Erich and Tom's Updates for Thursday, November 17, 2005
Market Update for Thursday, November 17, 2005
Before-the-Market Trade Picks from 2 different viewpoints in the Currencies, Energies, Financials, Indices, Grains, Meats, Metals and Softs. Day Trades and Position Trades!
"I am fully aware that of the millions of people who speculate in the markets, few people spend full time involved in the art of speculation. Yet, as far as I'm concerned it is a full time job - perhaps even more than a job. Perhaps it is a vocation, where many are called but few are singled out for success." - Jesse Livermore
1: CURRENCIES
December Australian Dollar ADZ5
The AD was a little more subdued today and might be ready to head lower tomorrow; however that's just a hunch, we don't have enough here to propose a trade - yet.
December British Pound BPZ5
Well we knew 172.50 was important, but I didn't think we'd gap right by it! If we get a smallish session tomorrow I'll look to sell again before the weekend, otherwise we could be on hold a while.
December Canadian Dollar CDZ5
A good setup in the CD as the market continues to reinforce support. We could see a bounce, but the trend is down, so I'm looking to sell.
*SELL December Canadian Dollar at 8347
*Stop 8381
*Approximate Risk Exposure: $340 per contract
*Profit Target: 8217
*Approximate Profit Potential: $1300 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
December EuroFX ECZ5
Another smallish day in the EC which is strange given the Pound's bigger move (these markets usually move closely together). I thought about selling the low; however it'd be a crap shoot so I won't.
December Japanese Yen JYZ5
I know I've been griping about this all week, but it really is a shame the market gapped our short order in this market as it continues to fall off nicely. Still looking for another chance to sell.
December Mexican Peso MPZ5
You should still be long this market, but just barely as the Peso made a big reversal today. If you haven't done so already bring stops to breakeven or just below today's low.
December Swiss Franc SFZ5
We caught a break as the Swiss Franc fell off enough today that we can move our stops to breakeven. The *ideal* placement is still the original; however I'm not comfortable having $400 at risk with such a crummy closing price.
December US Dollar Index DXZ5
And the USD cut us some slack today as well by clearing our entry enough that we can the trade to breakeven (if you choose). Alternatively you should consider snuggling the stops under the 9200 line for tomorrow. RSI is extremely overbought and a hiccup looks likely.
2: ENERGIES
January Unleaded Gas HUF6
If you tightened your stops you would have been taken out of the trade no worse than breakeven today as gas prices rallied. It'll be a couple of days before we can put on another trade here.
January Heating Oil HOF6
And that is exactly why I said we need to bring stops in tight for today as heating oil took away all of yesterday's gains! Hopefully you walked with a tidy sum after today's reversal. We'll probably be on the sidelines for a day or two.
January Crude Oil CLF6
Crude lead the way today giving us a bounce off support. Don't let the low of the day fool you, the support was 5750.
3: FINANCIALS/INDICES
September (06) Eurodollar EDU6
I should have stuck to Plan 'A' and sold the 9500 line. I knew it was safer, but I got a little anxious. This is what I get for being anxious - a $200 smack in the wallet!
December mini-DOW YMZ5
The Dow is beginning its pullback phase. Hopefully we will see a bit of dip here which would make it easier to buy the market long.
December mini-NAS NQZ5
The NAS is still looking aggressive today in spite of the extremely overbought RSI. In all the time I've been following this indicator I don't think I've ever seen it reach these levels!
December mini-S&P ESZ5
The S&P is somewhere between the pulling back Dow and the aggressive NAS. I'd like to see a pullback, it makes sense and would give us a chance to buy.
4: GRAINS
December Corn CZ5
Okay Corn, I'll bite. Today's bearish session is encouraging for tomorrow; however don't be surprised if the market puts on the brakes again. We've got to look a long way to the next long term support to get a reasonable profit target.
*SELL December Corn at 191 3/4
*Stop 196 3/4
*Approximate Risk Exposure: $225 per contract
*Profit Target: 175 1/4
*Approximate Profit Potential: $825 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH
December Oats OZ5
Oats continue to hold the triangle formation and continue to trade without trend. I'll just keep watching.
January Rice RRF6
Good fill in rice today as prices broke our 750 support line. There's not a lot of room to adjust stops yet so you might leave them where they are if you're comfortable with that. Otherwise bring them just above 750...but not too tight!
December Soybean Meal SMZ5
Wow! The bottom fell out of Soy Meal today and I thought about selling the market short tomorrow; however we've got serious support at the low and then again at 170 and 167.
December Soybean Oil BOZ5
We should at least get a temporary reaction to the heavy support at 2220 before prices are likely to continue lower.
January Soybean SF6
Beans ran away alright...but the wrong way! Like soy meal, I want to sell tomorrow, but the next support is too close and a bounce is certainly possible.
December Wheat WZ5
Wheat continued lower today, and while it's still too early to get the trade to breakeven, we can bring stops in above today's high if you like.
5: MEATS
January Feeder Cattle FCF6
Still running the buy order for Feeders but I'm not sure the market has enough left in it. We might see a third test of the contract highs, which could give us a substantial selling opportunity.
*BUY January Feeder Cattle at 115.37
*Stop 114.87
*Approximate Risk Exposure: $250 per contract
*Profit Target: 117.65
*Approximate Profit Potential: $1150 per contract
*RRR: 4 1/2:1
*Degree of Risk: HIGH
December Live Cattle LCZ5
Cattle are hugging the trendline beautifully, but we're still too close to the nasty contract high to get serious about a buy.
December Lean Hogs LHZ5
Hogs gave us a totally different look today as the market reversed on yesterday's gains. This back 'n forth is a sign of indecision and possibly a big breakout when it comes. Given that the market is slightly overbought I might entertain a sell. If prices rally we should still be able to get a trade off the contract highs.
*SELL December Lean Hogs at 6265
*Stop 6320
*Approximate Risk Exposure: $220 per contract
*Profit Target: 6005
*Approximate Profit Potential: $1040 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
6: METALS
December Copper HGZ5
Copper struggled unsuccessfully to take out yesterday's high. This is our first clue that a reversal is due tomorrow. I'm just watching.
December Gold GCZ5
Don't you just hate gaps like this? We had this market pegged only to get gapped today. Nuts.
December Silver SIZ5
Proof that yesterday was nothing more than a "clear the table" day. The next time we see silver clean house like this I'm going to bracket the trade for the *real* rally.
7: SOFTS
December Cocoa CCZ5
Cocoa's holding on but it doesn't look too impressive right now. We'll run the trade again tomorrow in case the market picks up steam.
*SELL December Cocoa at 1337
*Stop 1357
*Approximate Risk Exposure: $200 per contract
*Profit Target: 1237
*Approximate Profit Potential: $1000 per contract
*RRR: 5:1
*Degree of Risk: Moderate to HIGH
December Coffee KCZ5
Coffee gave us a slight hesitation today, and since we might not get another chance, I'll look to sell a break of yesterday's low. Stops are on the other side of 9550's resistance. It's a tight trade to say the least.
*SELL December Coffee at 9485
*Stop 9565
*Approximate Risk Exposure: $300 per contract
*Profit Target: 9010
*Approximate Profit Potential: $1781 per contract
*RRR: 5 1/2:1
*Degree of Risk: HIGH
December Cotton CTZ5
Cotton would have found our first profit target today if prices weren't so choppy in between. Still watching for tomorrow.
January OJ OJF6
OJ's confirmed support today, and all looks well; however I'm going to wait for the break of 125 before buying long.
March Sugar SBH6
I haven't seen sugar rally like this for quite some time. I want to buy it long, no question; however we can't do it from here. Did you notice the size of the bars decreasing? The market's running out of steam.
"Tom's Trades" for Wednesday, November 16, 2005
My trading day was shortened today by a followup visit to my surgeon. I stopped trading at 10:30 my time. I will attempt to comment on what happened after I left so we have some continuity but understand I did nothing real after that time.
1: DECEMBER 30 YEAR T BOND
We began the day buying 112-03. We made a quick run to -09, we were stopped out at -07 for $125. I bought -04 later in the day. We proceeded to -24/-25 with minimal effort. I exited at -21 for $531.
2: MARCH 06 EURODOLLAR
EDH6 O.185 HI.225 LO.175 CL.215
A nice reward day for our patience in letting structure mature a bit. .225 is now the next resistance to deal with. If we can get thru there tomorrow I'll cinch up the stop to .215, today's close. We now have $150 of paper profits. We'll be resistant to giving much of that back. If we can make it thru .250 I'll snug the stop up to .235. We have a little gap between .325 and .340. I'd be overjoyed to see that puppy closed.
3: DECEMBER CANADIAN DOLLAR
CDZ5 O=92 HI=13 LO=60 CL=90
I bought 8364 as the CD failed at 8360 for the second day in a row. Yes, your point is well taken ... I did NOT call a buy there in the Update or TT. It was too obvious to ignore. I exited at 8404 for $400. It looks like we'd have sold the break of 8400 about 8396 or so. We'd probably been stopped out of this one near 8410 giving back about $140. Looks like we'd have sold 8396 or so again. This one avoided the stop and fianlly turned lower. We should have exited the trade around 8388/90 getting back $60 or so of the loss on the 2nd trade.
All the weekend TT numbers again tomorrow. We'll add 8360 to the mix.
4: DECEMBER SWISS FRANC
SFZ5 O=19 HI=26 LO=50 CL=77
Another down day with no structure. I'll buy a break back above 7625. I think we can sell a failed retest there as well. It's not powerful but it is doable. We can also now sell a failed retest at 7680
I'll stick with my weekend numbers also but they're looking very unlikely.
5: DECEMBER MINI RUSSELL 2000
ERTZ5 O=7.20 HI=9.50 LO=0.30 CL=7.10
We began selling 657.50 off the 658 break. Russell punched thru 654 and then bounced off 653. I exited at 654.10 using our "OB" play for $340. We then bought 651.50 off the failure and turn at 651. I exited at 655.90 as it failed at 656 ... one of our numbers. Out with $440. Next we sold 654.50 off the 656 break lower. I exited this one at 653.20 for $130. We had $910 and the Dr. appt was approaching so I closed down for the day. Looks to me like there were 2 more trade possibilities that we could have done. If we'd been successful in our typical management you should have taken another 3-400 home.
All the numbers tomorrow
6: DECEMBER GOLD
GCZ5 O=3.70 HI=9.40 LO=3.50 CL=9.10
Nothing for us today. A sizable gap up shut us down for the day.
$10 channel tomorrow with the 479.10 close.
7: DECEMBER COTTON
CTZ5 O=.20 HI=.20 LO=.30 CL=.79
We sold 49.95 and exited at 49.50 for $225
All the same TT numbers for tomorrow. We showed some strength at the close. Careful tomorrow on the open
8: MARCH COCOA
Didn't give us a shot until too close to end of day. 1350 is a strong focus tomorrow.
9: DECEMBER CORN
CZ5 O=1.96 HI=1.96 LO=1.92 1/4 CL=1.92 3/4
How'd you like THAT little snap back? Wicked, huh? Still an observer
10: DECEMBER WHEAT
WZ5 O=3.07 HI=3.08 1/2 LO=3.04 1/2 CL=3.06 3/4
3.10 is still the number. Until that happens, I'm an observer with real warm hands.
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