing them above 975 for tomorrow.
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