Erich's and Tom's Update for Friday, October 7, 2005
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Market Update for Friday, October 7, 2005
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1: CURRENCIES
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December Australian Dollar ADZ5
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The joys of trying to trade a trendless market - lower one day,
higher the next. Think I'll stand aside for tomorrow.
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December British Pound BPZ5
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A much bigger reaction in the Pound than I was expecting, but it
brings us to resistance at 177.90, as well as an RSI test. If we
see a reaction here tomorrow it will be ripe for selling next week.
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December Canadian Dollar CDZ5
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We were wise to wait as the CD stalled today. That's not usual
after a big drop like what we saw this week. We'll keep watching
tomorrow.
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December EuroFX ECZ5
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Huge rebound in the EC today as it followed the Pound higher. Same
analysis as the Pound, with resitance at 122.50 and an RSI test. If
we get the bounce tomorrow we're good to sell it further
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December Japanese Yen JYZ5
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We finally got stopped out of our Yen trade today as rates backed
up enough to find our stops. We had a nice little run here, but now
that we've got an RSI test, the bears have to step up, or the trend
could be in jeopardy.
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December Mexican Peso MPZ5
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While other currencies ran higher, the Peso retreated off the
contract highs. This market's a bit range bound at the moment, so
I'm not committing to anything tomorrow.
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December Swiss Franc SFZ5
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It's not surprise that the SF rallied today along with the other
currencies, but what is a surprise is the gap and the big move.
Like the others, we're at an RSI testpoint, so tomorrow is a big
day in this market's future.
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December US Dollar Index DXZ5
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As I'm sure you guessed, the USD gave us the same picture as the
other currencies, but in reverse. Here the market is also at a test
point, so tomorrow is going to set the tone for the next week or so.
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2: ENERGIES
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December Unleaded Gas HUZ5
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Gas shattered the 182 support line today as the bears pushed the
market right to trendline support. If it wasn't Friday I might look
at a sell below here, but I've got a sneaking feeling we're getting
a bounce tomorrow.
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December Heating Oil HOZ5
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I'm still reeling from the whipsaw here the other day as prices
easily found our profit target today. Maybe next time I'll look
closer at an option play to help ride out the ranges.
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December Crude Oil CLZ5
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Crude also fell through our first target today, but unfortunately
we were stopped out with $700 during yesterday's range. No question
about it, the energies are tough to ride out...but we'll get them
again.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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The ED continued higher today, but that's okay as each tick higher
gives us a better selling price. I'm going to take an agressive
posture before the weekend and tighten the trade to sell a break of
today's low.
*SELL September Eurodollar at 95.365
*Stop 95.425
*Approximate Risk Exposure: $150 per contract
*Profit Target: 95.065
*Approximate Profit Potential: $750 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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December mini-DOW YMZ5
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The DOW easily found our profit target today, so if you exited on
target you're up a little over $700 per contract. If you're holding
on you'll have to leave stops at breakeven for tomorrow.
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December mini-NAS NQZ5
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The NAS allowed you to take profits at our first target today,
banking about $620 per contract. If you're letting the trade run,
or still have open positions, put the stops above the high on the
remaining contracts.
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December mini-S&P ESZ5
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If you didn't exit yesterday, the S&P gave you another chance
today. If you're still short, leave stops above 1210 for tomorrow.
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4: GRAINS
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December Corn CZ5
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Corn's not doing a whole-heck-of-a-lot this week...well, not yet
anyway. I'm pulling the order for tomorrow and will pick this one
up again next week.
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December Oats OZ5
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Oats continue to look strong on the surface, but RSI is at another
testpoint. This time I think we'll see prices fall off, but I'm not
selling going into the weekend.
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November Rice RRX5
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Rice finally moved off the support level enough that we can bring
our stops to breakeven for tomorrow. First profit target is
resistance at 751.5.
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December Soybean Meal SMZ5
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Bean Meal gave us a chance to take some profit at 165.6, and if you
were watching during the day you might have gotten something near
there. For the rest of us, we're still short with stops just above
teh market at 169.3.
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December Soybean Oil BOZ5
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Bean Oil is still hunting for support. I'd like to see it fall off
to 2330, that's where I'd get really serious about buying again.
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November Soybean SX5
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Soybeans haven't found our sell order yet, but I will run the trade
again tomorrow. I'm not a fan of doing this before the weekend, but
the support zone has proven itself to be strong so far.
*SELL November Soybeans at 554 3/4
*Stop 561 1/4
*Approximate Risk Exposure: $325 per contract
*Profit Target: 522 1/4
*Approximate Profit Potential: $1625 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
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December Wheat WZ5
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You could tighten the wheat buy to go just above yesterday's high,
as we have a bit of resistance here now, but I'll leave the order
as is for tomorrow.
*BUY December Wheat at 349 1/4
*Stop 344 3/4
*Approximate Risk Exposure: $225 per contract
*Profit Target: 364 3/4
*Approximate Profit Potential: $775 per contract
*RRR: 3:1
*Degree of Risk: Moderate
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5: MEATS
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November Feeder Cattle FCX5
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Feeders are still hanging around resistance today. I might regret
not buying tomorrow, but it's the weekend, and I just don't feel
safe about doing so.
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December Live Cattle LCZ5
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Looks like Cattle might go hunting for support tomorrow. If they do
I'll keep looking to buy on the first reaction...but not tomorrow.
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December Lean Hogs LHZ5
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That's better. Hogs fell off slightly today, and I expect them to
do the same tomorrow. If they do, we might be in a buying position
for next week.
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6: METALS
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December Copper HGZ5
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Isn't it just like copper to call your bluff before the weekend? It
looks like it might be a good chance to buy off the low...but it's
just a little too iffy for me right now.
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December Gold GCZ5
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I'm not looking to take a Gold position tomorrow, so I'll run the
*extreme* buy order from last week, just in case we see a super
rally.
*BUY December Gold at 480.5
*Stop 477.0
*Approximate Risk Exposure: $350 per contract
*Profit Target: 494.5
*Approximate Profit Potential: $1400 per contract
*RRR: 4:1
*Degree of Risk: HIGH
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December Silver SIZ5
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We had no trouble filling our Silver buy today as the market took
off with a rather strong session. Prices are shy of our first
profit target at 768.5, but since tomorrow is Friday, you might
want to lessen your object by a couple of ticks, in case silver
comes up short.
The market is still looking strong however, and you'll want to
bring stops a tick or two below the close to protect those hard
earned profits!
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7: SOFTS
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December Cocoa CCZ5
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Smallish day for cocoa as prices continue to fill last week's gap.
Weak volume makes this look very much like a pullback move, and
higher price might be the result, but I'm sticking with the trend
at the moment.
*SELL December Cocoa at 1367
*Stop 1387
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1301
*Approximate Profit Potential: $660 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Coffee KCZ5
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We're putting the squeeze on coffee as the market reinforced
resistance at 9550 today. Now we can either buy or sell the support
or resistance, but it's still a high risk trade because it's coffee.
*SELL December Coffee at 9135
*Stop 9230
*Approximate Risk Exposure: $356 per contract
*Profit Target: 8715
*Approximate Profit Potential: $1575 per contract
*RRR: 4:1
*Degree of Risk: HIGH
OR
*BUY December Coffee at 9560
*Stop 9445
*Approximate Risk Exposure: $431 per contract
*Profit Target: 9945
*Approximate Profit Potential: $1443 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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Things were going so good, until we got to cotton that is. Today
this market made incredible efforts to rally above resistance only
to whipsaw us out of our trade about an hour later.
If you look at an intraday chart it looks a lot like a
rollercoaster! We're back at a testpoint, so I pretty sure we'll
see lower prices tomorrow...but I'm just watching.
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November OJ OJX5
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If hoping OJ will behave itself one more day so that we can look to
get back into this market next week. Right now it still looks a
little to choppy for me.
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October Sugar SBV5
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It looks like sugar might have an adjustment coming after all.
Since the market is technically bullish, I won't sell, but I think
we'll see a dip to the 1090 support area.
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"Tom's Trades" for Friday, October 7, 2005
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Tonight Waylon Jennings gets the duty with a glass of Zin Alley Port. Yummy. Be sure to
read tonight's update completely. There are some changes and modifications of note.
Stay tuned there are more to come as the old dog is wading thru the manual of some
new tricks.
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=114-09 HI=114-16 LO=113-29 CL=114-04
The day opened with a run north from -08 right to -16 and a failure. We sold 114-13. We
went straight to -03 and bounced back stopping me at -05 for 8 ticks, $250. From there I
sold -07 as the bounce from -03 ran out of gas at -08. We exited this one at -31 for another
8, $250. I bought one at 114-03 and was stopped at B/E. Ended the day for me.
The close at 114-04 has us locked onto the same 114-16 and 114-00 as the opening plays
tomorrow.
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2: MARCH 06 EURODOLLAR
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EDH6 O=95.480 HI=95.500 LO=95.465 CL=95.470
Not yet. Watching.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=8468 HI=8497 LO=8444 CL=8480
We shot lower, I tried to sell 8465, no dice. Tomorrow I'll trade 8500 but only selling a
failed retest with a stop at 8507. The target is 8352 area. Protect strongly ay 5475, 50,
25 and 8400. Yeah, 8375 as well.
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4: DECEMBER SWISS FRANC
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SFZ5 O=7842 HI=7942 LO=7841 CL=7930
I big updraft today as the US Dollar was hammerd. Gapped well beyond our 7800 number.
** NOTE: The currencies have been significant under performers for some time now. I'm
in the midst of a major rethink on the currencies. Stay tuned as we try to make some
adjustments in how we attack these markets.
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=647.50 HI=651.80 LO=634.90 CL=642.20
I openbed the day with a buy at 647.50 which I exited at 649.70 for $220.
The full array from TT for tomorrow. I sold 646.60 and exited at 645.60 on the "once
broken" application at 645. Eeked out $100. Next I bought 647.40 and got out at 646.70
dropping $70. I took a break and came back just before 10 when a 646 alarm brought
me back. I bought 647.40 and bailed at 650.60 for $320.
I cheated, I couldn't resist the failure up near 652. I sold 650.00, not one of our numbers,
I made a trade from the intraday. In a way I wish I'd have been whacked so I could make
a big deal of reaffirming what I have been preaching about just executing while the market
is trading. Bad cop, no donut. I thought about just keeping my mouth shut and not telling
you I did it ... but that ain't the style around these parts. We'll talk more about this later.
I got out at 649.00 for $100. It wasn't worth it. I took a risk off a non number ... it was
dumb. I took another break and returned to find us at 648 and change. I sold 646.70 and
got stopped at 648.10 dropping $140. Sold 646.70 and caught a nice flyer. Out at 642.10
on a "once broken" play with $460. I closed shop for the day. It made a further run to the
downside which we couldn't have traded anyway because our numbers were not involved.
The Russell then made a big recovery move jamming back up to 644. Again none of our
numbers were involved so we wouldn't have aprticipated in any case.
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6: DECEMBER GOLD
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GCZ5 O=469.30 HI=475.90 LO=469.00 CL=475.00
Were we not in a no buy zone I would have bought 471.50 or so today. Might have made
some. The confirm was there. Just watched it.
$10 channel tomorrow if it shows us a sell.
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7: DECEMBER COTTON
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CTZ5 O=53.75 HI=54.70 LO=53.35 CL=53.75
I bought 54.05 and exited at 54.50 after the failure at 54.70. Then we sold 54.40 and
bailed at 54.00 on the failure at 53.80. We picked up 95 points for $475.
We'll play 'em all tomorrow 54.50, 54.00 and 53.50.
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8: DECEMBER COCOA
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COZ5 O=1380 HI=1408 LO=1378 CL=1392
Just watched 1413 and 1380 will be in play tomorrow.
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9: DECEMBER CORN
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CZ5 O=2.05 HI=2.05 1/2 LO=2.03 3/4 CL=2.04 1/4
Watching and waiting.
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10: DECEMBER WHEAT
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WZ5 O=3.43 HI=3.46 1/2 LO=3.40 1/2 CL=3.45 1/4
We came within a half cent of the target ... just 1 prob ... no entry.
Sell a failed retest of 3.48 tomorrow. Buy a failed test of 3.40 and sell a break of 3.40.
Penny and a quarter stop. One is the gaol of the other. The sell of the breaking of 3.40
has 3. 34 as a target.
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