Erich and Tom's Updates for Tuesday, October 18, 2005
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Market Update for Tuesday, October 18, 2005 ==================================================
Hot off the commodity presses to you! Scroll down about halfway for Tom's Trades.
"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 Aussie Dollar is still all over the place. This market is going to be choppy until it finally commits to a trend.
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December British Pound BPZ5
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The BP fell off substantially today. We're going to get a support test in the next couple of days, probably around 174.20, as well as an RSI testpoint. This will be crucial in determining the market's future direction.
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December Canadian Dollar CDZ5
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The CD is still reacting to support at 8450. If we see one more day trade higher then I'll get really serious about selling again. Nothing new here tomorrow.
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December EuroFX ECZ5
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The EC also reacted today, and I'm not quite sure what to make of it. One thing's for certain, I won't be buying until we clear last week's high.
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December Japanese Yen JYZ5
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Too bad we weren't able to ride out the Yen's rally last Friday as today rates traded much lower. We could look to sell below last week's low; however the market is a little unsettled. I wouldn't mind seeing things tighten up a bit.
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December Mexican Peso MPZ5
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Bought the Peso this morning on a nice breakout through resistance. You can bring your stops to either breakeven, or just below today's low for tomorrow's session.
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December Swiss Franc SFZ5
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Ouch! That REALLY hurt as we got stopped out on today's low open. Darn opening gaps!
I should be selling the SF below today's support tomorrow; however we'll have another chance at the contract lows if rates continue lower tomorrow.
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December US Dollar Index DXZ5
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Not a good way to start the week as the USD stopped us out of our position as well today. At least it didn't gap, so as to add insult to injury, and found our exit stop the old fashioned way.
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2: ENERGIES
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December Unleaded Gas HUZ5
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Gas rallied today, as expected. Look for prices to continue higher for at least a day or two. The 186 area looks like the first resistance to higher prices.
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December Heating Oil HOZ5
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Big gap higher as Heating Oil rallied today as well. Here too we will probably see the market continue higher for the short term. You can run the weekend trade tomorrow if you like, but you probably won't see a fill.
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December Crude Oil CLZ5
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The only difference between crude and the other energies is that the market is at an RSI test right now. As such I'll look to sell crude on a break below today's low. I should mention that this is a very risky trade.
*SELL December Crude at 6215
*Stop 6265
*Approximate Risk Exposure: $500 per contract
*Profit Target: 5955
*Approximate Profit Potential: $2600 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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This might be a little premature, but the ED is trading back at the 9527 support from the other day. If rates break last week's low we can sell the market, and cover above the 9527 area for resistance.
*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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The Dow took off today, and while the market is at an important resistance area, we haven't got a confirmation to sell just yet. I'll hold off another day and wait for a reaction.
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December mini-NAS NQZ5
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The NAS also rallied today, but unlike the Dow or the S&P, RSI is at a testpoint so I'll put together an order in case we see a reaction.
*SELL December mini-NAS at 1539.5
*Stop 1550.5
*Approximate Risk Exposure: $220 per contract
*Profit Target: 1506.5
*Approximate Profit Potential: $660 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December mini-S&P ESZ5
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The S&P also rallied today, but like the DOW we don't have a confirmation to sell yet. If we get a reaction tomorrow to confirm resistance we can sell the market after that, but for tomorrow I'll just watch.
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4: GRAINS
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December Corn CZ5
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We're still holding on to our corn short, but just barely. I still don't hold a lot of hope out for this position, but there's nothing we can do with our stops at the moment either.
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December Oats OZ5
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The Oat market found support today on the 164 support line. Expect prices to react and rally higher tomorrow. I'll be placing a very tight trade to buy the market long, but you can relax the parameters a bit if you wanted.
*BUY December Oats at 168 1/4
*Stop 166 3/4
*Approximate Risk Exposure: $75 per contract
*Profit Target: 175 3/4
*Approximate Profit Potential: $375 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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November Rice RRX5
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Rice hit the 723 - 724 support zone today and reacted appropriately. I thought we'd see RSI reset itself a bit more than this, but maybe not. I'll be placing a buy order above last week's high in case we see a rally.
*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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We got tagged by Soy Meal today as prices traded low enough to find our exit order. It's not all bad though, as we're walking with $560 per contract in profits. I'll give the market the day off tomorrow, but I'm looking for another chance to buy.
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December Soybean Oil BOZ5
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Bean Oil gapped our entry again and voided our trade. The low close doesn't look all the encouraging anyway, so it might not have been a bad thing. Besides, this is BO, we'll probably get another chance.
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November Soybean SX5
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Not a good day in the big Bean market either, as prices gave us a good whipping. Thank goodness it was only $225.
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December Wheat WZ5
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Wheat filled the gap today so we could see a reaction to this support tomorrow. I'm not getting ahead of myself however, and will only consider buying if we get a reaction tomorrow.
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5: MEATS
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November Feeder Cattle FCX5
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Feeders are at the 20 day moving average support today. This is important as a break here sends us into bear territory and a bounce could mean the bulls might pull it out of the bag.
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December Live Cattle LCZ5
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Cattle followed through with another big bear day today. We should see a reaction tomorrow however, as it's not like cattle to rally (or fall) for more than a couple of days in a row.
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December Lean Hogs LHZ5
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Hogs are still running away on us. C'mon guys...give me a break and hesitate!
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6: METALS
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December Copper HGZ5
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Oh-no! We had you, copper! We had you nailed! And then you go an gap on the open! Not fair! Not fair!
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December Gold GCZ5
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Got the Gold fill today as prices rallied through nearby resistance. Something's gotta give though, either gold or the USD. We should know which one tomorrow. You might want to bring your stops in below today's low in case it's gold.
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December Silver SIZ5
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Silver continues to be a strong market as prices rallied again today. We've got another hit on the resistance at the 792.5 line, and we'll use this area to cover a position we initiate above last week's high. Profit target is resistance just under the contract highs.
*BUY December Silver at 797.5
*Stop 791.5
*Approximate Risk Exposure: $300 per contract
*Profit Target: 820.5
*Approximate Profit Potential: $1150 per contract
*RRR: 3 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's lack of a trend is obvious today as prices continue to chop. I'm standing aside tomorrow.
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December Coffee KCZ5
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If you listened to the market minutes audio you know I was humming and hawing about buying coffee again...guess I should have.
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December Cotton CTZ5
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Cotton's hit on the high today gives us a way to tighten up this trade considerably. I'll look to enter long above the high from July 5th and cover on the other side of the 5690 resistance.
*BUY December Cotton at 5727
*Stop 5687
*Approximate Risk Exposure: $200 per contract
*Profit Target: 5891
*Approximate Profit Potential: $820 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
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November OJ OJX5
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I don't know what to tell you folks. This has been an extremely bad month for gapping markets so far. Today OJ also gapped a perfectly good trade and left us on the sidelines again.
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October Sugar SBV5
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Will sugar get low enough to give us an RSI test? I sure hope so!
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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=2-23 HI=2-30 LO=2-16 CL=2-19
We couldn't do anything in the early stages of the session. About 9 am CDT we sold 112-28. At 112-16 we cancel replaced our stop to market and exited at -18 for 10 ticks, $316. That was it for the day. The close at 112-19 has us watching 112-16 and 113-00 for tomorrow.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.395 HI=.415 LO=.385 CL=.395
Somethings brewing. Not there yet.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=49 HI=07 LO=46 CL=79
I bought 8455. We had a nice run right up to 8500 and change. It was pretty evident the run was over at 8507 as it failed. We made it out at 8503 for $480. We'll play the same number tomorrow plus I will play 8475 either way.
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4: DECEMBER SWISS FRANC
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SFZ5 O=43 HI=58 LO=74 CL=90
I'll play off 7760 tomorrow but, only with a buy. No Shorts, period. The stop is 53 and we roll to B/E at 7871. The target is 7840. If we get thru there we'll up it to 7940.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=4.40 HI=8.70 LO=7.70 CL=6.00
We opened up the day buying 635.30 and exited at 636.70 for $140. I tried to sell the break of 637 but it was moving too fast. We bought 635.40 and out after a scary ride at 637.70 for $230. Next, we sold 636.60 and exited at 632.30 for $430. I needed to catch my breath a bit so missed a couple of trades that look as thought they might have made some. I sold 631.60 and exited at 632.30 losing $70. I sold 631.60 again and exited at 623.20 losing another $60. I sold 631.60 a third time and exited on a "once broken " play at 629.20 for $240. I bought 630.40 and out at 631.40 for $100. That gave me a tad over a grand ... quittin' time. All the numbers tomorrow
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6: DECEMBER GOLD
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GCZ5 O=3.60 HI=8.00 LO=3.50 CL=6.60
Nothing doin'.
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7: DECEMBER COTTON
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CTZ5 O=.93 HI=.93 LO=.90 CL=.00
We sold 56.80. I was busy with the Russell and couldn't watch after it took off south. I put in a stop at B/E and a limit at 56.05. We lucked out as it broke 56.00. We're out at 56.05 for 75 points, $375. I came back and found us on our way back up. I sold 56.45 as .50 failed. I again put in a limit as the Russell was calling me and again exited at 56.05 for $200.
We'll add 56.00 to the numbers and go again tomorrow with the same array.
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8: DECEMBER COCOA
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COZ5 O=81 HI=88 LO=65 CL=67
The gap lower at the open killed our plan. But Look where we are ... I get my shot at 1370 after all. We'll play it tomorrow ... pray for no opening gaps. Wanna' bet money on it, nah, me neither. You just know they wouldn't leave it sitting at such a ripe number and actually give us a shot at an entry.
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9: DECEMBER CORN
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CZ5 O=2.02 1/2 HI=2.04 1/2 LO=2.01 1/4 CL=2.03 3/4
You just knew it would open right there. Still an observer.
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10: DECEMBER WHEAT
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WZ5 O=3.35 HI=3.39 LO=3.34 1/2 CL=3.36 1/4
I sold 3.37 1/2 twice and got stopped at B/E twice. Same numbers tomorrow.
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