Erich's Update for Thursday, September 1, 2005

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Market Update for Thursday, September 1, 2005
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Tom is out of town and won't be able to do the daily updates for Tom's Trades until his return this weekend.
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1: CURRENCIES
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September Australian Dollar ADU5
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Big reversal off the AD today. This market is still technically in a downtrend so I'll have to forego a buy trade for the moment.
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September British Pound BPU5
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Huge rally in the Pound today as well. I hate days like today because the big rally makes it tough to know what's going to happen tomorrow, BUT the tendency is for a market to second guess itself a bit after a big day, so I think I'll wait.
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September Canadian Dollar CDU5
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The CD found resistance at 8450 today. We've made a BIG rounded bottom formation now and should expect a reaction to the 8450 resistance. Like the other currencies I don't want them to run away from us, but I sure don't want to get caught in a rangeless day either.
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December EuroFX ECZ5
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Time to put up or shut up as the Euro bounced off the trendline today. I was a beautiful bounce off support as rates rallied consistently higher all day. There is a danger that we will see a small reversal tomorrow, but I'll try to keep the entry far enough away to avoid a bad fill.

*BUY December EuroFX at 124.43
*Stop 123.97
*Approximate Risk Exposure: $575 per contract
*Profit Target: 127.17
*Approximate Profit Potential: $3425 per contract
*RRR: 5 1/2:1
*Degree of Risk: HIGH
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September Japanese Yen JYU5
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Scary day in the Yen as rates made a big move to the upside as well. I would expect higher rates to continue but I'm not sure about entering from current levels.
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September Mexican Peso MPU5
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Who said the Peso would find resistance at 92.800? I love it when the market is cooperative like that! ;-)

Seriously though, I would have hoped that the big move to the upside today would have given us a corresponding move in RSI, but it did not. As such we might see rates continue higher still before we get a testpoint.
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December Swiss Franc SFZ5
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Got $300 bucks you don't need? Then you might consider buying the Swiss Franc above the resistance on today's high. While I avoided most of the currencies because of today's big rally, the Euro and Swiss Franc look to have the most *solid* setups. Of course that doesn't mean that they will work out, only that they're looking pretty good.

*BUY December Swiss Franc at 8067
*Stop 8043
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8197
*Approximate Profit Potential: $1625 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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December US Dollar Index DXZ5
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The USD was the culprit behind the rallies today as it took a big dip to the downside. Rates settled just shy of the 8700 support line which we will use to sell from tomorrow. Like the other markets, I'm a little leery of selling again after such a big day. Just so you know.

*SELL December US Dollar Index at 8699
*Stop 8737
*Approximate Risk Exposure: $380 per contract
*Profit Target: 8561
*Approximate Profit Potential: $1380 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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2: ENERGIES
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October Unleaded Gas HUV5
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Yet another scary day in Gas. Crude's faltering a bit, it will be interesting to see if Gas follows its lead.
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October Heating Oil HOV5
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Definite divergence in RSI as Heating Oil looked slightly more bearish today. I'd love to sell it short, but these ranges are just way to crazy.
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October Crude Oil CLV5
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Slight setback in Crude prices today. I'd like to see a dip all the way to 6600 before I might consider another buy, but right now I'm just watching.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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I don't remember the last time I saw the Eurodollar rally like this two day's in a row. The upside is limited though and I'll continue to look for another chance to sell.
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December mini-DOW YMZ5
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The DOW is definitely looking stronger again...but for how long. We've got resistance at 10570 which might crimp our upside.
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December mini-NAS NQZ5
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Given today's continued rally in the NAS I would probably look to buy the market above today's high. The only problem with the trade is the resistance at 1613 which will cause some problems, but hopefully we can get the trade to breakeven before that.

*BUY December mini-NAS at 1607.5
*Stop 1594.5
*Approximate Risk Exposure: $260 per contract
*Profit Target: 1647.5
*Approximate Profit Potential: $800 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December mini-S&P ESZ5
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I wanted to do the same type of trade in the S&P as we have in the NAS; however here we can incorporate the next resistance level into the trade to delay entry until we trade above it. This is a little more favourable than the NAS set up.

*BUY December mini-S&P at 1236.25
*Stop 1230
*Approximate Risk Exposure: $312 per contract
*Profit Target: 1255
*Approximate Profit Potential: $937 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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4: GRAINS
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December Corn CZ5
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Corn fell through support today finding our short order. There's enough room to move stops to 218's resistance if you choose, but if you can afford the risk you might consider leaving them at 220 for one more day.
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December Oats OZ5
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How disappointing as Oats made a big bounce today, stopping us out of our shorts at breakeven. I certainly thought this market had more room on the downside, but after today I'm not so sure anymore.
Standing aside for tomorrow.
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September Rice RRU5
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Rice is bound and bent it's going to hold the trendline again. Technically we're in a downtrend, but if we see a reasonable session tomorrow I might buy.
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December Soybean Meal SMZ5
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I thought Meal would have gotten closer to all that support at 182 by now, but it hasn't. I thought about placing a sell order below 181, but I think I'll hold off for a bit. RSI is quite oversold and might be due for a reversal.

I'm still looking to sell this market, but finding the *right* time to get in is proving to be a problem.
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December Soybean Oil BOZ5
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Another crazy day in the Bean Oil market as prices recouped yesterday's gains. I might run the same trade as we did a couple of day's ago and sell Bean Oil on a break of yesterday's low. There is a bit of support here in the 2250 area - I hope it doesn't snag us.

*SELL December Bean Oil at 2257
*Stop 2287
*Approximate Risk Exposure: $180 per contract
*Profit Target: 2123
*Approximate Profit Potential: $804 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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November Soybean SX5
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Okay we got the testpoint bounce in RSI today, which gives us the green light to sell beans tomorrow. I'm a little more comfortable selling beans than meal because we're already at the strong support line. I'll place my entry a little further so that we don't get caught by a wandering market.

Even so it is a risky trade.

*SELL November Soybeans at 592 3/4
*Stop 598 1/4
*Approximate Risk Exposure: $275 per contract
*Profit Target: 548 1/4
*Approximate Profit Potential: $225 per contract
*RRR: 8:1
*Degree of Risk: Moderate to HIGH
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September Wheat WU5
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Wheat made a nice decline just past the 318 support line today. I think we're likely to see a bounce tomorrow which will give us a chance to sell this market from a proven support level.
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5: MEATS
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October Feeder Cattle FCV5
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Feeder's are still searching for support. Today the market held yesterday's low, but I still think we'll see a bit more of a pullback.
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October Live Cattle LCV5
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I thought Cattle would be more aggressive to the downside during this pullback phase, but today's session was confined by yesterday's range. I'm tempted to put a buy order above the high, but I'll wait for confirmation before comitting.
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October Lean Hogs LHV5
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Hogs are still testing the resistance at the neckline of the rounded top formation. Here too I'm expecting more of a pullback before buying again.
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6: METALS
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September Copper HGU5
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The copper see-saw continues today. Nothing interesting tomorrow, but I think a big break is coming (lower).
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December Gold GCZ5
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Gold made a poke at our stops today, but didn't find them. If you haven't brought them to breakeven yet, you'd better do so, because if the USD falls again tomorrow then that will ignite gold higher.

First profit traget is support at 425.7
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September Silver SIU5
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Silver rallied off support today and is very close to an RSI testpoint. The downtrend is strong so I'll place an order to sell below today's low with stops above the 672 resistance.

*SELL September Silver at 667.5
*Stop 673.5
*Approximate Risk Exposure: $300 per contract
*Profit Target: 640.5
*Approximate Profit Potential: $1350 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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7: SOFTS
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December Cocoa CCZ5
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Cocoa's getting closer to another sell. I'd like to see prices test the 1370 support for an easy entry, otherwise if this hesitation continues, we might look to sell intermediate support.
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December Coffee KCZ5
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Big gap higher in coffee today. This market's a little too squirrelly right now...more than usual I mean.
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December Cotton CTZ5
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I still haven't forgiven cotton for smacking us the other day. It looks as though the market is searching for short term support, but I'm just watching.
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November OJ OJX5
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Got the bounce off of 9300's resistance today with a low closing price making me look to sell OJ tomorrow on a break of this week's support at 9130. I'll actually give the market a little extra room on the entry, to help avoid a bad fill.

*SELL November OJ at 9095
*Stop 9265
*Approximate Risk Exposure: $255 per contract
*Profit Target: 8515
*Approximate Profit Potential: $870 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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Sugar continues to look stronger, and I do expect the market to rally; however I think I'll wait for a test of the contract highs before looking to buy.