DAILY E-LETTERS
2/1-2/29
02/29/00
TIMING and DISCIPLINE are two major elements
involved in successful trading, so here are a few brief trading tips covering those
principals.
ACT, DON'T REACT- Place your order (at YOUR
designated price) and stop at the same time and WAIT. Let the market come to you.
WORK YOUR TRADE- Check for order immediately if your
price was touched. You probably won't be filled but you can either drop your price lower
(higher on sells) or "go to the market" if that was the "spike" you
were looking for.
DO NOT DOUBLE UP ON LOSERS- Sure the price
"looks" better and "if" the market comes back you have a lower BE
(break-even) point but most times you will end up losing TWICE as much as you originally
planned.
On to the TRADES.
SWISS and EURO- are the two major European currencies that may "rock and roll"
this week due to the ECB (European central Bank) meeting on Thursday to discuss a possible
rate hike (THEY swear they are NOT going to raise rates). With 72 hours until expiration
(waiting till this is a 48 hour trade may be better that's WED at 2:45) of the MARCH
OPTIONS. Prices are very LOW due to the lack of time value and various strategies can be
utilized. ONE is the SWISS STRANGLE BUY the 6100 CALL and the 6000 PUT for 40 points $500.
LIVE CATTLE-is not "burning the barn" with price movements but that has resulted
in "apathy" toward the option market. Looking FAR down the trading road and into
a "Seasonal" play I like the JUNE 72 CALL for 40 points $180. This is a BUY and
HOLD till the Memorial day barbeques (I said it was down the road).
02/28/00
Economic reports, Investor sentiment, and LP2K are the
hot topics for the week. Personal
Income and Consumption are due out this morning (PI up .4% and PC down .4%) with the
Consumer Confidence survey due tomorrow expected to see a 142.0 rating compared with 144.7
last month. Wed has the release of Purchasing Managers Index down .3 at 56.0 and Leading
Indicators (caused BIG moves last time) come out on Thurs. and are expected at .3% DOWN
.1% . Finally on Friday (seems like a ways off) Non farm payrolls (228,000 forecast verses
387,000 prev) and Factory orders -.6% a major change from last months +3.3% round out the
week. Tomorrow the little hyped Leap Year 2000 day comes into play (will computers
recognize the EXTRA day???) and we may see a SOFTENING of the Nasdaq and other Tech
stocks. On to the TRADES.
COPPER-took out fractals ALL day friday and seemed headed toward a test of 80.00 and today
, on the opening, this key support area has been touched. BUY the April 84.00 CALL for
less than 1.00 cent ($250) which has plenty of time left (one month minus 2 days).
CURRENCIES-options EXPIRE (mar) on FRIDAY and there are many good plays available in an
area which speculators abound. Just last night the SWISS Franc dropped 130 points and
rebounded today (look for more upward movement) and the Canadian Dollar has a short term
double-top that
needs SELLING.
SOY BEANS and SILVER- for those who are new to this E-Letter we mentioned a month ago
about the old-time relationship between these two and since that time they have continued
to move together. SILVER seems destined to test the market BELOW the $5.00 an ounce level
and until some more bullish fundamentals are released in the Grains the BEANS should
continue to weaken.
EXPIRING OPTIONS
SWISS, YEN, CD, AD, $, MARCH LIVE CATTLE and APRIL COCOA on FRIDAY.
02/25/00
Have received a few
inquiries as to some of the prices I give out for OPTIONS trades as not being attainable.
The basic answer to these questions is that I usually wait for the market to meet what I
feel is the proper premium for the trade I have selected. Sometime it take two or three
days to reach my entry point (that is why I suggest placing GTC {good till canceled}) and
often the trade is never activated. Also keep in mind the this is NOT Brain Surgery and
precise numbers can change during the course of the day. EXPORT SALES, GDP, and
Livestock slaughter reports are released today. On to the trades.
COFFEE-is on its way to 95.00 cents (at 103.15) and the April option has 2 weeks and the
97.50 PUT for .50 cents $187.50 could be a winner.
JYEN-has "dipped"below 9000 twice on the overnights and with such a significant
number of stops below there I find it hard to believe that a BOTTOM has formed. Friday's
are usually a SELL option day so look to SELL MARCH (one week to go) 9150 CALLS for 30
points ($375) or BUY the 8900 PUT for 18 ($225)
02/24/00
Tough to
"BUY and HOLD" some of these Stock Index's but those who have followed "the
GLASS" know I have stuck by my guns with LONG NASDAQ/SHORT DOW( check past trades on
the WEBSITE) and if you too are in this spread, while some days things look scary,
"life ain't bad". Though there are a multitude of speculated reasons for this
divergence the overwhelming factor is the rising "cost of business" for many of
the dow components, specifically OIL PRICES, which do not affect TECH stocks as much. Many
are concerned that the NASDAQ is TOO HIGH and it is TOO LATE to jump on the bandwagon.
Well that's what many said a 1000 points ago (only in Dec 99) when the Nasdaq hit 3000.
'NUFF SAID. On to the TRADES.
SOY BEANS-are slowly creeping down, not what I look for when I am preparing to BUY. Feel
the beans have to test 495 (or a tad below) before they are ready to launch their
sspring/summer rally. Two trades here (maybe) today. On a 0daytrade SELL Mar beans at 501
3/4 with a stop at 503 1/2 (risk 1 1/2 cents $75) with a profit objective of 495 1/4 $300.
IF 495 trades BUY the APRIL 510 CALL(which trades off of the MAY contract) for 7 cents and
TWO MAY 550 calls for 3 cents. This is the first step in assembling a BEAN portfolio.
GOLD-is not glittering this week but is not dead yet. Though the inflation card will not
be soon dealt, the overwhelming technical factors point toward a re-test of the Oct highs
at 340. BUY the 315 april CALL for $250.
SWISS FRANC-has been touted as a short here for a while but it triggered a fractal early
in the week signaling a strong upcoming upward move. It is a RETRACEMENT day and the SWISS
is down 70 points. BUY the MARCH 6250 call for 16-18 points (each point is $12.50) and
they expire in one week and one day.
02/23/00
As most of you
know I feel the BEST way to approach the volatile Futures market is
through the options, but not just buying a call (or put) and waiting 3 months for a move.
I prefer the shorter term (1-4 weeks) plays to attempt to capitalize on timing moves while
"risking" a minimal amount. By focusing on key report releases and technical
retracements, and BUYING options that are undervalued and modestly priced ($150-250) we
seek to take advantage of the periodic "spurts" that many commodities markets
experience each week. Of course, not all our recommendations "hit" but since we
risk a small amount on each option if we hit 1/3 or 2/5 we are making money, and that is
the essence of this game. On to the TRADES.
NATURAL GAS-is not often mentioned here due to its high volatility and point value ($100)
but when a potential winner is spotted I must report it. With TWO days left in the March
option a formidable "GAP" has been left up at the 262 area. The play is BUY TWO
260 MAR CALLS for .015 ($150) and look to SELL ONE future at 264 1/2 to both
"lock-in" a profit and hold both sides of the market. There is another option
strategy, the STRANGLE, where we spend the SAME amount only have one put and one call. For
the same $300 BUY a MAR 260 CALL and a 240 PUT (no future involved).
SUGAR-has hit and touched the 5.00 level for four days and before ANY upward movement
occurs STOPs must be taken out below the 495 area. On a 2-3 daytrade BUY MARCH at 486 with
a stop at 477 (risk $101).
MINI S&P- OPTION SELL STRATEGY with three weeks and two days till expiration (the
perfect time to sell) and the futures at 1350 SELL the 1250 PUT and the 1450 CALL for 20
(mini) points or $1000.
02/22/00
Main Question
is was Friday's "dip" due to profit taking before the holiday weekend or the
signaling of a Bear market? "Big Al's" comments are meant to slow down the
economy but there is a "catch 22". In order for economic slowdown's to occur
consumer's must spend LESS and until a 10-15% reduction in portfolio's is realized this
will not occur. Thus, in a nutshell, Greenspan says if everybody loses money over the next
quarter things will be fine. What a relief!!! On to the trades.
HEATING OIL/UNLEADED GAS-both have their March options expiring on Thursday and with an
API report due for release tonight expectations for 200-300 point ranges are not
unfounded. I believe we are in a retracement/cleanout period in the energies and that
short term PUTS are the play for this week. We gave out the LONG GAS/SHORT OIL spread last
week (working well!) and expect that trend to continue. (gas up 140 overnight OIL down
160).
COPPER-options expire on the 24th and while I am "stuck" with 86 calls I am
willing to
DOUBLE-UP on the 84 CALLS (march) for 50 points $125 looking for the breakout over the
8540 level and on to new HIGHS.
COCOA- has opened DOWN 9 in the March. Look for a test of the 790 area in MAY and BUY
especially with strength in the B-Pound today.
02/18/00
Short day for some
markets but that does not mean that wild things can't happen. Options expire in the GRAINS
and Stock Indexes. CPI is due at 8:30 est and COLD STORAGE report (affecting Pork bellies
and OJ) is released AFTER the markets close. Trade and Budget numbersare also released
today. On to the TRADES.
JYEN-as forecast is clearly on its way to the 9000 level where I expect a strong bounce.
When (IF?) the stops below are taken out the 9100 CALL should be going for 16 points $200
and with 2 weeks to go it should be a good speculatory move. For those not of the
"bounce theory school" the 8800 puts gop for $200 right now.
COCOA-up and down with the Bpound all week and the POUND is DOWN so lets look for a BUY
level in cocoa. 861 with a stop reverse at 854. I know this seems "tight and
precise" but that is what I see (could buy more april 800 calls on this dip).
GOLD-has been a mover and shaker the past few weeks and technicals point toward a re-test
of the OCT highs to form a potential double top. I like either the outright BUYING of
calls (strike 325 APRIL $280) or on a SPREAD BUY 315 call SELL 335 call for $200 with a
MAX out
of $2000.
02/17/00
REPORTS and SPEECHES and more REPORTS should
continue to make
this a very hectic week. NOTE: ALL markets are CLOSED on MONDAY and
there are numerous early closings on Friday which includes Currencies
(1:00 est) Grains,and Bonds Ny Metals and Energies as well. Softs
(cafe, sug, oj, etc) and the Stock Indexes are regular hours. FOUL
weather is forcast for most of the midwest and northeast so watch the
grain and energy markets (crude is down 70 on the overnight) On to the
TRADES:
DOW JONES-options proved to be the play yesterday and those who got
10,600 puts can BUY a future or BUY a now out-of-the-money 107 CALLS for
$200.
COCOA-is under the delivery pressure gun and with strength in the
B-pound an advance to 800 looks proboble. DAYTRADE wise I am BUYING 757
with a STOP at 748 and a profit objective of 789 (cocoa is $10 a point).
SOY BEANS-are a frustrating market but an excellent one to DAYTRADE when
the are moving. Ranges of 10-15 cents allow for a limited risk (I use 3
cent ($150) stops) with 3-4 times return. OPTIONS for MARCH expire on
Friday and the "floor" seems reluctant to move this market upward (THEY
sold too many CALLS) so look for a range between 505 and 515 using these
numbers as S&R.
02/16/00
The week continues (as it
usually does) with a specter of inflation hovering above the
market. PPI and "Big AL" will be the focus of traders tomorrow and position
reshuffling is expected to continue(Dow WAY up Nasdaq quite) Today's reports will mostly
affect the LUMBER market (Housing starts and building permits). On to the TRADES:
STOCK INDEXES-options expire on Friday and today (after the early morning market moves) is
the IDEAL time for the "little guy" to get involved in a normally volatile
future. In the DOW options within 100 points can be had for as little as $250 and mini
S&P's within 15 points.
GASOLINE/HEATING OIL-are both part of the unstoppable energy complex but with winter
waning and the OPEC meeting looming the GAS market is primed to "make up ground"
on heat and crude. LONG the JULY GAS at 79.00 and short JULY HEAT at 66.50. Look at
JULYUNLEADED GAS CALL SPREADS with a 8 cent differential for about $500.
COTTON-has played "games" the past two days with the popular MARCH option
expiring last Friday. Technical breakout to the 59.10 area on Monday is signaling an
upcoming BULL run and the pull back yesterday has given position traders an ideal entry
point using stops BELOW 55.00.
02/15/00
Ups and downs are
the ways of any market and we are getting are fill of roller coaster
action in quite a few areas. With the amount of pending reports this week (see monday
glass) and option expiration on Friday for the Indexes I am expecting more of the same.
With the increase of volatility it is wise to adjust your "normal" risk
parameters a bit. If you use a 15 point stop in Nasdaq look to increase it 33-50% on
daytrades.
GOLD-has more and more followers each day as evidence by the large ranges and
the extremely high premiums that the options command. Even though the PPI is
expected to be lower than last month, signaling a slow down in any
inflationary activity, it is hard to dismiss the $30 a barrel level in crude
(Gas in this town is over $1.50 a gal) and the future it is foretelling. I do
not think longer term investment in this market is a bad play since the
technicals are calling for a retest of the October highs at $340.
WHEAT-does not excite everybody as much as the notorious Soy Bean but
actually is stronger, from a technical standpoint. Many countries have
expanded their forecasts for consumption and will be forced to enter the
market as once weak prices rise. $3.00 a bushel is a fine target for those
long at 261 with a 2.54 stop. May option spreads are very affordable. BUYING the 290 MAY
CALL and SELL the 310 for 5 cents.
02/14/00
A wealth of economic reports will be released this week
(conveniently the Stock Index
OPTIONS expire on Friday) and "BIG AL" will make more comments. Today Business
Inventories are expected to be +.4% a decrease of .5% from last month, Tuesday Industrial
Production comes in at +.5% (+.1%) and Capacity Utilization 81.6% (+.3%), Wen are Housing
starts and Building permits(mixed), Thursday is the always tricky PPI (Producer Price
Index) expected at +.1% compared with .3% last month which would indicated a
NON-inflationary environment (that is what the NUMBERS say not ME) and Jobless claims
which should be 15,000 lower than last week's surprise number, and finally on Friday (to
go along with the options expiring options) The International Trade is unchanged (-26.5
Billion) CPI (Consumer Price Index) up .1% to .2% and the Treasury Budget will decrease
from $70.5 Billion to $55.0 bil) and that will be the week. On to the TRADES:
COCOA-touched NEW contract LOWS with 5 minutes to go on Friday and "bounced" 15
points by the close. If not for the extreme weakness in the B-Pound (there is a
relationship between the two) This market should have rallied to the 800 level especially
with First Notice Day Tues. I see a rally coming (which I will eventually be selling) and
feel the April 800 calls at 21 points $210 would be a good purchase.
JYEN-has recovered slightly in the overnight (up 35) but with the Dollar nipping at the
110.00 Y/$ level three times already I see a breakthrough which will result in the Yen at
9000 where it should sharply rebound on both technicals and Profit taking. There is quite
a bit of TIME left in the March options BUT for $500 (40 points) you should be able to get
the 9100 PUTS
SOY BEANS-suffered a "Misinterpretation" of some of its released Data on Friday(
the trade focused on the Brazilian weather instead of the increase of exports and decrease
of stocks) and slide a few cents. March options expire on Friday and I am still Bullish.
$125 for the 510 calls is a fine investment or BUY the 500 PUT and go long a contract near
(or below) that strike.
02/11/00
So how many of you were BUYING mini NASDAQ's at the 3960
level? I guess
enough to keep the low at 3973. ANY LONG below 4000 was a gimmie. Your welcome! send small
bills.
It is MULTI-OPTION expiration day (5 markets), Monthly AGRICULTURAL REPORT DAY, and
FRIDAY. So I can not comment or make recommendations on markets that will be affected.
Will be a midday ONEGLASS.
COPPER-is on it's upward move toward double top at 88.50 and we already own 86 calls.
02/10/00
Hackers reeking havoc is a partial reason for the slide
of the NASDAQ but it is really just an excuse to make a technical move. 2 key points on
the charts were dealt with 1) removing weak longs with stops below the 4000 level and 2)
filling of the GAP at 3960 which since accomplished has set the stage for continued UPWARD
movement. I don't want to be too bold but I feel a long position at these levels will be a
BIG winner in the long run.(hold till 5000???) Initial Jobless Claims are released today
and are expected to show an increase of 6,000 over last month. On to the TRADES.
CRUDE OIL-had reports from API( American Institute of Petroleum) and DOE (Dept. of Energy)
assist in fueling it's run to $30, only the charts say possible Head and Shoulders
formation could lead to a test of the 2675 bottom. Options for MARCH expire next
Wed.(after Tues' API) and a purchase of PUTS is what I am looking at. 29.00 should be
tested today and that might let us BUY the 28.00 PUTS for $200 or less.
SOY BEANS-have classic pennant forming narrow range and I expect beans to settle with-in
TWO CENTS of $5.00 (barring leakage) before tomorrow's Monthly Agricultural Report. I do
not like to GUESS about these Government numbers and it has become more of a battle
between "expectations verses reality", a game I only play with options, which
brings me to THE TRADE. BUY ONE 510 CALL (MAR) TWO 525 CALLS and ONE 490 PUT for 10 cents
($500). this type of order CAN be entered on ONE ticket as a combo spread.
COTTON-GOLD-SILVER-COFFEE-SUGAR options for MARCH ALL
EXPIRE on FRIDAY.
02/09/00
Twenty
days from now the next hurdle for the cyberworld appears, Feb 29th. Small computer circles
have posed scenario's which liken the LEAP YEAR day to Y2K. Since I was
"toasted" last century I will join the crowd and call it "hype". Just
thought I would mention it. Gold is up $9, yen is also stronger, and Nasdaq's next
target is 5000 (should we start a pool?) Brazil's agricultural sector grew by 19%
last quarter which could cast a cloud over Coffee, Soy Beans, Sugar, and OJ. Also I think
the author's of the journal receive "oneglass" since yesterday I drew attention
to the Nasdaq/Dow relationship and today section three has the same comments and NOBODY
paid me anything. On to the TRADES.
SILVER-has moved so fast (up and down) that it is hard to keep track of. I have noticed a
LAG between the GOLD moves and silver reaction so based on that I am BUYING the 550 MARCH
calls (three days left) for 2 1/2 cents $125 looking for a third test of the 560 area.
SWISS-has been a selling market for a few weeks but with the strength in the GOLD and the
uncertainty about the NEW IMF head in Europe there is ample room for a rally in this
currency. BUY on a stop 6196 (overnight highs) and then place the SELL STOP at 6182
risking $175.
SOY BEANS- up and down like the SILVER and a retest of 495 seemed inevitable but with the
metals up I am not positive. Agricultural Report (the one that started the beans up last
month) is due Friday and I feel that the uptrend will continue after those numbers are
released. If 495 does trade I like the 510 calls for 2 1/2 cents $125.
02/08/00
Give you a quick
idea of the difference in Stock Index's. On DEC 13th the dow stood at 112.34 (today 109.89
loss of $2450 per contract) while the NASDAQ was at 3208.00 (now 3973.00 GAIN of $15,300
on a MINI contract). Pays to follow these relationships. On to the TRADES:
ORANGE JUICE-survived any frost scare thus far and with the Brazillian crop doing well it
is time to turn to the chart which shows a strong downtrend and a double bottom at 79.00.
82.20 is the breakout fractal and I would SELL (81.95) at that level with a STOP at 83.10,
looking to take out the LOWS and head toward 75.00.
LEAN HOGS-have averaged a 1 cent ($400) move up per week this year, has hit contract highs
three times, and formed three good Elliott waves. In the LONG run this trend should
continue but expect a cleanout (limit down?) dip to the 60 cent level in the April
contract where BUYING the futures at 6010 and 5985 with a stop at 5935 should hold. SHORT
TERM I like the FEB 5700 PUTS for 30 points ($120) that expire next Monday.
GRAINS- are in a holding pattern probobly until the FRIDAY GRAIN REPORT. VALUE lies in the
Mar SOY BEAN CALLS with the 510 or 520 strikes being very attainible.
02/07/00
Pick a
market and it had a wild story on Friday. GOLD heads the list-up over $20 and
ounce and $10 higher on the overnight( we did recommend the 300 CALLS for $50 last week)
SILVER was lagging behind until the close but eventually broke the triple-top at 545 and
is at $5.57 now. SOYBEANS-touched 495 and settled at 505, CRUDE OIL was ONLY up 80 cents.
Could be the start of some BIG long term moves through the year and though I am a
proponent of short term options (Time is a luxury I hate to pay for) looking down the road
and BUYING April and May options could prove quite lucrative. Consumer Credit is
released today and is expected lower, Fourth QTR. productivity is out Tues. and is called
.6% lower than last month. Wed is Wholesale inventories (+1.0%), Thurs Initial Jobless
Claims, and Friday is Retail Sales at .6% which would be down .6%. On to the TRADES.
SILVER and GOLD-have a week to go in their MARCH options that have a great deal of
"juice" in them. Hard to go against the Friday trend but PUTS are where the
VALUE is. I see upward movement continuing until either 325 is hit in the gold or 575 in
the SILVER. Next week is the PPI and CPI and we may see some form of correction before
then.
SUGAR-has come back to life and seems headed toward the 6.00 cent level. One week left in
the March options and a COMBO trade is the play. BUY two March 600 calls for 8 points
($100) and TWO MAY 650 CALLS for 15 points ($168).
COCOA-hit 27 year lows as options expired on Friday. Most rallies in this market have
taken place as delivery pressure emerges near last trading days and That becomes the time
to RE-short. I expect that area to be near 838 (market settled at 767.
02/04/00
Correction on
"BUG AL" (TYPO yesterday) no pun intended. I have constantly written he is not
only the most influential person in the world but an economic wizard as well. Nasdaq and
cousin's responded well and still waiting for the unemployment numbers a test of the 4000
area in the futures seems quite likely. Problem is OPTIONS in this market are TOO
expensive and positions are dangerous, even in the mini (at $20 a point and with a 82
point limit that's a possible overnight risk of $1640-on a MINI) ON to the TRADES:
COCOA-options expire today and I expect to see a rally up near the 800 level (they
like to
settle at a strike price) since most long have been shaken out and shorts have dropped
their stops. Expect good volume and selling on the close if predicted rally occurs.
SILVER/BEANS- have "that" (see last Friday's comments) relationship and
have moved together. So why am I bullish beans and bearish silver? Long story but
factors include Option Time Value, Report releases(PPI, CPI, Mon AG), trend, and
sensitivity to rates. So a COMBO trade may work well. BUY SOYBEAN 490 PUT (3 cents) with
the Long term objective of BUYING future at 491-488 and BUY a 525 SILVER CALL for 7 (all
march) and SELL future contract at
532.
02/03/00
The news is out and EVERYBODY "appears happy. Stock
market is strong overnight as the Nasdaq is up 65 touching the high hit yesterday after
the rate anouncement. I have been touting LONG Nasdaq on pull backs and today the pullback
number to BUY looks like 3751, so take a shot. Unemployment rate is released tomorrow and
"BUG AL" will speak today so pay some careful attention since in the past the
slightest mention of anything( farming, manufacturing, exports, etc) can have far reaching
affects. ON TO THE TRADES.
COTTON-is forming a pennant which is "the cloud before the storm" While daily
ranges have been formidable, settlements have stayed within a 50 point area in 4 of 5
days. I have found that most markets showing this chart pattern first have a "fake
break", removing stops and then take off in the other direction. Using this trading
method and "knowing" cotton here's the play. BUY MARCH FUTURES at 55.55 and (IF)
ONE at 55.05 with a STOP at 54.70-in OPTIONS BUY 1 MAR 57 CALL at 55 and 1 MAY 59 CALL at
55 also. You could use a similar price parameter for going SHORT but since I am bullish
(and have been since late last century) I am NOT advising cotton-bears.
SILVER-EGADS!! Scary looking double-top stares at you off the charts and you have to
believe that things could get UGLY(professional commodity trading term for "who
know's what might happen"), but before we start buying the 545 STOP triple-top
(ALWAYS a strong signal [see pork bellies yesterday]) I see a "cleanout" all the
way down to 495 to shakeout the weak longs. This should make for a few good daytrading
periods SELLING rallies and exit and reversing at the key round nunbsps of support (buy/
reverse at 510 1/2 with stop at 504 1/2). OPTIONS for MARCH (with 10 days to go) may
suffer stagnation and erosion since the next inflation indicating reports (PPI and CPI)
are released after they expire. We will test the april serial market next week or BUY the
500 puts to set up futures plays perhaps by Monday.
COPPER-had me looking LONG a day early and the chart has 2 points of interest completed
yesterday. One a filling of the December GAP and tknow's touching of many a tredline.
March options have enough time left for a good profit potential and while I normally would
look tcleanoutxt "serial" option copper in "prime" months is a tiugh
enough game so let's try a longer term BULL SPREAdaytrading with a slight twist. BUY TWO
MAY 86 CALLS ans SELL one 90 CALL and ONE 78 PUT for 100 points ($250 and we will have to
work this price).
02/02/00
It is Ground
Hog day and the market will wait to see if it sees "BIG AL'S" shadow and
retreats for several weeks. Will experts have said a 1/4 point increase is "built
in" use EXTREME CAUTION if daytradeing the Index's today. I have mentioned
before that even if YOU are correct in predicting the outcome of the announcement this
afternoon you can still be a victim of "whip saw" activity so my advice is to
trade in other less volatile markets, today. On to the TRADES.
HEATING OIL-has been as bullish as a market gets and though this upcoming weekend (on the
EAST coast) was predicted to hit in the 50's it is quite chilly here today and I expect
that, on a daytrade, BUYING mar HEAT on the open (7800) will result in a "quick"
profit.
PORK BELLIES-are BULLISH again now that the are approaching a TRIPLE-TOP. Again, on a pull
back to 8910 BUY the FEB future with a 50 point stop ($200).
SHORT TERM OPTION PLAYS
GOLD mar 300 CALLS $60
SUGAR mar 550 CALLS $110
COCOA mar 800 CALLS $60
COTTON mar 60 CALLS $125
COPPER mar 88 CALLS $150
02/01/00
SOY BEANS-look like they took a pounding yesterday(looks
can be deceiving) taking out severall mini-support areas,and though they seemed to have
formed a double top at the 529 area the HIGH was HIGHER and a drop of 20 cents when the
Beans have gained over 50 cents in two weeks is not a death knell. I like the pull back a
an opportunity to get long more calls. 550 and 540 march CALLS are $100 to $200 each and
for the bolder there are several other strike availible. Daytraders can keep ann eye on
the GAP from Monday and BUYING PUTS (500 MAR) to eventually go long futures contract is
also atractive.
COTTON-has done its dance and will now sing a song for us titled "60 cents or
bust". Hardly ever like it when I get "too sure" of a market but all signs
point toward a filling of the GAP from months ago. Hope you have all bought the 59,60, or
61 calls on this recent consolidation (300 point range IS consolidation for some markets)
if not it may be tough to get back in for less than $250.