Erich and Tom's Updates for Thursday, October 20, 2005
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Market Update for Thursday, October 20, 2005
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Hot off the commodity presses to you!
"I may not be there yet, but I'm closer than I was yesterday." - Anonymous
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1: CURRENCIES
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December Australian Dollar ADZ5
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The AD rallied today after yesterday's big fade day. The market is still pretty choppy however and I'll continue to watch.
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December British Pound BPZ5
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The BP continued in the direction of yesterday's fade and rallied higher with a gap. There's important resistance at 176.50 which could turn the market.
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December Canadian Dollar CDZ5
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The weak trend is making it difficult to commit to any position in the CD. I'd like to buy it but we're getting into that 8550 resistance zone again, so I'll hold off for a bit.
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December EuroFX ECZ5
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The Euro bounced off support today, which is not a real surprise. While the day was pretty strong overall, I'll run the sell order again tomorrow to cover a break through support.
*SELL December EuroFX at 119.37
*Stop 119.73
*Approximate Risk Exposure: $450 per contract
*Profit Target: 117.61
*Approximate Profit Potential: $2200 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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December Japanese Yen JYZ5
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The Yen recovered a bit of yesterday's dip today. If we see rates continue a little higher and fill the gap from the other day, I could be very interested in selling again.
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December Mexican Peso MPZ5
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The Peso stopped us out at breakeven today. This is one of the problems with trading a market that isn't trending very well.
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December Swiss Franc SFZ5
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The Swissy also recovered a little today after yesterday's big decline. I'll run the sell order again tomorrow in case we see a quick reversal.
*SELL December Swiss Franc at 7693
*Stop 7733
*Approximate Risk Exposure: $500 per contract
*Profit Target: 7553
*Approximate Profit Potential: $1750 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December US Dollar Index DXZ5
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A bounce off the contract highs today after the USD poked through for just a few minutes. Again we're following a market without a strong trend so things could be a little tough going for a while.
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2: ENERGIES
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December Unleaded Gas HUZ5
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Huge dip in gas prices today. I can hardly wait until these pullbacks make there way to the pumps! We're trading off pretty solid support at 167.20. How do I know it's solid? It was enough to hold the market up on two occasions now (October 14 and 19).
I'm a little hesitant selling from here because of the support at 163.40; however I might give it a go and keep a tight target.
*SELL December Unleaded Gas at 166.45
*Stop 167.55
*Approximate Risk Exposure: $462 per contract
*Profit Target: 162.30 (watch out at 163.40)
*Approximate Profit Potential: $1743 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December Heating Oil HOZ5
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We were soooo close to riding out the heating oil trade today, but unfortunately we had no luck as the market barely ranged enough to whipsaw us out of our position. Nothing new here tomorrow.
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December Crude Oil CLZ5
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Just like heating oil, we were only 3 cents shy of riding out the pullback in this market. Too bad, since it looks like we got the direction nailed...just framed the trade too tight.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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A big fade day in the Eurodollar today almost ensures that we will see a lower session tomorrow. You can run the original trade tomorrow as well, or wait and see if we get a reaction before adjusting the parameters.
*SELL September (06) Eurodollar at 95.245
*Stop 95.290
*Approximate Risk Exposure: $112 per contract
*Profit Target: 95.035
*Approximate Profit Potential: $525 per contract
*RRR: 4:1
*Degree of Risk: Moderate
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December mini-DOW YMZ5
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Thank goodness the Dow gapped our entry on the open! This was an incredible day for the bulls, and while I halfway expecting a bit of a rally I never envisioned a day like this!
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December mini-NAS NQZ5
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The NAS also gapped us on the open and voided our trade. Nice to see a gap working in our favour for a change. Obviously that 1533 - 1534 support was a lot stronger than it looked!
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December mini-S&P ESZ5
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The S&P also gapped our entry this morning as prices made a huge reversal from the 1173 support, which is nearly non-existant on the daily and weekly charts. About the best I can do to explain it is that it was a premature reversal before weekly support at 1165.
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4: GRAINS
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December Corn CZ5
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A very tiny range in corn today as the market continues to hold support at 201. While there is plenty of upside potential, the market can't find the impetus to head higher.
I certainly hope we see a solid break through support tomorrow - at least so we can get the trade to breakeven. You could bring your stops above today's high, but there isn't too much to save risk-wise.
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December Oats OZ5
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Oats showed us support today off the price trendline. The market has been less than cooperative lately, so I'll wait for confirmation before committing to a position.
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November Rice RRX5
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Rice is still honouring the 724 support zone. We could tighten the trade to enter above today's high, but I think it might be a bit too early. I'll run the original plan for now, but would like to see another day like today.
*BUY November Rice at 750.5
*Stop 739.5
*Approximate Risk Exposure: $220 per contract
*Profit Target: 787.5
*Approximate Profit Potential: $740 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Soybean Meal SMZ5
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Soy meal is showing us some support at the 170 area today. I'm not quite ready to buy yet, but a confirmation tomorrow could get me serious to buy before the weekend. Maybe.
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December Soybean Oil BOZ5
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Bean Oil still wants to trade higher, but continues to look for a good reason to do so. I'll hold off another day, but this is one to keep an eye on.
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November Soybean SX5
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Like soy meal, the big bean contract is also showing us support today. I'm tempted to buy it long tomorrow, but not all the ducks are in a row yet, so I'll wait. Hope I don't regret it.
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December Wheat WZ5
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The wheat slide slowed somewhat today. Maybe if we see a hesitation here tomorrow we can be in a position to re-enter this market.
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5: MEATS
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November Feeder Cattle FCX5
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A moderately higher day for Feeders today. There is an important cattle report due out at the end of the week and I'd love to see the market put on the brakes tomorrow in anticipation of the release.
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December Live Cattle LCZ5
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If that isn't a rejection of higher prices I don't know what is! Just take a look at how the market attempted to run prices up and how badly it failed. I will look to sell cattle tomorrow below the low, but I'll try to give prices a little wiggle room to hopefully avoid a bad fill.
*SELL December Live Cattle at 8967
*Stop 9032
*Approximate Risk Exposure: $260 per contract
*Profit Target: 8732
*Approximate Profit Potential: $940 per contract
*RRR: 3 1/2:1
*Degree of Risk: HIGH
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December Lean Hogs LHZ5
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Hogs might be getting serious about pulling back. Look for a possible rally to top out at 6225-ish. I want to sell hogs in the worst way, and one more higher day will get me looking short.
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6: METALS
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December Copper HGZ5
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Copper fell off slightly today and I wouldn't mind seeing it continue lower tomorrow as well. We should have something tradable in a day or two.
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December Gold GCZ5
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Not good news for our long position today as the floor fell out of the gold market. It looks as though this market might be in for a bit of a decline in the days to come. If we get a half decent signal I might give it another go.
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December Silver SIZ5
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Silver followed gold lower today, but unlike gold, silver is at an important support level. It will be interesting to see if we get a bounce tomorrow, or not.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa has me a little baffled today. RSI is hooking lower; however prices traded higher. Normally this divergence means that prices will head lower and I considered selling but support at 1370 kept getting into the way.
I'll have to hold off another day on the short, but I'll run the buy order again tomorrow.
*BUY December Cocoa at 1421
*Stop 1397
*Approximate Risk Exposure: $240 per contract
*Profit Target: 1497
*Approximate Profit Potential: $760 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Coffee KCZ5
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There is the beginning of the much anticipated pullback in coffee. If we get another lower session it will make buying the market much safer.
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December Cotton CTZ5
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The bottom continues to fall out of the cotton market. Look for possible support at 5300 tomorrow.
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November OJ OJX5
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Another big day in OJ; however the severe *fade* would hint that lower prices are around the corner tomorrow. That might get us into a position to buy the market again.
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October Sugar SBV5
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Sugar's actually being relatively cooperative...for sugar that is. I am still expecting a continued testing of support and will hold off buying the market for a little while longer.
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"Tom's Trades" for Tuesday, October 18, 2005
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=3-02 HI=3-07 LO=2-25 CL=2-26
Today was the kind of day I had in mind when I wrote TT over the weekend. I bought 113-03 but I knew it wasn't going any where significant ... I was right. We went to -07 and came right back for a B/E. Couple of ticks higher I would have grabbed what I could and sold off the break below -08. Rules are rules so I bought -03 again with the same B/E result. I packed it in from there.
The close at 112-26 sets up 112-16 and 113-00 for tomorrow. Refresh your view by re- reading TT from the weekend.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.440 HI=.445 LO=.405 CL=.405
If we challenge 95.450 tomorrow and fail I'll take a flyer at selling one. I think I'll also buy a break above. Keep both stops tight but the buy is a pure scalp ... short leash time.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=05 HI=36 LO=75 CL=23
Nothing for us today. We'll stay with the same numbers for tomorrow ... TT and 8475 plus I will trade 8500 if it breaks lower with a sell. No buy at 8500.
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4: DECEMBER SWISS FRANC
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SFZ5 O=46 HI=78 LO=91 CL=60
We bought 7762. We made a little bitty run to 7778 and failed. I bailed at 7772 for a small $125 profit.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=7.60 HI=0.50 LO=9.00 CL=0.10
I tried to get one sold above 621.50 on the break of 622 but couldn't get it filled. I bought 622.40 which I exited at 622.30 losing $10. I bought 622.50 and exited at 624.60 for $210. I sold 621.50 and out at 622.40 losing $90. Sold 621.60 and was stopped out at 621.80 losing $20. I sold 21.60 a second time. This one worked out a tad better as we exited at 619.80 for $180. I bought 622.50 and we caught a real flyer. We exited at 630.50 for $800. I sold 629.50 and exited at 630.20 losing $70. Next up we bought 630.30 and dumped it at 632.80 on a "once broken" play for $250. I missed the buy off 632 as it never went back quite low enough to let me in. I didn't have to wait very long as our next number in line, 635, came right up. I tried to sell before 634.50 but couldn't get it. I quit right there as we had $1050. We left one nice run higher on the table by quitting a bit early. All the numbers tomorrow
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6: DECEMBER GOLD
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GCZ5 O=1.00 HI=1.00 LO=4.00 CL=5.80
Sold 468.70. The confirmation was a pretty weak one. I would accept criticsm here on the challenge of the confirm. I can tell you the gap open itself was afactor as was the first green candle with a buck 20 bounce and a 70 cent wick. I exited at 465.40 for $330. $10 channel tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.90 HI=.95 LO=.57 CL=.29
We sold 54.80 on the break off 55.00. I exited at 53.75 for 105 points, $525. That was it for the day. We'll go again tomorrow with the same array of numbers from TT plus 56.00.
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8: DECEMBER COCOA
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COZ5 O=95 HI=05 LO=86 CL=92
Nothin' today. Same numbers for tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.01 3/4 HI=2.02 1/4 LO=2.01 1/2 CL=2.01 3/4
Couldn't even manage the bounce off 2.02. Watching only.
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10: DECEMBER WHEAT
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WZ5 O=3.28 HI=3.30 LO=3.26 1/4 CL=3.27 3/4
Sell a break of 3.26; buy a retest that fails to drive lower as it comes back above 3.26 3/4.
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