Erich's Update for Thursday, September 8, 2005
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Market Update for Thursday, September 8, 2005
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Hot off the commodity presses to you!
Erich http://www.supportandresistance.com
"Anyone who has never made a mistake has never done anything new." ~Albert Einstein
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1: CURRENCIES
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December Australian Dollar ADZ5
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The AD is beginning the anticipated pullback, maybe. Today's session looked bearish on the surface, but RSI headed higher. Nothing new tomorrow.
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December British Pound BPZ5
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The Pound is also beginning to *normalize* as today's session looked much more bearish. We've also got an RSI hook so lower rates look likely for tomorrow. Still looking for support around 181.
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December Canadian Dollar CDZ5
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Crazy day in the CD as rates made a big range but didn't go anywhere. I'd like to buy the market long above the resistance, but I'm just not comfortable with what the bars have been doing.
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December EuroFX ECZ5
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The Euro is looking a little quirky as well, although rates did decline as anticipated. Watching the 124 line for possible support.
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December Japanese Yen JYZ5
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The Yen definitely looks rangebound as rates fell off slightly today. I was considering selling the market short, and I would have, if RSI was at a test point...but it's not, so I'll hold off tomorrow.
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December Mexican Peso MPZ5
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The Peso's traded lower today confirming yesterday's resistance. We're not quite at an RSI test here either, but I like the support at 91.400 91.500 which we can use to sell the market short.
*SELL December Mexican Peso at 91.375
*Stop 91.775
*Approximate Risk Exposure: $200 per contract
*Profit Target: 89.425
*Approximate Profit Potential: $975 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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December Swiss Franc SFZ5
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The Swissy behaved itself today and found support at 8100. This is the first line of support we were watching for a possible reversal. I'll look to buy the market long if we get a break above the 8150 resistance on the high.
*BUY December Swiss Franc at 8153
*Stop 8133
*Approximate Risk Exposure: $250 per contract
*Profit Target: 8273
*Approximate Profit Potential: $1500 per contract
*RRR: 6:1
*Degree of Risk: Moderate to HIGH
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December US Dollar Index DXZ5
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The USD still looks like it's in the midst of a pullback and will continue higher, possibly to resistance at 8720 before reversing again. Of course if we do get a bearish reaction tomorrow we'll look at selling on Friday.
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2: ENERGIES
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October Unleaded Gas HUV5
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A couple of ticks shy of our 196.25 support target, but an interesting day all the same. I should buy the high, but I might hold out for a confirmation of support. This market has been a little crazy lately.
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October Heating Oil HOV5
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A *textbook* move to support at 194 today - as expected I might add. Today's session was very bearish, so I'll look for support to hold tomorrow before buying. This is the last chance for the bulls to step up to the plate.
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October Crude Oil CLV5
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A beautiful move to the downside in crude today. Did you notice that prices found the 50% retracement, the price trendline and hooked in RSI? This is a big day folks. It looks very good that crude is heading higher tomorrow, the problem is where do you buy in?
For those thrill seekers among you, you could try to buy the low tomorrow off the 6470 support, otherwise look to buy a break above today's high.
*BUY October Crude at 6475 (limit)
*Stop 6435
*Approximate Risk Exposure: $400 per contract
*Profit Target: 7015
*Approximate Profit Potential: $5400 per contract
*RRR: 13 1/2:1 *Degree of Risk: HIGH
OR
*BUY October Crude at 6735
*Stop 6695
*Approximate Risk Exposure: $400 per contract
*Profit Target: 7015
*Approximate Profit Potential: $2800 per contract
*RRR: 7:1
*Degree of Risk: Moderate to HIGH
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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I didn't think I'd ever be looking at buying the ED, but the timing is right. RSI is short of a test point, so I'll put a buy order in above the secondary resistance and cover the trade at yesterday's support.
*BUY June Eurodollar at 9589
*Stop 9583.5
*Approximate Risk Exposure: $137 per contract
*Profit Target: 9509.5
*Approximate Profit Potential: $512 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate
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December mini-DOW YMZ5
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The DOW had a relatively good day after yesterday's strong session. Right now the market is up against strong resistance, so I would expect a bounce tomorrow and maybe another chance to buy.
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December mini-NAS NQZ5
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The NAS also traded higher, but not as strongly as the DOW. Here too we see the market battling resistance with a possible reversal tomorrow.
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December mini-S&P ESZ5
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Ditto for the S&P.
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4: GRAINS
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December Corn CZ5
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Corn remains stuck in a sideways channel, so we'll bracket the support and resistance and look to trade the breakout side. There's a WASDE report due next Monday, so we might see the market continue to channel until then.
*BUY December Corn at 224 1/4
*Stop 220 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 236 3/4
*Approximate Profit Potential: $625 per contract
*RRR: 3:1
*Degree of Risk: Moderate
OR
*SELL December Corn at 214 1/4
*Stop 217 1/4
*Approximate Risk Exposure: $150 per contract
*Profit Target: 204 3/4
*Approximate Profit Potential: $475 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Oats OZ5
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Wild day in Oats as the market opened with a big gap and faded the rest of the session. Probably a good market to avoid right now.
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September Rice RRU5
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Did you notice where Rice opened today? Yep, right off the 692 support we were watching, unfortunately we were looking to buy and prices went lower, but our order was never triggered so there was no loss. With a bit of luck we'll see a hiccup tomorrow so we can look to sell.
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December Soybean Meal SMZ5
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We got the reaction we were looking for today, so I'll look to sell Meal below the 184 support. NOTE that this is a VERY RISKY trade as we have a ton of support still at 182 - 183 to overcome. You might want to wait another day to see if prices hold on the support tomorrow.
*SELL December Bean Meal at 183.7
*Stop 186.3
*Approximate Risk Exposure: $260 per contract
*Profit Target: 171.3
*Approximate Profit Potential: $1240 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
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December Soybean Oil BOZ5
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Bean Oil is still flirting with support at the bottom of the channel. I have to admit I'm not encouraged by the length of time this market is deciding to do something, but I'll continue short for now.
*SELL December Soybean Oil at 2277
*Stop 2307
*Approximate Risk Exposure: $180 per contract
*Profit Target: 2141
*Approximate Profit Potential: $816 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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November Soybean SX5
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Beans showed us a bearish bull session today, but we also got a hook off the 50% level in RSI. This might be telling us that the market is *refreshed* and ready to continue lower.
*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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December Wheat WZ5
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Wheat once again tested support today as well as hooking off the RSI trendline. I'm not convinced that prices are really ready to go lower, but all the pieces are in place so I'll look to sell support. NOTE that this is another trade (like Bean Meal) where we are selling before clearing the support at 315. If you wanted to be *safer* you could wait one more day to see what the market gives us.
*SELL December Wheat at 315 3/4
*Stop 318 3/4
*Approximate Risk Exposure: $150 per contract
*Profit Target: 305
*Approximate Profit Potential: $537 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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5: MEATS
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October Feeder Cattle FCV5
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Feeder's showed us a lower high today, which might be the first sign of lower resistance and the end of the bull run. We're still technically bullish, so I have to avoid the market right now, but we'll see if the rally continues to struggle.
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October Live Cattle LCV5
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Slight hesitation in Cattle today as well. I know I'm getting picky now, but a pullback would be a nice way to buy the market from a better price.
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October Lean Hogs LHV5
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Hogs continue to test support at 6170-ish. After today's session I'm not sure that support will hold and we could see a dip to 6100, from where we would become very aggressive buyers.
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6: METALS
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September Copper HGU5
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Looks like copper's going to look for support tomorrow. The number to keep an eye on is 169.50.
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December Gold GCZ5
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Gold continues to hesitate...but that's okay. I still like the buy scenario and will run it again tomorrow.
*BUY December Gold at 453.1
*Stop 449.7
*Approximate Risk Exposure: $340 per contract
*Profit Target: 469.3
*Approximate Profit Potential: $1620 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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September Silver SIU5
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Silver might get as high as the trendline resistance at 714 - 715 and if it does we could get serious about selling a bounce.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa continues to call my bluff, hovering around support and resistance. I want to buy the market higher, but the overbought situation is making me a little gunshy. I would dearly love to see prices *normalize* a bit over the next couple of days. Maybe I'll wait.
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December Coffee KCZ5
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So much for all those coffee rumours, eh? It only goes to show you that EVERYTHING is in the numbers. Repeat after me, *trust the numbers, trust the numbers*.
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December Cotton CTZ5
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No doubt this is a hurricane Katrina reaction still, and we'll keep looking for a chance to buy, but this ain't it.
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November OJ OJX5
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OJ's getting closer to our sell order, but here too I'm not impressed by the lack of momentum. I'll run the trade again tomorrow, but it had better smarten up!
*SELL November OJ at 9095
*Stop 9265
*Approximate Risk Exposure: $225 per contract
*Profit Target: 8515
*Approximate Profit Potential: $870 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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Yesireee, a reversal in sugar is looking more likely today. We're technically bullish, so I'll wait for a reaction before getting more serious.
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