THT Trade Update for Wednesday, July 26, 2006

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Market Update for Wednesday, July 26, 2006
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1: CURRENCIES
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September Australian Dollar ADU6
Oh-oh. Big gap 'n fade day in the Aussie today doesn't look good for our short (if you're still short) tomorrow. Leave stops below today's low and keep your fingers crossed!

September British Pound BPU6
I'd like to see the Pound dip further still and test the 183. 35 support zone. We'll have to see what the market gives us tomorrow.

September Canadian Dollar CDU6
I would expect the CD to rally a little more and test the 8825 resistance tomorrow. I don't know if that will be enough to turn this market lower again but we might consider a sell from here if we get the test.

September EuroFX ECU6
We got gapped two days in a row here, but we definitely had the right idea. Too bad, this one was a money maker!

September Japanese Yen JYU6
We got filled in our Yen short trade today. If you can stand the risk leave the stops where they are for one more day; otherwise you could bring them in above today's open, but I'd resist going much tighter than that.

September Mexican Peso MPU6
Nothing's really changed for the Peso setup and we can continue with the trade as is.

*BUY September Mexican Peso at 91.925
*Exit Stop: 91.250
*Approximate Risk: $337 per contract
*Profit Target: 93.975
*Potential Profit: $1025 per contract
*RRR: 3:1
*Degree of Risk: HIGH

September Swiss Franc SFU6
And of course we're still watching with the Swiss Franc trade as well. Got the direction bang on, but the gaps are brutal.

September US Dollar Index DXU6
I was humming and hawing about buying the USD and I guess I should have as we got a very nice move higher today. Next time.
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2: ENERGIES
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September Unleaded Gas HUU6
Looks like Unleaded might give us that RSI test after all. On hold for tomorrow, but I'd be looking for support to show itself.

September Heating Oil HOU6
Whew! I think this is the closest an energy market has ever come to whipsawing us in a channel trade! What a day! Running the same trade tomorrow, but RSI broke to the downside so that's my preference. A very HIGH risk trade no matter how you slice it.

*BUY September Heating Oil at 206.05
*Exit Stop: 203.15
*Approximate Risk: $1218 per contract
*Profit Target: 215.95
*Potential Profit: $4158 per contract
*RRR: 3:1
*Degree of Risk: HIGH

OR

*SELL September Heating Oil at 199.40
*Exit Stop: 202.10
*Approximate Risk: $1134 per contract
*Profit Target: 190.55
*Potential Profit: $3717 per contract
*RRR: 3:1
*Degree of Risk: HIGH

September Crude Oil CLU6
That was a close to a whipsawed trade as I dare get! Crude made the daily highs during the night session, but did manage a poke higher shortly after the open. Fortunately for us the resistance held and our order wasn't filled. Taking the day off tomorrow.
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3: FINANCIALS/INDICES
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March (07) Eurodollar EDH7
I thought about shorting the ED tomorrow but it's another day where the market diverged and traded lower while RSI flipped higher.

September mini-DOW YMU6
The Dow is testing scattered but strong resistance in the 11175 area today. I think this will turn the market tomorrow; however I'll wait for the reaction before getting too anxious to sell.

September mini-NAS NQU6
The NAS also has its hands full at the 1500 line. Let's wait and see if it turns.

September mini-S&P ESU6
The S&P was the most aggressive of the three. The resistance here is much looser, but based on the other two we might get a reaction here as well.
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4: GRAINS
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September Corn CU6
It's not the best setup because of the strong support at 227, which is likely to give us problems on the way down; however the market is in pullback mode and the trend is picking up so we could look at shorting nearby support.

*SELL September Corn at 237 1/4
*Exit Stop: 242 1/4
*Approximate Risk: $250 per contract
*Profit Target: 221 3/4
*Potential Profit: $775 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH

September Oats OU6
Oats are still too lost to consider trading. We'll wait until they pick a direction and then go with them.

November Rice RRX6
We got the RSI hook today which looks very promising for our buy position tomorrow. The trend isn't as strong as I would have liked, but at least DMI is looking bullish.

*BUY November Rough Rice at 975.5
*Exit Stop: 965.5
*Approximate Risk: $200 per contract
*Profit Target: 1034.5
*Potential Profit: $1180 per contract
*RRR: 5 1/2:1
*Degree of Risk: Moderate

September Soybean Meal SMU6
No surprise we got an RSI test today as prices found resistance at 172. Coincidence? I think not! I'll set up to short on a break through the 168 support. You could try to sell today's low and cover above the high, but why be greedy?

*SELL September Soy Meal at 168.3
*Exit Stop: 172.3
*Approximate Risk: $400 per contract
*Profit Target: 155.3
*Potential Profit: $1300 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH

September Soybean Oil BOU6
Still holding out for the RSI testpoint. If we get another day like today we should get it no problem.

September Soybean SU6
The Big Bean market actually looks to be the most aggressive of the three. I'll stand aside for now since we're in a downtrend and should be selling, not buying.

July Wheat WN6
Wheat continued to chop around a bit. We got a move lower today, but I have to admit that the weak trend is giving me pause. I don't want to be in a choppy market if I can help it.
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5: MEATS
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August Feeder Cattle FCQ6
The 112.75 support line held and as promised I'll sell my brains out tomorrow. The only "problem" is that the trend has lost all momentum, so I hope we don't see a half-hearted stab lower. I'll place my entry a touch further to stay safe.

*SELL August Feeder Cattle at 112.62
*Exit Stop: 113.45
*Approximate Risk: $412 per contract
*Profit Target: 109.05
*Potential Profit: $1787 per contract
*RRR: 4:1
*Degree of Risk: Moderate to HIGH

August Live Cattle LCQ6
Same idea for Live Cattle. You could sell the October contract if you choose, but August isn't too bad yet. I'm looking to short below yesterday's low as this is where the market has shown us support by trading higher today. Besides, it's also where the trendline's at.

*SELL August Live Cattle at 8177
*Exit Stop: 8282
*Approximate Risk: $420 per contract
*Profit Target: 7852
*Potential Profit: $1300 per contract
*RRR: 3:1
*Degree of Risk: Moderate to HIGH

August Lean Hogs LHQ6
Don't you hate that? We had the market short then it cleared us out with a big range only to fall off again.
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6: METALS
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September Copper HGU6
Too bad our limit trade didn't work out because we nailed this one! Copper found our first profit target today. Still on hold for tomorrow.

August Gold GCQ6
A bullish reaction; however the market is still technically in a downtrend so I'm sitting on my hands.

September Silver SIU6
Got the rally we were looking for but we also got RSI divergence as it dipped. Better wait and see.
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7: SOFTS
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September Cocoa CCU6
I knew it was too good to be true. Cocoa's up to something, but I can't put my finger on it - yet.

September Coffee KCU6
Coffee showed us some support today. I "could" sell the support tomorrow, but I'll wait.

December Cotton CTZ6
A reaction off the 62% line... but can we trust it? I don't know yet.

September OJ OJU6
OJ continued higher today which still has me a touch baffled. RSI is dipping so that's not a good thing, but the trend is in tack so it might not affect it that much. The contract highs look like formidable resistance, but this is OJ so anything can happen.

October Sugar SBV6
And sugar there goes sugar lower after doing the whipsaw dance yesterday. At least it only got us at breakeven.