Erich's Update for Tuesday, September 13, 2005
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Market Update for Tuesday, September 13, 2005
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"Anyone who stops learning is old, whether at twenty or eighty." - Henry Ford
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1: CURRENCIES
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December Australian Dollar ADZ5
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The Aussie confirmed last week's resistance at 7725 by trading lower today. Look for rates to likely continue lower for the next few days until we encounter support at 7600.
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December British Pound BPZ5
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Big gap lower this morning sent the Pound lower in a hurry. I thought the market was looking more bullish than this, but I guess not. Look for support at 181 tomorrow, otherwise the bears take over the market.
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December Canadian Dollar CDZ5
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The Canadian Dollar also fell off today, but not quite as dramatically as the Pound. Here too I would expect rates to continue lower tomorrow as the market looks for support. Likely support will occur at 8400, from where we might look for another buy.
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December EuroFX ECZ5
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Big move lower in the Euro this morning as well. Rates are now testing support on the trendline at 123.10. If we get a bounce here tomorrow then I'm looking to buy again. A break will get me serious about selling.
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December Japanese Yen JYZ5
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The Yen bounced a little early of our RSI test as rates traded lower today. That's not a problem however, as we can look to sell the Yen below the support at 9155 near today's low. I would have liked to enter on the other side of 9150, but it would leave too much at risk; therefore I'm entering on a break of 9155.
*SELL December Japanese Yen at 9153
*Stop 9177
*Approximate Risk Exposure: $300 per contract
*Profit Target: 9077
*Approximate Profit Potential: $950 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Mexican Peso MPZ5
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The Peso held the support and resistance channel again today. I might run the trade as is tomorrow,
*BUY December Mexican Peso at 92.375
*Stop 91.775
*Approximate Risk Exposure: $300 per contract
*Profit Target: 94.350
*Approximate Profit Potential: $987 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
OR
*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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A big gap lower in the Swiss Franc this morning as this market shot lower. The gap would have voided any trade we had for this market, but we were looking to buy anyway. Nothing new here tomorrow.
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December US Dollar Index DXZ5
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And the reason all the currencies headed lower today is because of the strong session in the USD. It looks like we haven't seen the end of it yet either, but I would like to see a slight hesitation so that we can look to buy in...but that might be asking too much.
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2: ENERGIES
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October Unleaded Gas HUV5
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Gas prices continue to slide today. This is another market that looks like it might just be beginning a reversal phase; however we'll need a slightly better setup before we try to get onboard.
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October Heating Oil HOV5
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Heating Oil was a bit of a surprise today as the market continues to make a nice, progressive pullback. This is another market that has gotten away from us so we need to be on the lookout for the next selling opportunity. After declining for six straight sessions, I would hope we don't have to wait too much longer.
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October Crude Oil CLV5
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Crude is officially bearish now that prices have broken the price and RSI trendlines. Like the other energy markets we need to be cautious and wait for a good sell signal. We don't want to get anxious only to get whipsawed.
Good news is that this should eventually translate into lower fuel prices as well.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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The ED continued lower today testing support at 9572. We've broken the RSI testpoint, so lower rates look likely. As you know that's my preference for this market anyway, and like the other markets we need to wait for our next chance to sell.
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December mini-DOW YMZ5
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The Dow gave us our first hint of a pullback today. If the market continues to fall off tomorrow then we'll look at trailing a buy order for the eventual revesal.
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December mini-NAS NQZ5
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The NAS was the odd man out today as this market traded higher from last week. Here too I would think that resistance at 1633 could cause some problems tomorrow. Like the Dow we will treat any revesal as a temporary pullback and continue to look to buy.
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December mini-S&P ESZ5
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The S&P's reversal today was the most convincing of the three indices. As with the others I will continue to look to buy, but would prefer to see a lower session again tomorrow.
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4: GRAINS
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December Corn CZ5
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A big opening gap voided our sell order today. It wasn't a stellar session by any means, but I'm gettting a little tired of getting gapped on the open. Might be for the best though as the closing price looks a little bullish.
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December Oats OZ5
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Big *fade* day in oats as prices rallied right from the open. This marke also closed near the high which would make me believe that it will continue higher tomorrow. Nothing new here.
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November Rice RRX5
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Another good day for the Rice bears as prices continued lower to support at 650. We now have a small rounded top formation and we all know what that means, right? A bounce is likely tomorrow.
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December Soybean Meal SMZ5
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Soy Meal continued lower today finding our sell order in the process. If you took today's trade then you can't do too much with your exit stops just yet - although you could move them above the high if you *had* to do something.
If you sold Meal last week you can safely bring stops to breakeven now.
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December Soybean Oil BOZ5
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Bean Oil headed lower today until it ran into the strong support at the 2210 line. While I would like to think prices will slip through here tomorrow it does look as though a bounce is likely. Therefore you should consider bringing in your exit stops, either above today's high if you're looking to protect maximum profits, or above 2260 if you're trying to ride the trade as far as possible.
First profit target is 2141.
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November Soybean SX5
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A bullish/bear session in the big bean market as prices started low only to trade higher for the rest of the day. If you're short this market from last week, bring exit stops to breakeven for tomorrow.
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December Wheat WZ5
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Wheat gapped our sell order this morning, but the extremely strong session did find our buy order before the day was done. I was hoping for a little more momentum on our fill, but it came late in the day and now our trade is MUCH tighter than I had planned! We're going to need a bit of luck to ride this one out tomorrow.
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5: MEATS
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October Feeder Cattle FCV5
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Feeder's rallied higher (again) but today's session smacks of lower prices tomorrow as evidenced by the low closing price. Will we finally get another chance at this market?
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October Live Cattle LCV5
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Very strong day in Cattle has me kicking myself for getting sidetracked by what was happening in Feeders. Cattle has had six strong days in a row now, so it's most likely that we will see a hesitation tomorrow.
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October Lean Hogs LHV5
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Hogs made a run at our stops today but didn't find them. By the end of the day the market was trading higher again so you could bring stops under 6470's support, or leave them where they are for one more day.
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6: METALS
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December Copper HGZ5
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Copper bounced as per request, so now the market's making me put my money where my mouth is. Okay, copper, have it your way: I'll buy the market above the secondary resistance and use support at 164 to cover the trade. Profit target is a projection of the *other* trendline.
*BUY December Copper at 165.35
*Stop 163.95
*Approximate Risk Exposure: $350 per contract
*Profit Target: 174.90
*Approximate Profit Potential: $2387 per contract
*RRR: 6 1/2:1
*Degree of Risk: HIGH
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December Gold GCZ5
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So-so day in Gold. Prices rallied in spite of the fact that the US Dollar headed higher as well. I think the iffy closing price adds to tomorrow's confusion.
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December Silver SIZ5
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Silver continued to batter away at support at 700 today. RSI is sloping lower and the trend is down so I'll consider selling the market on a break below here. I'll actually give the market a little room before selling so that I can use the 700 line to cover the trade as well.
*SELL December Silver at 698.5
*Stop 702.5
*Approximate Risk Exposure: $200 per contract
*Profit Target: 672.5
*Approximate Profit Potential: $1300 contract
*RRR: 6 1/2:1
*Degree of Risk: Moderate to HIGH
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7: SOFTS
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December Cocoa CCZ5
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Cocoa fell off sharply today. I haven't had a chance to research the market to find the reason behind the decline, but I do know that support at 1450 - 1460 is critical to hold the market up. If we get a reaction here I'll be looking to buy the market on Wednesday.
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December Coffee KCZ5
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I had a feeling I was squeezing coffee a little too hard, and today the market slipped past us like a wet bar of soap. With a little luck we'll get another hesitation in the decline in a day or two to allow for another sell.
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December Cotton CTZ5
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I'm not quite sure what to make of today's session, other than cotton is sitting on strong support at 5050. A bounce here will confirm the bulls have things under control, otherwise we could see prices slip lower still.
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November OJ OJX5
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At least the OJ trade went according to plan today as prices broke the resistance at 9325 to find our order. It was a good session overall as today's gains allow us to bring exit stops to breakeven for tomorrow. First profit target is resisance at 9780.
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October Sugar SBV5
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What did I tell you? I cover the short side and the market breaks through the upside. This is the second time I've let my *opinion* get in the way of my trading. See, it can happen to the best of us, even after year's of doing this. Work hard at letting the charts tell you what to do and keep your opinion to yourself.
I just hope the market doesn't run too far without us..
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