Erich and Tom's Updates for Tuesday, November 1, 2005
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Market Update for Tuesday, November 1, 2005
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Scroll down about halfway for Tom's Trades. Subscribers got these last night, test drivers get theirs after the fact.
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"Some men give up their designs when they have almost reached the goal; while others, on the contrary, obtain a victory by exerting, at the last moment, more vigorous efforts than ever before." - Herodotus
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1: CURRENCIES
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December Australian Dollar ADZ5
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Sold the AD today, but didn't get the breakout I was hoping for. The lack of downward momentum has me a bit concerned for tomorrow. You could bring stops in above today's high if you wanted, or leave them at 7503.
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December British Pound BPZ5
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RSI moved higher today while rates headed lower...not exactly the combination I was hoping for. We'll probably see a rally tomorrow, but I'll wait for confirmation before trying another buy.
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December Canadian Dollar CDZ5
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The CD was a little more cooperative today as we sold the market on the break of the 8490 support. Rates did take a stab at our stops before the close, but couldn't rally that high. You can leave stops where they are for tomorrow, or bring them just above 8500.
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December EuroFX ECZ5
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Big move lower in the ED today. It looks like we might get another chance to sell from 119.50 when/if rates test support in that area the next few days.
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December Japanese Yen JYZ5
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Arrrrgh! [I feel like Charlie Brown] We had the Yen nailed but it slipped past us by gapping our entry this morning. Nuts...have to sit and watch tomorrow.
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December Mexican Peso MPZ5
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Looks like the Peso will challenge the resistance at the top of the trading range at 92.500. Right now the trend doesn't seem that strong so I'd expect another bounce.
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December Swiss Franc SFZ5
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The Swissy also moved lower today but doesn't look quite as bearish as the other currencies. We'll see what happens tomorrow.
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December US Dollar Index DXZ5
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The USD rallied a bit today but we're still below the significant resistance at 90.00. Once we get closer/over here, then we'll look at putting on a buy.
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2: ENERGIES
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December Unleaded Gas HUZ5
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Very peculiar day in Gas today. Big opening gap and tiny range (it's not a limit move). That's not like Gas at all! I think I'll steer clear tomorrow, but lower prices would be my pick.
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December Heating Oil HOZ5
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I was hedging between Heating Oil and Crude and in hindsight I should have done both! What a day! Unfortunately we have to stand aside for tomorrow.
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January Crude Oil CLF6
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Crude nicely filled our short order today and even gave us a bit of room to move our stops. We have a few options here, either keep stops where they are, bring them to breakeven, or use the resistance at 6100, which is halfway.
First stop is 5910.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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Sold the ED today, but the upward angle in RSI has me a bit concerned about tomorrow. You might want to bring exit stops in a bit, either above today's high, or above 9520.
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December mini-DOW YMZ5
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The Dow gave us a beautiful reaction off the 10500 resistance today. Notice the low closing price? That's a good sign that the market will continue lower tomorrow. RSI is also at a testpoint which adds strength to this resistance.
*SELL December mini-Dow at 10397
*Stop 10453
*Approximate Risk Exposure: $285 per contract
*Profit Target: 10203
*Approximate Profit Potential: $960 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December mini-NAS NQZ5
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The NAS did follow the Dow lower today, in fact this market is looking particularly bullish for tomorrow. While the minidices usually move together, I'm going to hold off on selling the NAS until we get a confirmation.
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December mini-S&P ESZ5
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The S&P is falling right between the Dow and the NAS today, trading higher, but also against an RSI test and resistance at 1215. I'm not sure if we'll see a reversal here tomorrow, but I will consider selling a break of today's low.
*SELL December mini-S&P at 1196.50
*Stop 1203.50
*Approximate Risk Exposure: $350 per contract
*Profit Target: 1147.50
*Approximate Profit Potential: $2450 per contract
*RRR: 7:1
*Degree of Risk: Moderate to HIGH
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4: GRAINS
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December Corn CZ5
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Corn continues its slow downward slide. You can bring your stops in above today's high to protect a little more profit if you like.
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December Oats OZ5
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Oats continued lower today, and while I want to sell the market the darn 157 - 158 line is getting in the way. I'll hold off tomorrow, maybe the market will give us a reaction and allow us to tighten up the trade.
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November Rice RRX5
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Rice remained coy today, but that's okay. I'd rather the market made a bigger breakout when it was finally ready to do so and all this time in the channel is like winding a spring.
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December Soybean Meal SMZ5
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Soy meal made a weak attempt at finding our short today, but came up short. I'll run the trade again tomorrow, but would hope to see a move soon.
*SELL December Soy Meal at 167.9
*Stop 170.3
*Approximate Risk Exposure: $240 per contract
*Profit Target: 160.3
*Approximate Profit Potential: $760 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Soybean Oil BOZ5
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Bean Oil made a bigger move to the downside today, but not too worry, if prices continue lower we should be able to sell off the 2220 line.
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January Soybean SF6
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Smallish day in beans today. This is rather uncharacteristic for this market which normally has some pretty big day-to-day ranges.
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December Wheat WZ5
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Slight hesitation in Wheat today as prices reacted to the contract low. This is good as it shows us strength in the support line. I'd like to press my luck and give it another day before selling, but I'll run a just-in-case order tomorrow.
*SELL December Wheat at 313 3/4
*Stop 317 1/4
*Approximate Risk Exposure: $175 per contract
*Profit Target: 301 3/4
*Approximate Profit Potential: $600 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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5: MEATS
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January Feeder Cattle FCF6
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And that is why we didn't buy Feeders today. Did you notice where the market made a high? Pretty darn close to the resistance at the contract high, wasn't it?
This resistance so close to the 115.00 level allows us to take a tight trade if the market should break the contract highs tomorrow. I won't wait too long to exit if I'm wrong however, and will get out the other side of 114.75.
*BUY January Feeder Cattle at 115.25
*Stop 114.62
*Approximate Risk Exposure: $312 per contract
*Profit Target: 118.67 (projected)
*Approximate Profit Potential: $1712 per contract
*RRR: 5:1
*Degree of Risk: HIGH
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December Live Cattle LCZ5
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We have a similar setup in Cattle today, after a wicked whipsaw type of day! It looks like the market should be heading lower tomorrow, but if we get a reversal and a break of the contract highs I'll look to buy.
*BUY December Live Cattle at 9262
*Stop 9175
*Approximate Risk Exposure: $340 per contract
*Profit Target: 9537
*Approximate Profit Potential: $1110 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH
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December Lean Hogs LHZ5
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Hogs continued higher today, but there's not much to buy the market at right now. We need to wait for it to show us resistance first.
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6: METALS
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December Copper HGZ5
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Copper's looking like it's heading lower tomorrow as we got a tiny break of the RSI trendline. The market is still technically in a uptrend and there's resistance at 179, so I'll hold off selling right now.
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December Gold GCZ5
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Big reversal for gold today as the US Dollar rallied. Gold is at an important support level right now so a bounce/break will determine the future direction of this market for the short term.
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December Silver SIZ5
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I guess I should have sold silver afterall! Wow, what a drop today! We'll keep a lookout for the next selling opportunity.
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7: SOFTS
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December Cocoa CCZ5
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Cocoa made a nice drop to 1350's support today. I'd like to sell the market tomorrow, but we've got more support at 1300. If we drop off to here then I'll try to put a trade together.
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December Coffee KCZ5
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Coffee continued to fall off today. I do expect prices to find support very soon and maybe even continue with the uptrend. Right now the market is giving us very mixed signals about its direction.
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December Cotton CTZ5
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Cotton looked a little more bearish today. Dare we wait one more day to see if we can sell from a better price?
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November OJ OJX5
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OJ struggled to get higher today. We can bring our exit stops just below the low and the 118.00 line for tomorrow. You can bring your stops to breakeven if you like, but that might prove to be a touch too tight.
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March Sugar SBH6
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My frustration with sugar continues to build as the market gapped our entry today and voided our short trade. Sugar has a tendency to chop, so maybe we'll get another chance in a day or two...but I'm not holding my breath.
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"Tom's Trades" for Friday, November 1, 2005
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Take note, we have an FOMC Meeting tomorrow. It is strongly likely we'll see another .25 basis point hike in the discount rate. I will be done trading Bonds, Russell and all currencies by 10 am PST. You should be too. There is no reason to try and catch falling knives. We do our best work when markets are most normal.
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=1-21 HI=2-08 LO=1-18 CL=1-31
We began the day buying 111-21 which I exited at -28 for 7 ticks, $218. I bought -03 and stopped out at -06 for 3 more, $93. Not great, not bad.
Tomorrow we get after 111-16 and 112-00.
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2: MARCH 06 EURODOLLAR
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EDH6 O=.260 HI=.280 LO=.250 CL=.265
We got a small green one today. I'll look in again on Wednesday.
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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=04 HI=39 LO=60 CL=69
We sold 8497 and exited at 8489 for $120. I sold 8496 a bit later. We made it down to 8465 and I rolled my stop to 8473. They filled us at 8475 for $210. The subsequent failure at 8480 was pretty juicy but I didn't have it on the list.
We'll go with the 3 TT numbers again tomorrow. If we get a failure at 8480 I'll sell it. No buy, though.
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4: DECEMBER SWISS FRANC
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SFZ5 O=49 HI=58 LO=71 CL=96
We slipped below 7820 about an hour before our trading window opened. SF went to 7771 and bounced. That was just above another number of ours at 7760. The result was we got skunked on the day.
Same TT numbers for tomorrow
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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=5.50 HI=0.80 LO=5.50 CL=9.20
I bought 642.50 and held my breath. We'd already done about a 4 + point move. I exited at 645.20 for $270 as it looked to me like the move had found some opposition. I then sold 644.60 and exited at 645.10 losing $50. I bought 645.40 and made it out at 649.40 for $400. I sold 646.80 and exited at 646.90 losing $10. I sold 646.60 and exited at 645.20 $140. It started getting real choppy and I felt like I'd lost touch so I took a break. It was just as hard to get a handle on when I came back about 1:00 pm CST so I closed up shop. with my $750.
All the numbers tomorrow
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6: DECEMBER GOLD
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GCZ5 O=.00 HI=4.30 LO=6.50 CL=6.90
I came real close to selling 468something late in the day but chickened out 'cause of the late hour. $10 channel tomorrow.
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7: DECEMBER COTTON
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CTZ5 O=.00 HI=.10 LO=.10 CL=.23
I sold 52.40 and exited at 51.85 for 55 points, $275. I sold 51.90 and exited at 51.65 for 25 ticks, $125. We'll go again tomorrow with the same array of numbers from TT.
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8: DECEMBER COCOA
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COZ5 O=67 HI=72 LO=49 CL=351
I sold 1367 and exited at 1354 for $130. Be ready to go early at 1350. Same TT numbers for tomorrow.
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9: DECEMBER CORN
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CZ5 O=1.96 3/4 HI=1.97 LO=1.96 CL=1.96 1/4
Watching only. I'm starting to watch July, Sept and Dec 06 calls. I don't see anything yet that floats my boat. It may take some considerable time before I do. I will keep you posted.
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10: DECEMBER WHEAT
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WZ5 O=3.18 HI=3.29 1/2 LO=3.16 CL=3.17
I bought 3.18 1/2 and exited at 3.17 1/4 for a loss of $62. I'll do it again tomorrow.
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