Erich and Tom's Updates for Wednesday, November 16, 2005

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Market Update for Wednesday, November 16, 2005
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"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
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1: CURRENCIES
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December Australian Dollar ADZ5
It looks like it was a good thing our entry got gapped yesterday as today the AD made a quickie reversal. Look for a rally and test of the 7400 area before we could get another bounce.

December British Pound BPZ5
Nice move lower by the Pound today as we get closer to the 172.50 support. We're almost certain to see a bounce from here. Who knows, we might even look at a buy.

December Canadian Dollar CDZ5
The CD showed some support today, but don't let the market fool you, it is in a downtrend and as soon as things settle down a bit we should look to sell again.

December EuroFX ECZ5
Slight stall in the EC today as well. If you are still short this market from the other week you'll want stops above today's highs.

December Japanese Yen JYZ5
Good ole Yen, I knew I could count on this one to continue lower today. Too bad it gapped our entry yesterday.

December Mexican Peso MPZ5
The Peso continued higher today on a rather strong session. Bring stops at least to breakeven for tomorrow and below today's low if you like.

December Swiss Franc SFZ5
Nuts...we can't catch a break with this market. Today the Swissy fell off but the market closed so high we still can't do anything with our stops.

December US Dollar Index DXZ5
And the USD is equally as depressing a situation as the market rallied today, but again the closing price doesn't give us any flexibility in stop adjustment for tomorrow.

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2: ENERGIES
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January Unleaded Gas HUF6
Caught a nice breakout in Gas today. The *ideal* stop placement is still 154.65, but I'm not too crazy about still risking $400+, besides we're up over $500 as of the close so bring your stops at least to breakeven for tomorrow!

January Heating Oil HOF6
Oh baby, oh baby! What a great day in heating oil today as we got even a cleaner fill than with gas! Exit stops have to come at least to breakeven for tomorrow, but we're up about $1000 as of the close. I don't know about you, but I'd hate to give that back!

There's intermediate resistance at 177.50 that you could use to hide your stops, but don't be shy about making them tighter still. And make sure you've got a profit order working too.

January Crude Oil CLF6
As suspected crude wasn't nearly the day the other two energy markets gave us. Nothing new here tomorrow.

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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
Our ED trade doesn't look to good right now as the 9500 support is holding for the time being. If you took the *safer* trade then you're still flat, but you'll want to run it tomorrow as we're at an RSI test.

December miniDOW YMZ5
No real surprise here as a weaker day was inevitable. With a bit of luck we'll see a bit of a pullback follow for the rest of the week.

December miniNAS NQZ5
The NAS continues to be the most agressive of the minidices giving us a rather substantial pullback today. Note the support on the low...I'd love to see a couple more days like this, just so we can buy in at a better price.

December miniS&P ESZ5
Ditto for the S&P.

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4: GRAINS
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December Corn CZ5
What's this? Is corn becoming more active again? RSI gave us a good hook today so it's probably *safe* to sell today's low tomorrow, but the problem is, where is the market going?

I might hold off until we get closer to the contract low.

December Oats OZ5
Oats continue to hold the triangle formation and continue to trade without trend. I'll just keep watching.

January Rice RRF6
Rice broke the trendline support today, firmly planting the market into a technical downtrend. More important than that however is where the market made its low today: 750. Did you notice all the support here? This is a pretty strong level. I'll look to sell a break here tomorrow and cover on the other side.

*SELL January Rice at 747.5
*Stop 755.5
*Approximate Risk Exposure: $160 per contract
*Profit Target: 716.5
*Approximate Profit Potential: $620 per contract
*RRR: 3 1/2:1
*Degree of Risk: Moderate to HIGH

December Soybean Meal SMZ5
Soy meal is still holding up on resistance. I want to buy this market but I'm a little nervous about the current condition. Let's see a pullback to 176...then we'll talk.

December Soybean Oil BOZ5
I'm still looking to sell bean oil, but how can I with all that support at 2220?

January Soybean SF6
Evil bean market continues to poke away at support. I like the upside potential, but I'm not quite ready to buy yet. Please don't run away in the meantime.

December Wheat WZ5
In hindsight we could have made this trade a whole lot tighter! No matter, we got a fill near the dying minutes of the day, which can be a good sign sometimes. We'll know tomorrow.

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5: MEATS
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January Feeder Cattle FCF6
You've got to give Feeders an 'A' for effort. After a kick in the teeth at the end of last week the market is recovered almost to its previous point. Therefore if we get a break above the contract high, I might be persuaded to buy.

*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 are definitely looking more bullish again; however here too we've still got the contract highs to consider when placing buy orders.

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6: METALS
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December Copper HGZ5
Wow, I didn't think copper would be able to sustain this run as long as it has. Still on hold for tomorrow.

December Gold GCZ5
Gold continues to be stuck in a sideways channel so I'll consider a trade for tomorrow. I'll just be looking to buy at the moment because of the heavy support at 765 766 which could ruin our sell trade, but if the market declines tomorrow I'll add a short position.

*BUY December Gold at 471.7
*Stop 468.7
*Approximate Risk Exposure: $300 per contract
*Profit Target: 480.7
*Approximate Profit Potential: $900 per contract
*RRR: 3:1
*Degree of Risk: HIGH

December Silver SIZ5
We got stopped out of silver today with a small profit but it might have been unfortunate since the market quickly recovered off the 770 support and traded higher for the rest of the session. I'm on hold for tomorrow, but we could see another buy here soon.

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7: SOFTS
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December Cocoa CCZ5
Cocoa's holding the support line and getting quite oversold. This could translate into a rally in the short term, but I'll continue to run the sell tomorrow.

*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
Holey Moley! What a couple of days in coffee! I'm cautious about this market at the best of times...forget it now!

December Cotton CTZ5
Isn't that just like cotton? We gave the market some elbow room, but it wasn't enough. Today prices continued lower. #@%&!

January OJ OJF6
OJ's getting close to the 118 support line which could be a buy if we see a bounce here tomorrow.

March Sugar SBH6
Yep...that's sugar all right. I've got to regain my touch in this market. I used to be able to nail it...but not recently I'm afraid.

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"Tom's Trades" for Wednesday, November 16, 2005
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1: DECEMBER 30 YEAR T BOND
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USDZ5 O=113 HI=202 LO=104 CL=130

We started the day selling 11114. We made it down to 04 where I rolled the stop to 07 which was hit almost immediately. Out with 7, $218. I bought 09 and was sstopped out at B/E just before it took off higher again. Given the entry at 09 I might have over managed this one and it cost me. I bought 11121 and exited at 11131 for $312. I sold 11128 and was stopped at 31 giving back 3, $93.

Th eclose at 11130 puts us on 11200 and 11116 for tomorrow.

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2: MARCH 06 EURODOLLAR
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EDH6 O=.165 HI=.185 LO=.150 CL=.175

We bought 95.150 with a stop at 95.145. We closed at 95.175. Let's see where they take us. First stop on the journey should be 95.200.

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3: DECEMBER CANADIAN DOLLAR
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CDZ5 O=87 HI=00 LO=57 CL=90

It did our numbers but too late and in reverse. We hit 8360 early on and climbed back to 40.

All the weekend TT numbers again tomorrow. We'll add a roll at 8360 as well.

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4: DECEMBER SWISS FRANC
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SFZ5 O=11 HI=39 LO=75 CL=12

Nothing today until very late, too late, in the day. I'll stick with my weekend numbers but they're looking very unlikely.

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5: DECEMBER MINI RUSSELL 2000
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ERTZ5 O=6.80 HI=7.20 LO=6.10 CL=7.30

We began with a sell at 664.60 and exited at 662.30 over running our "once broken" stop at 882.10. We still managed to capture $230. I tried to buy 660 something after the turn around at 660.30 but couldn't get it. I bought 662.40 and exited at 661.70 losing $70. I sold 661.50 and exited at .70 losing $20. I then sold 661.70 and exited at 9:24 CDT. I exited this one at 660.20 on an "OB" play for $150. I then bought 660.60 and exited 662.80 for $220. It then traded sideways for an hour or so.

I finally bought 662.50 about 10:25 CDT and exited at 664.80 after 665 failed to hold for $230. I bought 666.40 and exited at 665.90 dropping $50. I then sold 664.60 and exited at 665.50 losing $90. Next we bought 666.40. I tried to exit at 665.90 but they caught me in a down draft. I exited at 665.40 losing $100. We then sold 664.80 and exited at 658.40 for $640. I called it quits with $1230.

All the numbers tomorrow

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6: DECEMBER GOLD
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GCZ5 O=9.00 HI=0.80 LO=7.70 CL=9.00

Nothing for us today. 460 and the $10 channel tomorrow.

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7: DECEMBER COTTON
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CTZ5 O=.05 HI=.05 LO=.26 CL=.28

I sold 50.90 and exited at 50.35 for 55 points, $275. All the same TT numbers for tomorrow.

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8: MARCH COCOA
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COH6 O=60 HI=77 LO=46 CL=51

We sat on our hands today. Tomorrow I will buy a break above 1380 or sell a retest there which fails. I will also buy a retest of 1350 as it turns back higher. I want a fill below 1355 but may not get that. !359 I will live with as a max entry.

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9: DECEMBER CORN
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CZ5 O=1.97 3/4 HI=1.98 1/2 LO=1.95 1/2 CL=1.95 3/4

Still an observer.

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10: DECEMBER WHEAT
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WZ5 O=3.13 1/2 HI=3.16 LO=3.06 CL=3.07

I' a temp onserver for the moment. I did not like the cloe at all. A big failure.