Erich and Tom's Updates for Friday, October 14, 2005
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Market Update for Friday, October 14, 2005
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Scroll down about halfway for Tom's Trades!
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1: CURRENCIES
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December Australian Dollar ADZ5
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What a crazy day in the AD! I don't think I've ever seen a gap like this in ANY market. Wow!
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December British Pound BPZ5
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The BP broke the RSI trendline today, so we could see a bit of a rally over the next few days. We're still technically in a downtrend so I'm not buying just yet.
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December Canadian Dollar CDZ5
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The CD tanked hard today stopping us out on the open. I had a bad feeling about this trade when we got such a wishy-washy fill yesterday. Nothing new here tomorrow.
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December EuroFX ECZ5
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Did you notice the low today? Yep, right off the 119.50 support. Now that rates have tested here we will probably see them head higher.
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December Japanese Yen JYZ5
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The Yen fell off enough today that we can get our trade to breakeven for tomorrow. If you want to protect some profit you can bring stops above today's high.
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December Mexican Peso MPZ5
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Notice how the Peso stalled on the 90.200 support zone today? That's why it's always tough to buy/sell a market after a strong session. I think I'll put the market on hold for Friday as well.
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December Swiss Franc SFZ5
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I'm glad I resisted selling the SF today. The problem was the support on the contract lows, and today you can see why. Expect the SF to rally tomorrow.
*BUY December Swiss Franc at 7843
*Stop 7797
*Approximate Risk Exposure: $575r contract
*Profit Target: 8143
*Approximate Profit Potential: $3750 contract
*RRR: 6 1/2
*Degree of Risk: HIGH
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December US Dollar Index DXZ5
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Today's range was just plain *dirty pool* as the market barely broke resistance and then backed off. I normally don't trade a market after a loss, but I think I'll make an exception tomorrow.
RSI is at a testpoint, so it's decision time in this market. Given the strength in the other currencies, it makes sense that the USD is coming down.
*SELL December US Dollar Index at 8927
*Stop 8957
*Approximate Risk Exposure: $300 per contract
*Profit Target: 8657
*Approximate Profit Potential: $2600 per contract
*RRR: 8 1/2:1
*Degree of Risk: HIGH
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2: ENERGIES
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December Unleaded Gas HUZ5
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As expected, Gas made a big reversal today. Too bad we couldn't find any resistance to trade from! Tomorrow's a different story, as we've got the super strong support at 175 just below today's low. If you've got $500 that you don't need you might consider selling a break.
*SELL December Unleaded Gas at 175.30
*Stop 176.50
*Approximate Risk Exposure: $504 per contract
*Profit Target: 170.10
*Approximate Profit Potential: $2184 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December Heating Oil HOZ5
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Heating Oil also reversed today, but RSI is short of a test point so I'm going to hold off one more day to see if we can't get a better signal.
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December Crude Oil CLZ5
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Same thing for Crude.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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What's with the crummy fills this week? Sold the ED today just after the open as rates hit our entry before reversing. The high close has me a little nervous about tomorrow as well, but there's not much we can do right now.
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December mini-DOW YMZ5
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Nothing new to report in the DOW. A rather aimless day today. Nothing new here tomorrow.
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December mini-NAS NQZ5
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The NAS made a big range today hitting our exit stops. Depending where you put them you either left at breakeven or as much as $400 in profit. I only managed to nail the market for $200 myself.
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December mini-S&P ESZ5
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The S&P also ranged wildly today. If you brought your stops to breakeven you would have been tagged, otherwise you're still short. Bring the stops to breakeven for tomorrow however...just in case.
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4: GRAINS
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December Corn CZ5
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I can't believe how corn is stuck between support and resistance. I sure hope we get a strong breakout when it finally comes.
*SELL December Corn at 201 1/4
*Stop 204 3/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 190 3/4
*Approximate Profit Potential: $525 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
OR
*BUY December Corn at 208 1/4
*Stop 205 1/4
*Approximate Risk Exposure: $150 per contract
*Profit Target: 217 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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A less ambitious day in oats today compared to yesterday. You'll want to make certain your stops are at least a breakeven going into the weekend.
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November Rice RRX5
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Yep, I knew I'd regret not buying rice today. What was my reasoning again? I forget.
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December Soybean Meal SMZ5
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We're in the clear with Soy Meal today as prices continued higher, never threatening our stops. Tomorrow's Friday and a reaction of some sort is likely. If you want to try and *ride* it out, bring stops to 172.3, otherwise make them as tight as you dare. Below today's low looks like a good comprimise.
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December Soybean Oil BOZ5
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Bean Oil is reacting a little early and we could see a good sell coming up next week. I'll avoid doing anything new going into the weekend however.
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November Soybean SX5
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Beans reacted to the 596 resistance today. RSI is hooking as well, so we'll probably see a lower session tomorrow. That should give us another chance to buy in next week.
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December Wheat WZ5
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A disappointing end to our wheat trade as prices reversed and took us out at breakeven. Nothing new here tomorrow, but you can expect prices to dip.
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5: MEATS
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November Feeder Cattle FCX5
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Nope, no pullback in Feeders. I can't believe the strength in this market. This is quite unusual. Really.
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December Live Cattle LCZ5
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Bought Cattle today on a break above resistance. Here's hoping that the trend takes over and prices continue higher tomorrow, because there's not much we can do with our stops until then.
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December Lean Hogs LHZ5
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Hogs finally found a bit of support, and if it wasn't Friday tomorrow I'd place a sell below the lows. As it is I'll see if we don't get a bit of a pullback.
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6: METALS
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December Copper HGZ5
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A big day for the copper bears as the forced the market considerably lower. Keep an eye on 175, that will be an important number tomorrow...I think.
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December Gold GCZ5
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Gold seems to be showing us some support today and if the USD falls off tomorrow, we will likely see prices rally. Nothing new for me - yet.
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December Silver SIZ5
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It's soooo tempting just to blindly buy silver tomorrow in anticipation of a rally; however I haven't got any suitable numbers to trade from right now.
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7: SOFTS
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December Cocoa CCZ5
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After all our hard work in this market, we got stopped out at breakeven today. Nothing new here tomorrow.
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December Coffee KCZ5
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Coffee tested support at 9900 today and we could see prices resume the rally tomorrow, but this is a little rich for me going into the weekend.
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December Cotton CTZ5
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Wicked range today as only cotton can do. The low close would suggest prices don't want to go any higher, but that's just a guess.
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November OJ OJX5
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OJ's getting closer to being a bonafide buy again. I'll continue to run the order tomorrow.
*BUY November OJ at 105.25
*Stop 104.05
*Approximate Risk Exposure: $180 per contract
*Profit Target: 109.45
*Approximate Profit Potential: $630 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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October Sugar SBV5
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Is that sugar's version of a pullback? Who the heck knows with this market?
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"Tom's Trades" for Friday, October 14, 2005
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=2-20 HI=2-28 LO=2-14 CL=2-23
Action in the electronic just before the RTH open accounted for the gap at the open. We bought -21 and were stopped at B/E. We bought -21 a second time and I exited at -26 for 5 ticks, $156. It was pretty clear we had a nothing day happening so i moved on at that point. The close at 112-23 has us set to play at 113-00 or 112-16.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.375 HI=.420 LO=.370 CL=.415
Not there yet.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=30 HI=32 LO=55 CL=58
We sold 8478 with a stop at 87 as detailed in TT. I rolled to B/E as we broke 70 and wa stopped at B/E. We sold 77 and made it down to 8455 where we rolled to 61. We fill came thru at 66 so we picked up $110. No complaints, that's where the market was.
I'll play the TT numbers again tomorrow. I doubt we'll see 8600 but we'll have another shot at 8480 me thinks.
There was a typo in Tuesday's CD comments ... I meant to say DONE not DOWN ... I corrected it below and reposting the comments here so you get another crack at reading something that will now make better sense.
Let me share with you a bit about my current thoughts on the currencies applicable to both the CD and SF. The volume is being DONE electronically. About this there is no doubt. While I have ben resistant to move my trading into the electronic market there is too much potential for danger to avaoid doing so. I have a bit of the "old dog, new trick" syndrome that's been plaguing me for a while now. It is time to make some changes and move forward. Beginning with this weekend's TT I will switch my currency trading to electronic.
I will only initiate trades during the RTH session much as we do in the Russell. I will occassionally leave trades on thru the entire electronic session with a stop and/or limit order working. I have not yet decided whether I will formulate my trades only of of candles occurring during RTH hours or consider the entire electronic chart. I'm still doing some comparative analysis on this subject. My suspicion is that I will indeed use only that portion of the chart unfolding in RTH hours. I will confirm that fact to you in this weekend's TT.
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4: DECEMBER SWISS FRANC
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SFZ5 O=69 HI=05 LO=24 CL=05
Nothing for us as we gapped at the open. We did however climb all the way back to 7800 so we'll play that number again tomorrow. The comments above in the CD section apply exactly to the SF as well.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=2.30 HI=6.90 LO=6.20 CL=4.00
As it turned out we only had 2 numbers in play the entire day ... 627 and 622. Made it pretty easy to focus. The trading window opened and we bought 622.40 and exited at 621.70 losing $70. Simultaneously I sold 621.70 which we exited at 619.00 for $270. The full array from TT for tomorrow. We next sold 621.40 and closed it out at 619.10 for $230. We bought 622.40 and exited at 621.90 giving back $50. I bought 622.60 and exited 622.30 attempting to keep it B/E ... another $30 loss. Sold 621.50 and out at 620.40 for $110. Next up we sold 621.40 and out at 619.50 for $210. I bought 622.40 and got stopped at 621.50 losing $90. We sold 621.50 and exited at 617.50 for $400.
That put us at $980 net for the day and I'd had enough anyway so I envoked the $1000 rule and quit. No doubt we left another couple of hundred on the table. That's OK.
All the numbers tomorrow
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6: DECEMBER GOLD
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GCZ5 O=4.00 HI=5.20 LO=0.30 CL=3.80
We bought 471.50 on the confirming dive to 470.30. I exited by choice at 473.20 as we got within 10 minutes of the close. We picked up $170. $10 channel tomorrow if it shows the confirmation either way.
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7: DECEMBER COTTON
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CTZ5 O=.90 HI=.80 LO=.80 CL=.18
Nothing today. I'll still sell abreak of 56.00 tomorrow.
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8: DECEMBER COCOA
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COZ5 O=52 HI=73 LO=52 CL=69
We bought 1354. I exited at 1368 as we, predictably, ran out of gas at 1370 for $140. We'll stay with the TT numbers for tomorrow as well as play 1350.
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9: DECEMBER CORN
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CZ5 O=2.05 1/4 HI=2.05 1/4 LO=2.02 3/4 CL=2.03 1/2
It's tempting to buy any further retest of 2.02 1/2 or so. I think I'll continue to watch for a while though.
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10: DECEMBER WHEAT
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WZ5 O=3.45 HI=3.50 LO=3.44 1/2 CL=3.47 1/2
Nothing today. I'll stay with selling the retest at 3.50 or the break below 3.38. I'll buy the retest of 3.38 it it fails to go lower and turns back higher. Just looks "toppy" doesn't it?
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