Traders Helping Traders Big Weekend Edition
 

Traders Helping Traders E-zine for March 2nd, 2008

 

Erich and Rob's
Forex Videos are here!

Click for info

 

Shooting the Breeze!


Last week we got back home from our vacation in Cuba and the jet lag is still killing me! Normally the time zone changes don't bother me (so much) but this one's been really tough to shake. Come 2:00 in the afternoon and I'm ready for a nap! I've been trying to take it easy since we arrived Wednesday so I'm starting to feel a little more alert, but it's just funny how long it's taking to adjust.

Part of the problem is probably due to the stress we experienced during our stay in Cuba. We heard a lot of nice things about the country and were "Mexico-ed out" so we decided to vacation in Cuba for a change of pace. Big mistake. This was, without a doubt, the worst vacation I've ever been on. In fact, I've never been so happy to get on the plane back home in my life. What does that tell you about our time there?

To be fair, the hotel was new, clean and the water pressure is much better than Mexico. The pool and the beaches were both nice (but it wasn't the beach shown in the brochure) but that's where the positives end. The biggest turn off about Cuba was the people. When you go do Mexico the Mexicans treat you like a guest in their home, but the Cubans treat you like an intruder. I've never met such a rude bunch of people in my life. In fact the rudeness of the staff was only surpassed by that of the other tourists!

I can count on one hand the number of people I saw smile while I was there. There were a couple of people that were exceptional, but what's two out of several thousand? And after comparing notes with folks back home it seems that the Cuban attitude is the norm rather than the exception.

To make matters worse the hotels services were far below standard. We knew that there would be a few glitches because the hotel was new, and we were prepared for that, but this was supposed to be a 4 1/2 star hotel, and it didn't even come close to other resorts we've stayed at of this calibre. The food (and I use the term loosely) was terrible. I have no idea how you can overcook green peas to the point that they become like powder!

Thank goodness that the breads were decent. We pretty much lived on bread and cheese for much of our stay! We couldn't tolerate the food for the second week and ended up taxing into town in search of a decent restaurant. Unfortunately it was a $30+ round trip cab fare, so we dropped a chunk of cash on taxi's our second week.

There were other annoyances like a lopsided exchange, hidden fees and incredibly long lines for service which I won't bore you with. Suffice it to say, if you're an American, you're not missing much not going to Cuba. In fact, I'm joining your ranks and crossing Cuba off my destination list. Next time I go to spend a whack of cash in someone's country their going to be happy I'm there... or at the very least they'll pretend to be happy to see me.

Enjoy this week's issue,

Erich
erich@tradershelpingtraders.net
 

Currencies


Currencies Overview

To see the video clip covering this week's Currencies trades, click the link below:
http://www.supportandresistance.com/Trade-Updates/CurrenciesMarch3.wmv

Currencies Market Overview

The Currencies were out of control last week. The US Dollar continued its downward spiral and this catapulted foreign currencies higher. The Euro and Swiss Franc posted some of the largest gains, with the Yen and Aussie Dollar not too far behind. Now that these markets have picked a direction we need to be on the lookout for our chance to get in.

As tempting as it is to blindly buy into the market, the fact that it is moving so quickly tells us that momentum might be drying up, and therefore we need to wait for resistance to form before we get serious about trading. Once we have resistance, then we have the upper limit defined, and know where we can enter the next rally from.

Mexican Peso

If the March Mexican Peso opens at or below 93500:
BUY March Mexican Peso at 93775 (stop)(day)
If filled: Exit Stop: 92950 (stop)(GTC)
Approximate Risk: $412 per contract
Profit Target: 94325 (limit)(GTC)
Approximate Profit: $275 per contract
Degree of Risk: Moderate

peso chart

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Financials / Indices


Financials/Indices Overview

As you might expect, the Bond market posted some pretty dramatic gains toward the end of last week with the decline in the US Dollar. Long Term it looks as though the Bonds will continue to rally if rates can get above last week's highs. As support and resistance traders we're on the lookout for a break above the highs followed by resistance. Once we have the break/resistance combo we will be in good shape to buy the market higher on the next push. Until then however we need to exercise patience.

The Stock Market is a tough call as the indices are intermingled with our moving average lines. We use the moving averages to give us a directional bias, but when they're all twisted and mixed with the price bars, then we've got a sideways market and we need to stand aside; however, right now a lower market does look likely.

FLAT Financials and Indices

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Grains


Grains Overview

I'm kicking myself around the block for passing on Canola last Friday. Did you notice the market put in resistance, followed by support on Wednesday/Thursday? I did, but I never thought the market would run away on us like this on Friday! It isn't that often we see a $600 range in Canola, but that's what we got. I should have known, given the huge ranges in the rest of the complex, but now we're on hold until the next signal.

Wheat and Beans are both nuts right now and on the back burner for the foreseeable future. Bean Oil could be tradable if the market ever shows us resistance. It's interesting to note that Bean Oil's RSI is sitting at 100% overbought. If that doesn't bring about resistance for this week I don't know what will!

Aside from Canola, Corn's the only other market we might dare to trade. Be careful though! It wasn't that long ago we saw a limit move in Corn and as you know limit moves can be extremely dangerous to your financial health!

FLAT Grain Complex

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Meats


Meats Overview

To see the video clip covering this week's Meats trades, click the link below:
http://www.supportandresistance.com/Trade-Updates/MeatsMarch3.wmv

Feeders treated us nice last week as prices fell off to our profit target before the weekend. Long term it looks as though prices will continue lower still, so we'll keep on the lookout for another selling opportunity. Chances are we won't have to wait too long.

Live Cattle's chart is not nearly as neat and tidy as Feeders, but they are likely to follow Feeder's lead so I'm looking short here as well. The daily Live Cattle chart is a bit of a mess as prices and moving average lines are all intermingled. While this is usually a sign of a trendless market, the 30 minute intraday chart is hinting to a change in overall market direction.

Lean hogs also gave us a sell signal on Friday but the big problem here is that prices have moved a great distance without any kind of pullback move. The markets need pullbacks to flush out the profit takers and give renewed momentum to the market.

Feeder Cattle

COMPLETION of Short March Feeder Cattle from 104.87 (February 28)
Stopped: 104.07 Approximate Profit: $400 per contract

Live Cattle

If April Live Cattle opens at or above 9415
SELL April Live Cattle at 9410 (stop)(day)
If filled: Exit Stop: 9497 (stop)(GTC)
Approximate Risk: $350 per contract
Profit Target: 9352 (limit)(GTC)
Approximate Profit: $230 per contract
Degree of Risk: Moderate to HIGH

live cattle

Lean Hogs

If April Lean Hogs open at or above 5960
SELL April Lean Hogs at 5952 (stop)(day)
If filled: Exit Stop: 6062 (stop)(GTC)
Approximate Risk: $440 per contract
Profit Target: 5855 (limit)(GTC)
Approximate Profit: $390 per contract
Degree of Risk: Moderate to HIGH

lean hogs

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Metals


Metals Market Overview

With all the trouble the US Dollar is having staying afloat, trading the metal markets should be the equivalent of shooting fish in a barrel. While higher prices are likely across the board, the biggest problems here are the enormous ranges. I would really like to see things tighten up, even for one session, which would help us frame our trade a little more reasonably. Until then I'm going to keep watching.

FLAT Metal Complex

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Softs


Softs Overview

To see the video clip covering this week's Softs trades, click the link below:
http://www.supportandresistance.com/Trade-Updates/SoftsMarch3.wmv

I guess everyone's gone a little insane the last week. Cocoa prices are through the roof as are Coffee's and Cotton. OJ's making killer whipsaw ranges which are characteristic of OJ of old. The OJ market had been behaving itself pretty well until now, but it seems it can't contain itself any longer. We do have a selling opportunity this week but we might have to cut some corners to make it work. Sugar might give us a buy later this week but first we need to see the market reinforce current resistance.

OJ

If May OJ opens at or above 128.00
SELL May OJ at 127.05 (stop)(day)
If filled: Exit Stop: 131.05 (stop)(GTC)
Approximate Risk: $600 per contract
Profit Target: 124.40 (limit)(GTC)
Approximate Profit: $397 per contract
Degree of Risk: Moderate to HIGH

oj chart

The charts in this publication are all made using Gecko's Track 'n Trade charting software. You can get a demo for free here.

Pick of the Letter


Pick #3 - SELL May OJ

A very tricky trade as we have divergence in the daily and weekly charts. For this reason I put the entry a little further away, in an attempt to keep us out of a possible whipsaw trade. We'll see how price respond on Monday. We might have to reverse our position if support returns.

Pick #2 - SELL April Live Cattle

I'm borrowing a bit from the Feeder market to justify shorting a market which is technically in an uptrend. I'm not going to press the trade too hard however, just in case they change their mind about following Feeder's lower.

Pick #1 - BUY March Mexican Peso

I love it when the daily and weekly charts sync up, which is what we have in the Peso right now. Better still, if the market shows support on Monday we can tighten the trade parameters for an even better trade.
 

Lesson du Jour


To see the video clip covering this week's Lesson, click the link below:
http://www.supportandresistance.com/Trade-Updates/LessonMarch3.wmv

Got a question that needs answering like an itch you can't scratch? Send it along to Erich@tradershelpingtraders.net and I'll be happy to try and clear things up for you.
 

Homework


None this week!
 

Futures Trading is Risky! Never trade with money you cannot afford to lose!


Nothing in this publication is either a solicitation to trade or a recommendation of any strategy. Always consult your broker or advisor before attempting any trade. Commodity trading involves substantial risk of loss.

THE DATA CONTAINED HERE IN ARE BELIEVED TO BE RELIABLE BUT CANNOT BE GUARANTEED AS TO RELIABILITY, ACCURACY OR COMPLETENESS; AND AS SUCH ARE SUBJECT TO CHANGE WITHOUT NOTICE. TRADERS HELPING TRADERS AND IT'S ASSOCIATES WILL NOT BE RESPONSIBLE FOR ANYTHING WHICH MAY RESULT FROM RELIANCE ON THIS DATA OR THE OPINIONS EXPRESSED HEREIN.

DISCLOSURE OF RISK: THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS CAN BE SUBSTANTIAL; THEREFORE, ONLY GENUINE RISK FUNDS SHOULD BE USED. FUTURES AND OPTIONS MAY NOT BE SUITABLE INVESTMENTS FOR ALL INDIVIDUALS, AND INDIVIDUALS SHOULD CAREFULLY CONSIDER THEIR FINANCIAL CONDITION IN DECIDING WHETHER TO TRADE. OPTION TRADERS SHOULD BE AWARE THAT THE EXERCISE OF A LONG OPTION WOULD RESULT IN A FUTURES POSITION.

NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO, ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM, IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS, IN GENERAL, OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
 

Traders Helping Traders Publications, including this one, are all copyright Traders Helping Traders, all rights reserved.
You may not re-distribute this publication without the permission of the owners.

 - http://www.supportandresistance.com/ - 

10 - 6078 Truesdale Street
Duncan, BC  V9L 0B4
(250)748-9242 (Pacific Time Zone)