Erich and Tom's Updates for Friday, November 18, 2005
Market Update for Friday, November 18, 2005
FYI - Just a reminder that this weekend I'm heading to Mexico for our daughter's wedding, and while I will have my laptop with me the updates might be a little spotty. If I am unable to keep in touch with you we will extend your subscription to make up for the "down time". -Erich
1: CURRENCIES
December Australian Dollar ADZ5
Nothing interesting in the AD today as rates rebounded a bit and traded higher. Still looking for a chance to sell though.
December British Pound BPZ5
If the Pound wasn't so oversold I would look to sell it below yesterday's breakout, but since it is I'll wait for it to reset before selling.
December Canadian Dollar CDZ5
Looks like the support held and rates rallied instead. That's all right though, we'll get another chance to sell the market soon, just not tomorrow.
December EuroFX ECZ5
The EC rallied today as well. It looks like we might be in for a pullback move over the next few days.
December Japanese Yen JYZ5
A little hiccup in the Yen today. Like the other currencies I'd be looking for rates to normalize a bit before trying to sell again.
December Mexican Peso MPZ5
Not a very good return for all our hard work with the Peso as the market stopped us out with about $75 in profit today. Nothing new here tomorrow.
December Swiss Franc SFZ5
The SF stopped us out at breakeven today as the market reversed from the downtrend. At least it didn't cost us anything.
December US Dollar Index DXZ5
As you might expect the USD reversed on our long position today and took us out at breakeven as well. Nothing new here tomorrow.
2: ENERGIES
January Unleaded Gas HUF6
Gas showed us another hit on support today, and with the low closing price it might be a good sell below here tomorrow. I'll be busy packing, but you could short 151.00 and cover above 151.30.
January Heating Oil HOF6
A rather bearish day in heating oil, but not nearly as nice a setup as what we are seeing in gas. I think I'll hold off here too.
January Crude Oil CLF6
Crude may have tipped its hand to us today as the market broke the current support. While the market is still relatively oversold, I would consider selling a break below today's low and covering at/near 5750.
3: FINANCIALS/INDICES
September (06) Eurodollar EDU6
Hmmm...two days in a row that the ED has rallied, that's unusual for this market. I would hope to see a reaction to the 9523 - 9524 resistance tomorrow as this could get us back into selling territory.
December mini-DOW YMZ5
Not much of a pullback out of the Dow today as prices closed rather strong. I want to buy this market again, but I just don't think that this is the right time.
December mini-NAS NQZ5
The NAS caught me watching again as rates made an incredible rally today. I don't care though as it was too risky a trade to try. Hopefully we'll see things normalize a bit and give us another chance.
December mini-S&P ESZ5
The S&P is still holding the middle ground, not as aggressive as the NAS but more aggressive than the Dow. Here too I'd like to see things settle down a bit, but we might not get that chance.
4: GRAINS
December Corn CZ5
Got filled on a very smallish day in corn today. You can leave your stops where they are, or bring them above 194 to take a little risk out of the trade for tomorrow.
December Oats OZ5
Oats look like they might finally be ready to go somewhere tomorrow as RSI broke the downtrend line today. We're also trading back at the strong resistance at 169 and we've got nearby support at 166 to help keep risk small.
*BUY December Oats at 169 3/4
*Stop 166 3/4
*Approximate Risk Exposure: $150 per contract
*Profit Target: 182 1/4
*Approximate Profit Potential: $625 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH
January Rice RRF6
If you brought your stops in above 750 you were likely stopped out today, but if you're holding at 755.5 then you're still in the trade. Today's session isn't too encouraging for tomorrow however. I'm keeping my fingers crossed.
December Soybean Meal SMZ5
And there's the hesitation we were worried about. This is why we didn't get too anxious to sell here today. This market is still very confused about where it wants to go.
December Soybean Oil BOZ5
Bean Oil continues to plug along. Nothing fancy but it is still heading lower. Nothing new here at the moment.
January Soybean SF6
Yesterday's support held up the bean market today. Like the rest of the soy complex the market is struggling for direction. We could see prices continue within a trading range.
December Wheat WZ5
Wheat continued low enough today that we can get our stops to breakeven for tomorrow. This has been a while coming, but it looks as though we might have caught a decent trade.
5: MEATS
January Feeder Cattle FCF6
The Cattle on Feed report seems to have put a wrench into the current trend. RSI hooked today so I'm confident we will see prices decline tomorrow. The report isn't released until the afternoon however, so there is still a HIGH degree of risk.
*SELL January Feeder Cattle at 113.37
*Stop 113.82
*Approximate Risk Exposure: $225 per contract
*Profit Target: 110.17
*Approximate Profit Potential: $1600 per contract
*RRR: 7:1
*Degree of Risk: HIGH
December Live Cattle LCZ5
Cattle are looking bearish as well; however here we've got definite support at 9000 which is making me hold off selling tomorrow.
December Lean Hogs LHZ5
Good fill in our hog short today as the market fell right from the open. Bring your stops at least to breakeven for tomorrow and remember to adjust your risk/reward on the way down.
6: METALS
December Copper HGZ5
Unbelievable. I can't believe that copper is still pressing higher. We need to get a safer signal before we try to buy it again.
December Gold GCZ5
Okay, now I'm really choked about getting gapped yesterday.
December Silver SIZ5
And now I'm really choked about the market making a "hunting-for-stops" range Tuesday.
7: SOFTS
December Cocoa CCZ5
Cocoa's getting closer to making a move, and the support's still holding, so I'll continue to run the sell order.
*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: HIGH
December Coffee KCZ5
Coffee is getting closer to another sell as well, but you wouldn't know it from today's session. That's okay though, the support line is holding which tells us we're working the right numbers.
*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 gave us a reaction to our support level today. We could look to sell the support, but I'd really like to see one more day before we get into it. You should also flip to the March chart as this one's due to expire.
January OJ OJF6
I guess OJ might not be quite ready to rally yet. The lower RSI goes the more likely prices will pick up the trend again. Keep watching tomorrow.
March Sugar SBH6
Finally sugar slowed down! Look for one more day like this and then we'd better get serious about running a buy order.
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"Tom's Trades" for Friday, November 18, 2005
1: DECEMBER 30 YEAR T BOND
USDZ5 O=2-23 HI=3-10 LO=2-13 CL=3-00
We began buying 112-20. Bonds moved easily up to 113-01 at which point my stop rolled to 112-31. We were booted out there for $343. I then bought 113-03 as some juice came back into the market. Not enough to produce anything consequential however, We're out at 113-06 as we rolled our stop to -07 on the move to -10. We made 3, $93.
The close at 113-00 has us looking for either the buy or sell off this number with fills expected at 113-03 on the buy and no worse than 112-28 on the sell.
2: MARCH 06 EURODOLLAR
EDH6 O=.215 HI=.255 LO=.195 CL=.245
We are long from 95.150. They gave us further progress today. The stop is now at 95.235 which theoretically locks in profits of $ 225. 95.250 is going to be problematic. There is enough structure there to cause us issues before we get the break we're looking for. Be diligent in managing this trade. I'll ride tomorrow for most of the day. If the stop survives I will have to make a decision before end of day whether to keep this trade alive over the weekend. I doubt I will unless .250 gets taken out with some gusto and I have enough room to roll the stop to 95.275 and still have better than a 1 point gap to play with. That means that if it looks like we'll close the day between .250 and .275 I will bprobably take the profits. If it looks likely we'll close over .28 I'll likely keep it over the weekend with the stop at .275.
3: DECEMBER CANADIAN DOLLAR
CDZ5 O=85 HI=45 LO=79 CL=35
We opened the day buying 8405 on the 8400 break higher. I exited at 19 as it stalled just above 20 for $140. I sold 8438 on the failure at 8440 and exited at 32 as it bounced back after breaking 30 picking $60.
All the weekend TT numbers again tomorrow. We'll add 8360 to the mix. Obviously the close at 8436 makes an 8440 play the most likely.
4: DECEMBER SWISS FRANC
SFZ5 O=65 HI=24 LO=48 CL=15
Nothing. We can still do the 7625 level either way and the failed retest I mentioned yesterday at 7680 as being OK to sell is amended to a retest of 7675. We can also buy a retest below 7670 all the way down to 7650. Wherever withing that 20 window it turns and heads higher is fair game.
I'll stick with my weekend numbers also but they're looking very unlikely.
5: DECEMBER MINI RUSSELL 2000
ERTZ5 O=6.90 HI=8.70 LO=6.10 CL=8.10
I missed the buy off 658 as the window opened for us. I bought 660.50 for the first trade and exited at 661.60 for $110. I bought 660.50 after missing the slide from 662 to 659. I exited this trade at 661.60 also for another $110. I sold at 661.40. It started getting real choppy so I just took 660.70 and bailed out picking up $70. We made another push breaking 660and again bounced rather strongly. I bought 660.50 and exited at 661.70 for $120. A very disappointing trade since we'd touched 663 and this was the best my management could get me. Next up I bought 662.50 I outwitted myself on this one. I should have been out of the trade at 663.90/80 but instead exited at 662.90 for $40. Atleast it wasn't a loss. I missed the last move to 668. $450 for the day. I'll take it but not a real gratifying day.
All the numbers tomorrow
6: DECEMBER GOLD
GCZ5 O=3.00 HI=7.80 LO=0.50 CL=6.90
Another powerful show by Gold leaping into the 480/490 channel. I can't trade up here anyway. I was, however, very tempted to declare the move lower just after the open as a confirmation and buy. I didn't. $10 channel tomorrow with the 479.10 close.
7: DECEMBER COTTON
CTZ5 O=.20 HI=.20 LO=.30 CL=.79
I couldn't get in at the open to buy the break above 49.50. I sold 49.95, survived a press on my stop at 07 to pick up $150. I'm done trading December Cotton. FND is next Tuesday and the volume has follen off to nothinh the Dec. I'll sit out tomorrow and pick up guidance on the Marc in the Big weekend Edition.
8: MARCH COCOA
COH6 O=61 HI=67 LO=49 CL=54
I let it go for the day. I was just too busy in other markets to try and figure this one out. Same TT and Update numbers tomorrow.
9: DECEMBER CORN
CZ5 O=1.92 1/4 HI=1.92 3/4 LO=1.91 3/4 CL=1.92 1/4
You just knew it was gonna' be like this ... Nothing. There were a lot of "the bottoms in" traders that got clobbered the past 3 days.
10: DECEMBER WHEAT
WZ5 O=3.07 1/2 HI=3.08 LO=3.03 3/4 CL=3.04 3/4
3.10 is still the number. Until that happens, I'm an observer with real warm hands.
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