Erich's Update for Friday, September 23, 2005
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Market Update for Friday, September 23, 2005
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"Permanence, perseverance and persistence in spite of all obstacles discouragements, and impossibilities: It is this, that in all things distringuishese the strong soul from the weak." - Thomas Carlyle
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1: CURRENCIES
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December Australian Dollar ADZ5
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Okay, now we're getting somewhere. The AD took a serious dip today and it looks as though rates are finally going hunting for support. Keep and eye on the 7550 area and a coinciding bounce off of RSI.
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December British Pound BPZ5
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The Pound made a solid move to the downside today finding our sell order in the process. The market continued lower until struggling with support at 173-ish. If you can afford the risk you might leave stops where they are. If you're anxious to move them bring them above the 179.50 resistance.
With a little luck we'll get them to breakeven tomorrow.
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December Canadian Dollar CDZ5
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We've been lucky holding off on the CD for the last couple of days. I'll continue to push my luck and wait for an RSI test, which might come early next week.
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December EuroFX ECZ5
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The Euro had a bullish bearish session today - trading higher, but overall it was a bearish day. I do think the Euro is poised to head lower, but I'm not comfortable selling until we can bring the 121 support line into the equation.
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December Japanese Yen JYZ5
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Our patience might finally be rewarded as the Yen is giving us a tradeable formation today. Notice the confirmation of resistance as rates traded lower? Do you also see the support at 9030 and 9015? I'll look to sell the market short below one and cover above the other. I'll give the market a little extra room on the exit side, just because I don't want to squeeze too tight.
*SELL December Japanese Yen at 9013
*Stop 9051
*Approximate Risk Exposure: $475 per contract
*Profit Target: 8857
*Approximate Profit Potential: $1950 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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December Mexican Peso MPZ5
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The Peso struggled lower today and finally found our sell order. It was a pretty good session overall, but I hate *just* getting filled. We can't do much with the stops right now, so hold them where they are.
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December Swiss Franc SFZ5
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The Swiss Franc also confirmed resistance today and now finds itself against the double hit on 7865's support. I will look at selling the market short tomorrow below secondary support and use the 7865 line to cover the trade. First profit target are the contract lows at 7757.
*SELL December Swiss Franc at 7847
*Stop 7877
*Approximate Risk Exposure: $375 per contract
*Profit Target: 7757
*Approximate Profit Potential: $1125 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December US Dollar Index DXZ5
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Wow, the USD is *still* fighting the 8850 - 8860 resistance. RSI is showing this market quite overbought at the moment, but I'll run our buy order again tomorrow. Obviously we've got the line in the sand right.
*BUY December US Dollar Index 8867
*Stop 8837
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8997
*Approximate Profit Potential: $1300 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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2: ENERGIES
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October Unleaded Gas HUV5
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Hurricane Rita continues to whip the Gas market into a buying frenzy. We could have bought the breakout above yesterday's high, but given these ranges we would never be able to hold on to the trade until the next day.
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October Heating Oil HOV5
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Heating Oil looks much more like a topping formation today. If resistance holds and prices trade lower tomorrow, everyone and their brother will be looking to sell this market.
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October Crude Oil CLV5
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Crude is looking even more bearish than Heating Oil and we should expect the same. I'm not too concerned about the market running away as there is hefty support at 6630 which will be a major barrier for the bears.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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What's this? Is the Eurodollar seriously considering a rally? Rates are holding the trendline pretty close, but I don't think I'm quite ready to buy - yet.
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December mini-DOW YMZ5
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The Dow would have tagged you out if you brought stops down to the 10460 resistance for today. It's not all bad though as you would walk with $185 in profit per contract. If you left stops at breakeven then you're still in the game, but you'll have to hold the stops there for tomorrow.
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December mini-NAS NQZ5
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A similar story in the NAS today with the exception that breakeven wasn't good enough to keep you in the market. If you got stopped at 1580 you at least made enough to cover your commissions.
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December mini-S&P ESZ5
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Gee, a bounce off 1210, imagine that. ;-)
The S&P was probably the driving force behind today's bounce in the other two indices. I would welcome another higher session tomorrow which would make me very happy to short the market next week.
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4: GRAINS
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December Corn CZ5
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Corn finally broke out of the sideways channel, but to the upside. I would have preferred a trend breakout short, but I realize these are extremely low prices for this market. We can't do too much with our stops yet, but hopefully we can get them to breakeven tomorrow. That is definitely a priority.
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December Oats OZ5
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A pretty lame session in oats today, but it did trade high enough to find our buy order. While it is extremely tempting to bring stops below today's low I would probably leave them where they are for one more day. I know a break of 158 means we're on the wrong side of the market, but a break of 160? I'm not so sure about that.
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November Rice RRX5
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Rice continued it's hard rally today. Now I'm really choked that I didn't buy when I had the chance. We're not alone however. Watch for prices to find resistance tomorrow and head lower for at least a couple of days before rallying again.
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December Soybean Meal SMZ5
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Soy Meal is still confined within the last couple of day's range. You could look to sell support tomorrow, but I think I'll give it until Monday before committing. It's a gamble, of course, but I think a lot of traders might be hesitant about holding a position over the weekend.
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December Soybean Oil BOZ5
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Bean Oil slowed today as prices traded closer to the 2390 - 2400 resistance. I wouldn't mind seeing a stall again tomorrow as that would give us a chance to buy into this market with greater predictability.
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November Soybean SX5
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Beans stalled on resistance at 585 today. I'll run our short below this week's support again tomorrow, but I doubt we'll get a fill.
*SELL November Soybeans at 566 3/4
*Stop 572 1/4
*Approximate Risk Exposure: $275 per contract
*Profit Target: 550 1/4
*Approximate Profit Potential: $825 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Wheat WZ5
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Don't tell me wheat has finally committed to something? Prices made a very clean break of the 329 and 332 resistance zones. I'm not going to jump in on a Friday, but we'll definitely be giving this one a good look over the weekend.
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5: MEATS
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October Feeder Cattle FCV5
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Close but no cigar as Feeder's made a big run up today, but not high enough to find our buy order. Now we're faced with a serious problem, as it is not above Feeders to simply poke above resistance and try and whipsaw us tomorrow.
I might adjust the figures a bit to reflect today's session. Of course you could still run the numbers from the other day if you prefer.
*BUY October Feeder Cattle at 114.325
*Stop 113.575
*Approximate Risk Exposure: $375 per contract
*Profit Target: 116.925
*Approximate Profit Potential: $1300 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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October Live Cattle LCV5
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Cattle followed Feeders higher today and you could look at buying a break above this week's high. It's a tough trade however as the profit target needs to be the long term resistance at 8940 instead of the daily contract highs.
*BUY October Live Cattle at 8672
*Stop 8617
*Approximate Risk Exposure: $220 per contract
*Profit Target: 8927
*Approximate Profit Potential: $1020 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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December Lean Hogs LHZ5
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I still like Hogs short and I'm still watching the 6130 support for a chance to sell. Patience.
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6: METALS
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December Copper HGZ5
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Copper looks like it's going to head south tomorrow and I should sell but we're basing the trade on some pretty flimsy resistance numbers and it's countertrend to boot. Can you say *RISKY*?
*SELL December Copper at 469.95
*Stop 171.05
*Approximate Risk Exposure: $275 per contract
*Profit Target: 165.80
*Approximate Profit Potential: $1037 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December Gold GCZ5
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The Gold market cleared it's throat today as traders went stop hunting. Another couple of days like today and I think it will be safe to get serious about gold again.
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December Silver SIZ5
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Mirror image of what happened in gold today. Way too hot to handle right now.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa continued lower today allowing us to bring stops in above the 1370 resistance for tomorrow. Don't push too hard as there might be a slight hiccup along the way.
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December Coffee KCZ5
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Coffee's daily gaps are downright scary. I'll run our short trade again tomorrow, but I don't think we're going to get filled.
*SELL December Coffee at 8590
*Stop 8720
*Approximate Risk Exposure: $487 per contract
*Profit Target: 8040
*Approximate Profit Potential: $2060 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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Cotton continues to chop today, although the market definitely didn't like the lower prices...either that or it's a last ditch effort by the bulls to run prices up. Just watching tomorrow.
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November OJ OJX5
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OJ's continued higher today, but not high enough to find our buy order. I'll run the trade again tomorrow, but I'll adjust the figures to allow for today's action.
*BUY November OJ at 9855
*Stop 9765
*Approximate Risk Exposure: $135 per contract
*Profit Target: 10250
*Approximate Profit Potential: $590 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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It didn't take sugar long to find support, did it? I still like the market short and the resistance at 1070 should hold it down, but I'll pass tomorrow.
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