Erich and Tom's Updates for Thursday, October 13, 2005
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Market Update for Thursday, October 13, 2005
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Scroll down about halfway for Tom's Trades!
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"Keep away from people who try to belittle your ambitions. Small people always do that but the really great make you feel that you too can be great." - Mark Twain
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1: CURRENCIES
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December Australian Dollar ADZ5
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The AD rallied a bit today, which is a bit of a surprise given yesterday's gapto the downside. Nothing new here tomorrow.
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December British Pound BPZ5
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Looks like even if we did manage to sell the BP yesterday, today the marke would have taken it all back. Funny thing opening gaps. While they can upset you when they happen, many times it turns out to be a good thing. Nothing here tomorrow.
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December Canadian Dollar CDZ5
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We ended up buying the CD today on a break above the 8560 resistance. The fill was far from stellar and I sincerely hope for a better performance tomorrow.
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December EuroFX ECZ5
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The EC also reacted a bit to yesterday's dip. I'm still watching and waiting.
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December Japanese Yen JYZ5
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If you did sell the Yen yesterday you'll want to bring your exit stops to either breakeven or above today's high for tomorrow's session.
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December Mexican Peso MPZ5
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A big dip in the Peso today. Rates are just above the 90.200 support level. If we break through here we'll be good to sell.
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December Swiss Franc SFZ5
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I thought about selling the SF tomorrow below today's low, but we might actually be seeing a change in the market trend. We should know in another day or two.
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December US Dollar Index DXZ5
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The USD backed off our resistance today, and I'll run the trade again tomorrow; however as with the SF, I think we could be seeing a change in the market direction building.
*BUY December US Dollar Index at 9011
*Stop 8977
*Approximate Risk Exposure: $340 per contract
*Profit Target: 9193
*Approximate Profit Potential: $1820 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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2: ENERGIES
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December Unleaded Gas HUZ5
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RSI has hooked slightly lower today but Gas prices rallied. I would expect the market to fall off tomorrow based on RSI, but I can't find a decent resistance level to base a trade on!
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December Heating Oil HOZ5
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Heating Oil has more resistance in the 206 neighbourhood, but unlike Gas we're not getting a corresponding hook in RSI. Think I'll just watch tomorrow.
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December Crude Oil CLZ5
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Crude is up against major resistance at 6390 today. We're short of an RSI test however, but if we see a reaction I'll try to sell on Thursday.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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If you're short the ED then today's session allows you to bring stops to breakeven. If you're not short you've got another chance to sell below this week's low.
*SELL September (06) Eurodollar at 95.275
*Stop 95.335
*Approximate Risk Exposure: $150 per contract
*Profit Target: 95.065
*Approximate Profit Potential: $525 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December mini-DOW YMZ5
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While it doesn't look like it on the daily chart, today's session actually whipsawed us - unfortunately. It looks like we had the right idea about this market, but just caught an unlucky break.
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December mini-NAS NQZ5
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The NAS made up for the Dow today though, as rates fell off sharply. Bring exit stops at least to breakeven for tomorrow, and as tight as just above today's close. It all depends on how much of our $400 in profit you want to protect. While the *ideal* stop is breakeven, you might also consider the resistance at 1535 as a good hiding spot.
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December mini-S&P ESZ5
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The S&P was a little more cooperative than the Dow and didn't whip us out of our sell order today. There is enough in the trade that you can bring it to breakeven if you like. Alternatively you could move stops above the 1185-86 resistance. Ideally you would leave stops where they are for one more session, but $350, plus today's accumulated profits, is a lot to risk.
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4: GRAINS
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December Corn CZ5
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Corn rallied today, but came up short of our buy order. I'll run the same trades again tomorrow.
*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
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*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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Got a nice fill in Oats today as prices had a strong showing. Bring stops to breakeven for tomorrow, or if you're comfortable with the risk position, leave them where they are for one more day.
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November Rice RRX5
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I'm probably going to regret waiting, but I'll hold off buying rice one more day. There's good resistance at the 742 high, but I just don't trust the market right now.
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December Soybean Meal SMZ5
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We caught a doozie of a move in Bean Meal today as we bought the market from the low and watched it rally the rest of the session! I just love day's like today, don't you?!?
Now comes the tough part, moving stops. We've got almost $600 in profit as of the close, so no one is going to blame you if you want to snuggle your stop nice and tight. Alternatively, if you're trying to let the trade run a bit, bring stops either to breakeven, or below the 172.5 resistance.
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December Soybean Oil BOZ5
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Darn! We had all the right signals for Bean Oil, but the market gapped our entry thereby voiding the trade. We'll keep watching for another chance to buy.
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November Soybean SX5
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October is turning out to be *Gap Month* as we're getting bumped from soooo many good trades by opening gaps. Today's bean trade is another example of pegging a perfect trade only to have the market gap the entry on the open.
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December Wheat WZ5
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Wheat rallied today giving us a bit of breathing room on our buy yesterday. Bring stops to breakeven for tomorrow's session.
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5: MEATS
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November Feeder Cattle FCX5
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Feeders might finally be listening to all my belly-aching and put on the brakes today. Now, do you think we'll see a pullback?
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December Live Cattle LCZ5
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Cattle continues to hold the resistance line, so I'll look to buy a break above, but it's looking like prices might actually come down a bit first.
*BUY December Live Cattle at 9192
*Stop 9137
*Approximate Risk Exposure: $220 per contract
*Profit Target: 9437
*Approximate Profit Potential: $980 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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December Lean Hogs LHZ5
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The bottom fell out of the hog market today as prices broke yesterday's low and officially moved into a bear market. Nothing new here tomorrow.
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6: METALS
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December Copper HGZ5
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Copper had quite a lower session today which makes me think we're going to see a pullback over the next few days. 175 is the number to keep your eye on for support.
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December Gold GCZ5
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Gold backed up on us today stopping us out when prices broke 477's support. I knew we were in trouble after yesterday's crummy fill, but there wasn't much we could do about it.
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December Silver SIZ5
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Silver continues to stall today. Nothing new here tomorrow.
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7: SOFTS
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December Cocoa CCZ5
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Whew! That was close! Cocoa continue lower today after making a run at our stops yesterday. If you haven't done so already you'll want your stops to breakeven for tomorrow.
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December Coffee KCZ5
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Still looking for another chance to buy coffee...but not tomorrow.
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December Cotton CTZ5
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Cotton rallied a bit today, and I considered buying it above today's high tomorrow, but I think I'll hold off for a bit. I'll get more serious as we get back to 5600's resistance.
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November OJ OJX5
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Big bounce after yesterday's decline. Sticking with the original plan for 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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I need a serious pullback to get me interested in this market again. Just watching for tomorrow.
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RECOMMENDED BROKER
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"Tom's Trades" for Thursday, October 13, 2005
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=3-24 HI=3-26 LO=3-02 CL=3-07
The bonds traded -26 to -15 almost to the final hour never giving us an at bat. About 12:35 CDT we finally broke south and we sold one at 113-14. We went quickly to 113-02 at which point I moved my stop to -05 which was almost immediately hit. Out with 9 ticks, $281.
The close at 113-07 has us set to play at 113-00 or 113-16.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.405 HI=.420 LO=.390 CL=.405
Not there yet.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=56 HI=76 LO=41 CL=61
Nothing for us here as the CD rocketed upward. Look for the failure at 8600 to sell as per TT weekend.
There was a typo in yesterday'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=08 HI=30 LO=04 CL=22
7804 was surely close enough to be considered a test, the next tick at 14 was not. We could only watch. I'll play the same 7800 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 O1.70 HI=4.00 LO=8.30 CL=1.90
We suspected the stock market would have a difficult time holding anything in the 670's and thus far it looks as though that forecast is coming true. This puts us in a bad place because we have no structure to speak of below 642 and it disappears totally below 634/632. We'll be on the sidelines for a bit I fear. Atleast until we get some significant construction projects going on at levels below current pricing. This may have been our last day for a bit.
They didn't give us much to work with today. We sold the break of 632 at 631.60 which we exited at 626.20 for $540. There were some nice runs up and down that followed but we had no numbers in the ranges.
So, now we have a dilemma. Do we sit tight while structure builds or do we stretch the rules a bit and go steal some numbers from the weekly perpetual chart? Since we are still at relatively high levels from an historical perspective I favor pulling some numbers as opposed to a prolonged period of hand sitting. You should do as guided by YOUR sensibilities. I will add the following numbers to my mix beginning tomorrow:
637, 630, 627, 622, 601 and 581.
That will expand our base a tad and as most of them are pretty strong, I don't believe we're sacrificing a lot of number integrity. The full array from TT for tomorrow.
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6: DECEMBER GOLD
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GCZ5 O=1.50 HI=2.20 LO=4.30 CL=6.60
We sold 478.50 and exited at 476.50 for $200. Sold 478.50 a second time and exited this one at 475.50 for $300. 476 is no longer a trade. $10 channel tomorrow if it shows us a sell.
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7: DECEMBER COTTON
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CTZ5 O=.50 HI=.07 LO=.27 CL=.90
Nothing at our numbers today as cotton exhibited some power. I'll take one shot at selling a retest of 56.00 with a 56.09 stop.
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8: DECEMBER COCOA
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COZ5 O=50 HI=58 LO=47 CL=49
Nothing done. We'll stay with the TT numbers for tomorrow as well as play 1350 by buying a break back above with a stop at 1347.
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9: DECEMBER CORN
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CZ5 O=2.04 HI=2.07 1/2 LO=2.03 3/4 CL=2.05 3/4
Watching, hands firmly sat upon.
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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
If we retest 3.50 and fail, I'll sell it. Penny and a quarter stop. I won't buy the break above ... yet.
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