Erich's Update for Wednesday, September 21, 2005

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Market Update for Wednesday, September 21, 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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The Aussie see-saw continued today. Unfortunately there isn't anything tradeable here at the moment. Maybe we'll have a go when the market gets to 7700.
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December British Pound BPZ5
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Interesting, the Pound bounced off the RSI trendline (slightly) but traded lower overall. I'll run the same numbers tomorrow.

*BUY December British Pound at 180.47
*Stop 179.77
*Approximate Risk Exposure: $437 per contract
*Profit Target: 183.97
*Approximate Profit Potential: $2187 per contract
*RRR: 5:1
*Degree of Risk: HIGH

OR

*SEE December British Pound at 179.27
*Stop 180.03
*Approximate Risk Exposure: $475 per contract
*Profit Target: 176.53
*Approximate Profit Potential: $1712 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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December Canadian Dollar CDZ5
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The CD held up on resistance at 8600 today. If I were smart I'd look to buy a break above resistance tomorrow, but I'll see if we can't get an RSI test out of the trade.
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December EuroFX ECZ5
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The Euro is still in no man's land. I'm thinking that rates will continue lower, but there's nothing to trade off of here.
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December Japanese Yen JYZ5
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The Yen continued lower today through the 9050 support line. In hindsight this was a good enough support area to take a trade off of; however as choppy as the Yen has been I was a little gun-shy.
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December Mexican Peso MPZ5
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What a small day in the Peso today. It is certainly tempting to tighten our trade to reflect today's action, but I'll stick with the original numbers.

*SELL December Mexican Peso at 90.475
*Stop 91.025
*Approximate Risk Exposure: $275 per contract
*Profit Target: 88.425
*Approximate Profit Potential: $1025 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December Swiss Franc SFZ5
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The Swiss Franc is also in flounder-city and I'd dearly like to short it again, but the timing isn't right. With a little luck we'll get an RSI test to help us with our timing.
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December US Dollar Index DXZ5
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The USD is still under the 8850 resistance range. I'll look to buy the market on a break above 8850 and cover the trade on the other side of the resistance level. Next stop: the contract highs.

*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: Moderate to HIGH
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2: ENERGIES
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October Unleaded Gas HUV5
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Yeesch, what a day in Gas. This market is just too volatile right now to try and trade. If you do decide to give it a go, be grateful for anything you can pull out of this market.
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October Heating Oil HOV5
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Heating Oil followed Gas around today, mirroring it's bearish session. HO is giving us a slightly better set up as we at least have some support on the lows, and a break through here could be a sell, but the ranges are huge and very difficult to catch. I think I'll just wait until Rita blows through.
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October Crude Oil CLV5
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Ditto for Crude. I'll be more interested once we get back to 6325's support.
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3: FINANCIALS/INDICES
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June (06) Eurodollar EDM6
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Guess I should have followed my gut and sold the ED today as we got a nice break through support. Now that we're officially bearish again we can look for the next selling opportunity...and with any luck it might show up tomorrow.
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December mini-DOW YMZ5
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The Dow fell through support today bringing us back into bear territory. RSI has also hooked and looks poised to head lower. The trend remains choppy, but I might look to sell the market below the 10500 support anyway.

*SELL December mini-DOW at 10497
*Stop 10537
*Approximate Risk Exposure: $200 per contract
*Profit Target: 10343
*Approximate Profit Potential: $770 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
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December mini-NAS NQZ5
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Unlike the S&P and DOW, the NAS is actually at trendline support today, this means we can either expect a break or bounce tomorrow. We've got decent support nearby at 1584 which I'll use to sell short, and cover above 1590 should the market reverse.

*SELL December mini-NAS at 1582.5
*Stop 1592.5
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1535.5
*Approximate Profit Potential: $940 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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December mini-S&P ESZ5
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The S&P should also be a sell tomorrow; however the support at 1221 is giving me some pause...and it might do the same to the market too.
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4: GRAINS
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December Corn CZ5
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The Corn channel continues...so I'll continue to run the same trade.

*SELL December Corn at 204 3/4
*Stop 207 1/4
*Approximate Risk Exposure: $125 per contract
*Profit Target: 195 1/4
*Approximate Profit Potential: $475 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate

OR

*BUY December Corn at 209 1/4
*Stop 205 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 220 3/4
*Approximate Profit Potential: $575 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Oats OZ5
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Still a very disorganized market. Nothing new here tomorrow.
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November Rice RRX5
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Rice gapped our entry this morning thereby voiding our trade...and that was probably a good thing today as prices faded the open the rest of the session. RSI is also hooking higher, so we might see higher prices here afterall.

Technically we're still in short-country, so I'll hold off buying at the moment.
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December Soybean Meal SMZ5
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Soy Meal continued lower today, so you can bring your stops in above today's high. Next stop is support at 171.
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December Soybean Oil BOZ5
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"Nuts-o" is the word I would use to describe the Bean Oil market. After yesterday's rally it looked like it was going to the moon, but not today.
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November Soybean SX5
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Beans might be giving us another chance to sell tomorrow on a break of this week's support. I'll give the market a couple of extra ticks just to be sure though.

*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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Wheat still doesn't look tradeable at the moment. This is normally one of my favourite markets, but there's nothing we can do but wait.
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5: MEATS
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October Feeder Cattle FCV5
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Feeder's are still teasing us today. I'll run the same trade tomorrow, but you could tighten the numbers to buy above today's high if you wanted.

*BUY October Feeder Cattle at 114.025
*Stop 113.425
*Approximate Risk Exposure: $300 per contract
*Profit Target: 116.925
*Approximate Profit Potential: $1450 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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October Live Cattle LCV5
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Cattle is giving us a similar setup; however we've got resistance at 8650 which is getting in the way of buying tomorrow. I might hold off another day to see how prices react to 8650, if at all.
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December Lean Hogs LHZ5
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Ooops, Hogs didn't waste anytime rallying today as the market set another new high. If we get a hiccup here tomorrow (which I think we might) I'll look at putting together a trade.
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6: METALS
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December Copper HGZ5
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Copper continues to be elusive. Too bad...I would have liked to pick up on the ranges of the last couple of days.
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December Gold GCZ5
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Gold is giving us another look, but given the extremely overbought nature of the market I'm going to give it one more day before I put together an order. Hopefully the market won't run away on us.
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December Silver SIZ5
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Silver's following gold's lead, and I'd like to handle it the same way.
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7: SOFTS
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December Cocoa CCZ5
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Got the bounce in cocoa that we were looking for. I'm going to take a more aggressive posture in this market and look at selling a tick below this week's low. If you want to be a little safer, wait until the other side of the 1350 line before getting in.

There is major long term support at 1300 which we'll have to keep in mind, but I'm going to use the next support at 1200 as my target.

*SELL December Cocoa at 1353
*Stop 1381
*Approximate Risk Exposure: $280 per contract
*Profit Target: 1211
*Approximate Profit Potential: $1420 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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December Coffee KCZ5
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Hurricane Rita might be pushing coffee prices higher today. Look for resistance at 9500 before we get another chance to sell this market short.
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December Cotton CTZ5
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Nasty reversal today as only cotton can do. I'm happy to see the lower session however, as maybe this is a sign that things are getting back to *normal*. I won't sell just yet, but will keep watching 4940.
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November OJ OJX5
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If you didn't get out of OJ yesterday you would have stopped out with profit after today's session. Good job, take the rest of the day off. ;-)
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October Sugar SBV5
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RSI too a big nosedive today. This makes me think that we could see a big reversal in sugar tomorrow. NOTE: that this is a countertrend trade and inherently more risky than sticking with the trend, but even so I might look at selling support tomorrow.

*SELL March Sugar at 1074
*Stop 1091
*Approximate Risk Exposure: $190 per contract
*Profit Target: 997
*Approximate Profit Potential: $862 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH