Erich's Update for Friday, October 28, 2005
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Market Update for Friday, October 28, 2005
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No Tom's Trades Tonight.
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1: CURRENCIES
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December Australian Dollar ADZ5
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The AD headed a little higher today, but I'm still on the lookout for a pullback/stall so that we can safely enter the market. Maybe next week.
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December British Pound BPZ5
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That's interesting, rates rallied today while RSI fell off - definite divergence (at least for the short term). I'd still like to see some new resistance before we look to buy.
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December Canadian Dollar CDZ5
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The first sign of resistance in the CD today. With a bit of luck the market will pullback slightly over the next few sessions so that we can buy at a better rate.
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December EuroFX ECZ5
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RSI gave us a definite sell signal in the EC today, even though rates rallied. I'm standing aside to see if the market follows suit tomorrow.
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December Japanese Yen JYZ5
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I usually don't like to get into a currency trade before the weekend, but everything still looks in sync for the sellign the Yen tomorrow.
*SELL December Japanese Yen at 8667
*Stop 8703
*Approximate Risk Exposure: $450 per contract
*Profit Target: 8553
*Approximate Profit Potential: $1425 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Mexican Peso MPZ5
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Still nothing too exciting happening in the Peso. I'll continue to watch tomorrow.
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December Swiss Franc SFZ5
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Like the other currencies we're following, the SF's RSI fell off today and broke the trendline, but rates rallied slightly. This divergence makes me think we'll see a decline tomorrow.
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December US Dollar Index DXZ5
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The USD barely gapped our entry this morning, so you might have scrubbed the trade as a result. If you did take the trade and are currently short you might want to bring exit stops above the 8905 intraday resistance for tomorrow.
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2: ENERGIES
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December Unleaded Gas HUZ5
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We didn't stand a chance in the gas market today as the huge range broke support only long enough to find our order. The resulting whipsaw hit us for just over a $500 loss. Ouch! And it looked so good on paper.
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December Heating Oil HOZ5
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Heating Oil dipped slightly today and RSI followed suit, but after the gas fiasco I think I'll let it ride until next week.
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January Crude Oil CLF6
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Not a good day in Crude either as the market broke support and then promptly stalled. The only good news is that we took our lumps early. Nothing new here tomorrow.
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3: FINANCIALS/INDICES
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September (06) Eurodollar EDU6
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I'm not having a lot of luck today as the ED avoided our sell by a measly 0.005 point. It would have been nice to sell the high, but I'll just wait for tomorrow. Maybe we'll see the ED wait one more day for us.
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December mini-DOW YMZ5
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We caught a nice move in the Dow today. Kind of makes up a bit for the crummy energy trades - at least a little bit. We've got a little over $375 in profit as of the close so you'll want to take steps to protect that. Notice the low of the day? Yep, right where the market rallied from a mere week ago.
At the very least you'll want stops at breakeven. Alternatively there is pretty good intraday resistance at 10275 which you could place a stop above. Of course no one says you can't make your stop tighter still.
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December mini-NAS NQZ5
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The NAS did follow the Dow lower, as we knew it would, but the setup wasn't right to sell. Now the market is at significant support again, so a break lower will confirm the downtrend and a bounce could put us back into bull territory.
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December mini-S&P ESZ5
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Surprisingly enough the S&P's decline today was the most subdued of the bunch, which is a little unusual for this market. Here too you'll want to bring your exit stops at least to breakeven for tomorrow's session. Alternatively you could use intraday resistance as tight as the 1182.50 line.
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4: GRAINS
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December Corn CZ5
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Corn continues to inch lower. Not a quick moving market by any stretch, but at least it's moving. You could bring exit stops a few ticks above today's high if you wanted to protect a bit of money.
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December Oats OZ5
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Oats made a wild stab lower, but flinched as they got close to the 158 support. The higher close makes it look like they might rally again tomorrow, but I'm just watching.
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November Rice RRX5
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Rice reacted to support today, but the small day doesn't convince me that the trend is ready to reverse - yet. Another higher session will get us closer to buying territory, but I might just watch for tomorrow.
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December Soybean Meal SMZ5
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Soy meal didn't do anything today, so I'll run the same trade as yesterday.
*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
OR
*BUY December Soy Meal at 172.3
*Stop 169.7
*Approximate Risk Exposure: $260 per contract
*Profit Target: 181.3
*Approximate Profit Potential: $900 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Soybean Oil BOZ5
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Even bean oil continues to flounder at the 2340 support line. Man, we really need to find a market to trade with some trend behind it!
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January Soybean SF6
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Still waiting for the big bean market to signal something, anything...but so far, nothing.
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December Wheat WZ5
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Wheat is looking like it might enter a pullback phase tomorrow, which would be good news because we might actually be able to do something with this market.
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5: MEATS
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November Feeder Cattle FCX5
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If you haven't moved those stops yet, you'll want them relatively tight going into tomorrow's session. I'd recommend placing them above today's high.
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December Live Cattle LCZ5
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I dunno what to tell you. This market continues to alternate bullish days for bearish ones. It's beginning to look a lot like sugar with bigger ranges.
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December Lean Hogs LHZ5
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Sold hogs today on a break of obvious support. I hate to say it, but the best place for stops is where they are: 6015. If you can't stand that you could put them above 5980.
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6: METALS
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December Copper HGZ5
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Copper's finally at a testpoint, and while I'm pretty sure we'll see a rally tomorrow, the fact that prices seem to top out as they near 185 doesn't give us much profit potential.
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December Gold GCZ5
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A mediocre day in gold today. I still think gold's a good buy, but people get antsy paying this much for the stuff. Standing aside for tomorrow.
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December Silver SIZ5
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If silver was trading a little lower, say near the 780 support, I'd sell the life out of it tomorrow. As it is, today's setback and corresponding hook in RSI might be nothing more than a hiccup.
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7: SOFTS
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December Cocoa CCZ5
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Yes, I'm biting my nails too, but right now there's not enough room to do too much with the stops. You can put them below today's low if that makes you feel any better.
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December Coffee KCZ5
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Tomorrow is likely to be an important day in coffee as the market tests important support at the 100 area. You could leave the trade as is, or tighten the numbers in anticipation of a bounce.
*BUY December Coffee at 102.65
*Stop 101.45
*Approximate Risk Exposure: $450 per contract
*Profit Target: 106.45
*Approximate Profit Potential: $1425 per contract
*RRR: 3:1
*Degree of Risk: HIGH
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December Cotton CTZ5
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Cotton continued sharply lower today. I guess it was a good thing we took our lumps early yesterday. Even when we're wrong about market direction, support and resistance still works to keep our losses as small as possible.
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November OJ OJX5
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We didn't get another retracement day, but the market did stay below the 118 resistance, so we can use this level to buy the market long tomorrow. It's Friday though, so I'll give the market a little more room on the entry side.
*BUY January OJ at 118.658
*Stop 117.35
*Approximate Risk Exposure: $195 per contract
*Profit Target: 124.85
*Approximate Profit Potential: $930 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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March Sugar SBH6
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Sugar fell off a bit today which is fine with me. I'll run the buy order again tomorrow, but if we see another lower day then I'll consider bracketing the trade.
*Buy March Sugar at 1203
*Stop 1183
*Approximate Risk Exposure: $224 per contract
*Profit Target: 1293
*Approximate Profit Potential: $1008 per contract
*RRR: 4 1/2:1
*Degree of Risk: Moderate to HIGH
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