http://www.jurojinweekly.comTyche Research provide consistently profitable discretionary signals for futures traders in Single-Stock Futures, Currencies, Commodities, Stock Index, and Interest Rates.en-USWed, 20 Aug 2008 05:31:28 GMTCopyright 2005-2006 Tyche Research. See http://www.jurojinweekly.com/go/about/terms.aspx for terms of use.http://www.jurojinweekly.com/go/library/updates.aspx180http://76.12.206.76/img/jurojin-name.jpghttp://www.jurojinweekly.comhttp://www.jurojinweekly.com/go/library/update.aspx?UpdateID=429Tuesday August 19, 2008 Daily Update Here’s a shortened version of your daily update for Tuesday’s fills. We noted in this week’s issue that not only was the commodity market’s enemy – the dollar – set to pull back, but also that the key grain markets were oversold and set to rebound. Boy, was that a savvy observation. You should have been able to buy cheaper in both wheat and bean oil on Tuesday before the markets zoomed higher. Please make sure you adjust your exit levels according to the updated information below on all three of this week’s trades. Wheat: Buy the December Wheat future (W Z8) @ 870. (Initial margin: $3,645) Stop: 820 (loss: $2,500 per contract) Profit-targets: PT1=900 ($1,500); PT2=930 ($3,000). Filled 14 points lower – please adjust your levels accordingly. Wheat closed at 870.2 having printed 898 earlier, which is just below where we’re now looking for profit target one at 900. Hold. Soybean Oil: Buy the December 2008 Soybean Oil (BOZ8) @ 52.55 (Initial Margin $2,025) Stop: 50.00 (Loss: $1,530) Profit-targets: PT1=54.95; PT2=56.15. Man, that was a fun ride! Bean oil opened lower at 52.55 and surged higher to reach an intraday peak at 55.40. Having settled at 53.18 we’re now setting our PT1 at 54.95. Hold on for more excitement! Aussie Dollar: Buy Sep Aussie dollar future (ADU8) @ 86.41 (Margin $2,025 per contract) Stop: 85.16 (loss: $1,250 per contract) Profit-target: PT1=88.41 ($2,000) PT2=88.91 ($2,500) – The RBA did our trade a huge favor overnight when they hinted at a possible cut in interest rates over the coming months. That took the Aussie down to around 85.95 overnight as investors fretted over lower yields. However, not only did the greenback give ground today as we had predicted, but the market suddenly realized that if lower yields are on the horizon then now is the time to buy the Aussie currency and invest along the yield curve. Make hay while the sun shines! The Sep contract closed at 86.80 having provided us with a better opportunity to get long where we track a fill at 86.41. Please note the changes to the exit levels above. Hold. We’ll be back in action Wednesday with a full round-up. Good luck! http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=428Jurojin Daily Update: August 15,2008 DAILY ACTIVITY: Gold followed through to the downside today as the dollar traded to the highest level since early February. This gave you the opportunity to take some quick profits. You should have covered the first have of your position at 789 (P1) for a gain of $1328.00 per contract before commissions. With this market moving so fast it is prudent money management to take profits on the second half. With that in mind you should buy back the remaining portion of your position market on open. Now, here are updates on your open positions: Hold: Orange Juice: January 2009 Orange Juice 175 calls (OJF9175C) @ 5.25: No Stop: Profit-targets: PT1=7.50; PT2=10.50 – Orange juice felt the weight of broad-based commodity selling today tied to the strength in the U.S. dollar. There was also a system in the Caribbean that does not look as threatening to as it did yesterday. This option settled at 1.35 Hold Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250) Cocoa wasn’t immune to the dollar related selling as commodity funds pared back on their positions. This option settled at 21.00. Hold Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar took it cues from Crude oil and traded lower today. It should be noted that it was able to bounce off its lows as value seekers stepped in. This option closed at 15. Hold Buy to Close Position: December Mini Gold (YGZ8 or XGZ8) @ 829 or better. Initial margin: $1,215Stop: 869 (loss: $1,328 per contract) Profit-targets: PT1=789 ($1,328); PT2=756 ($2,423.60) Gold gave you a tidy quick profit. You should buy back the remaining portion of your position on the open to close out this trade. Be sure to cancel your stop order. Hold: December 2008 Live Cattle 110 calls (LCZ8C110) @ 280 points or better (Currently at 280 or $1120) No Stop. Profit-targets: PT1=560; PT2=700 Cattle followed corn and the grain markets lower today as traders watched the dollar defy gravity. This option settled at 252. Hold http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=427Jurojin Daily Update: August 14, 2008 Daily Activity: There was no actionable activity in the portfolio. Now, here are updates on your open positions … Hold: Orange Juice: January 2009 Orange Juice 175 calls (OJF9175C) @ 5.25: No Stop: Profit-targets: PT1=7.50; PT2=10.50 – Orange juice had some follow through buying early in session. The buying was tied to the Steger report, which was released yesterday. Later in the session a bout of profit taking came in and the market did settle off its highs. This option settled at 1.55. Hold Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250) Cocoa showed strength early in the session buoyed by a soft U.S. dollar but then later in the session it traded on the defensive as the dollar recovered. This option settled at 32. Hold Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar traversed the charts today following Crude Oil and the dollar. Many traders are talking about the uncertainty of the actual size of the Brazilian crop. Sugar futures are trading 46 ticks lower in the October contract. This option settled at 18. Hold Stay Short: December Mini Gold (YGZ8 or XGZ8) @ 829 or better. Initial margin: $1,215 Stop: 869 (loss: $1,328 per contract) Profit-targets: PT1=789 ($1,328); PT2=756 ($2,423.60) Gold gave back yesterdays gains as the dollar rose today. Soft crude oil prices also put pressure on the Gold market. Be sure to stay tuned for further geo-political developments from Russia as well as the Middle East. December mini gold last traded at 812.60. Stay Short Hold: December 2008 Live Cattle 110 calls (LCZ8C110) @ 280 points or better (Currently at 280 or $1120) No Stop. Profit-targets: PT1=560; PT2=700 Cattle followed the Corn market higher today and the charts look to be setting up for a bullish crossover of the 10 and 20 day moving average. This option last traded at 3.40. Hold http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=426Jurojin Daily Update: Thursday, July 31, 2008 Just as the talking heads script read higher interest rates, the Doji went the other way. This week’s slew of negative economic news pushed rates lower and you where on board via the German Bund trade. Bunds are within spitting distance of P1. Tomorrow at 7:30 central time the latest reading on the U.S. employment situation will be released. With this in mind, it’s time to protect some of your newfound profits. On the open sell one half of your position at the market and move your stop to 112.00 on the balance. Be sure to adjust your quantity on the stop. Now, here are updates on your open positions. Hold: Orange Juice: January 2009 Orange Juice 175 calls (OJF9175C) @ 5.25 Temporary Stop: No Stop Profit-targets: PT1=7.50; PT2=10.50 – Orange juice continues to break on light volume. There hasn’t been any real aggressive selling; just a lack of bids under the market. We continue to monitor the weather for any new developments. This option settled at 2.05. Hold Stay Short: British Pound: Sept British pound future (BPU8) @ 1.9975 (initial margin $1,890) Stop: 1.9975 (Breakeven - loss nil) Profit-target: PT1=1.9725 ($1,562) Hit, PT2=1.9525 ($2,812). The pound made an early attempt to rally, but failed as it hit major resistance and then closed below key moving averages. The September Pound settled at 1.9763. Hold Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250) Cocoa followed through today on technical buying after reversing course yesterday. This option settled at 72. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ 1.10 (cost: $1100) No Stop: (Loss $1100 per contract) Profit-target: PT1=2.20 ($1100) Crude Oil was all over the charts today and is currently trading $2.79 lower. The parade of soft economic numbers has many thinking demand will wane as economies slow. This option last traded at 53. Hold Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar rallied 50 ticks today as more talk of increased demand surfaced. It’s bullish to see sugar rallying with soft crude oil prices. This option last traded at 43. Hold Adjust Stop-Sell ½ Position Market: Sept German bund future (RXU8) @ 111.25 (initial margin Eur 1,610) Stop: 112.0 (Break-Even) Profit-target: PT1=112.75 (Eur 1,500), PT2=113.25 (Eur 2,000) German Bunds followed through as U.S. GDP numbers were weaker than the market had anticipated, also weekly unemployment claims came in higher than expected. Be sure to sell ½ of your position on the open and adjust your stop level and quantity. Bunds last traded at 112.62. http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=420Jurojin Update Thursday, July 10, 2008 Daily Activity: There was no actionable activity in the portfolio today. Hold: September Japanese yen (JYU8) @ 95.13 (Initial margin $3,375) Stop: 95.13 (break-even) ; PT1=93.63 ($1,875) -- HIT; PT2=93.13 ($2,500) The yen made an attempt to rally early in the session but met stiff resistance as it approached yesterday’s highs and profit taking set in. The September yen closed 19 ticks lower at 0.9378. Hold Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar closed is currently 25 ticks lower trading in a consolidation pattern. It found good intraday support on the 10 day moving average. This option settled at 0.45. Hold Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium): $462.50 per contract) Stop: 0.0350 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) Euros continue their sideways trade. They inched a bit lower and this option settled last traded at 0.0750. Hold Hold: August 2008 Live Cattle (LCQ8) @ 103.85 (Initial margin: $1,080) Stop: 100.450 (Loss: $1360 per contract) Profit-targets: PT1=107.25 ($1360) PT2=108.95 ($2040) August cattle felt the weight of the Goldman roll. This is where funds are selling out of nearby August and buying deferred contracts. August cattle closed 0.50 ticks lower at 102.050. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ market No Stop: (Loss $1100 per contract) Profit-target: PT1=220 ($1100) Crude Oil rallied over $5.00 today as Iran did more missile testing. This option settled at 0.50. Hold Hold: Jan 2009 Orange Juice future (OJF9) @ 132.10 Initial margin: $1,890 Stop: 128.80 (loss: $495.00 per contract) Profit-targets: PT1=142.10 ($1500.00) Orange Juice closed 15 ticks higher in a quiet trading session. The January contract last traded at 135.80. Hold Hold: August Mini Gold future (XGQ8 or YGQ8) @ 921.20 Initial margin: $1,485 Stop: 886.20 (loss: $1,162 per contract) Profit-targets: PT1=951.20 ($996); PT2=991.20 ($2,324) Gold rallied following crude oil higher. The Iranian missile firings and a weak U.S. Dollar also lent support. August mini gold is closing in P1. It last traded at 947.60. Hold http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=421Jurojin Update Friday, July 11, 2008 Daily Activity: Today was a double-edged sword for the portfolio. In Gold you got a chance to bank more profits as P1 was breached. You should have sold the first half of your position at 951.20 for a profit of $996.00 per contract before commissions. Your stop should now be placed at 921.50, which is breakeven. Be sure to place an order for P2. In Orange Juice you should have been stopped out of your January position. The fill is being tracked at a fill price of 127.70. This represents a loss of $660 per contract before commissions. Be sure to cancel any other orders associated with this trade. Hold: September Japanese yen (JYU8) @ 95.13 (Initial margin $3,375) Stop: 95.13 (break-even); PT1: 93.63 ($1,875) -- HIT; PT2 93.13 ($2,500) Déjà vu in the yen today. The yen rallied early in the session but hit some major resistance at the 50 day moving average and retreated. The September yen settled at 94.18. Hold Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar closed out the week on a positive note garnering support from a higher energy complex. This option settled at 0.58. Hold Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium: $462.50 per contract) Stop: 0.0350 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) Euro’s tested the lower end of the trading range. They found support on the 200-day moving average and bounced. This option last traded at 0.0800. Hold Hold: August 2008 Live Cattle (LCQ8) @ 103.85 (Initial margin: $1,080) Stop: 100.450 (Loss: $1360 per contract) Profit-targets: PT1=107.25 ($1360) PT2=108.95 ($2040) The trade in spreads dominated the Cattle market today. It was tug of war between commodity funds and local floor traders. The funds were buying the October contract and selling the August and the locals took positions on the other side. Boxed beef prices slipped after hitting 4.5-year highs. The August futures contract settled at 101.20, down 85 ticks on the day. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ market No Stop: (Loss $1100 per contract) Profit-target: PT1=220 ($1100) Crude Oil followed through to the upside putting in a fresh contract high. The Israeli-Iran situation is keeping a floor under this market. A weaker dollar was another bullish factor. This option last traded at 0.25. Hold Stopped Out: Jan 2009 Orange Juice future (OJF9) @ 132.10 Initial margin: $1,890 Stop=128.80 (loss: $495.00 per contract) Profit-targets: PT1=142.10 ($1500.00) Orange Juice sold off on a lack of fresh hurricane news as well as technical selling after failing to take out Thursday’s high. Be sure to cancel any orders associated with this trade. Hit P1: August Mini Gold future (XGQ8 or YGQ8) @ 921.20 Initial margin: $1,485 Stop: 921.20 (Break-even) Profit-targets: PT1=951.20 Hit ($996); PT2=991.20 ($2,324) Gold rallied following crude oil higher and continuing worries over geo-political concerns in the middle east. A soft U.S. Dollar also brought out the buyers. The August mini contract last traded at 966.70. Hold PILING UP GAINS WHILE MARKETS PLUNGE! The volatility in the market has been good for traders -- some traders. For the Supreme Council of the Secret Order of Jurojin—the elite group of professional traders that come together to share ideas on the markets—it’s been quite good. Even better, the loyal subscribers that have followed the traders of Jurojin have made out handsomely. Let’s take a look at how the investing universe is fairing in the current climate. 2008 Year to Date Jurojin* 48.80% S&P 500 -14.60% Lehman Agg Bond Index** -0.40% Hedge Fund Index -2.13% *YTD closed trades Jun 23rd **iShares Lehman Aggregate Bond The media and your stock broker will have you believe everyone is a helpless victim of such market malaise. Mr. Index Guy He’s the guy that has it all figured out. He believes the S&P 500 index is the “only way to build long term wealth.” He’s down 15% year-to-date and if he bought back in October of 1999, his investment is still underwater, almost nine years later. Mr. Mutual Fund Guy He’s your neighbor that thinks mutual funds are the smartest investment. In fact, he is willing to trust his retirement and life savings with the funds that have the best commercials and/or give his broker the best kickback. He doesn’t mind the unnecessary fees and the underwhelming long term performance. It’s too much for him to think about. Plus, he likes being with the herd. He feels comforted from the soothing words from such investment professionals, like “it’s a great buying opportunity.” The average actively managed mutual fund returns about 2% less per year than general stock market returns. So he is down 17% YTD. Mr. Hot Shot Guy He’s the one that tells you about every great deal he’s done, but lately he has been very quiet. Yes, he’s the one that told you incessantly how much his house was worth and how his vacation home in Florida was a goldmine. This hot shot has money in hedge funds. Cool! So how is he doing? Hedge funds are having their worst half, by some measures, since 1990…down 2.13% YTD. Of course, Hot Shot Guy is also a stock picker. Yes, the one that espouses about great plays in China while on the golf course. To estimate Mr. Hot Shot’s stock picking performance, take the S&P 500 decline and multiply it by 3. Mr. Conservative Guy He’s the one that scours the internet for the best money market rates. He found some good ones last year -- with big promises. But hold on. It turns out those uninsured and perceived safe investment funds were buying CDOs, i.e., sub prime loans. The SEC estimated 12% of money market funds were invested in sub prime debt last year. Chances are he didn’t have access to his money for a while as some funds put a freeze on withdrawals. When he did, he’s lucky it came back whole after banks and investment houses took the battered securities off the books of the funds. All the while inflation ticked up 4.2%., giving him an inflation-adjusted loss on his perceived safe investment. Mr. Sensible Guy Yep, he’s the bond guy. The one with razor sharp rationale. A man of sensibility and value. He scours through ratings and yields looking for safe investments that kick off a little cash. Wait a minute, he was likely exposed to sub prime too. The REITs and Mortgage companies were kicking off a great yield. He is Mr. Sensible, so we’ll give him the benefit of the doubt. He’s down 0.4% YTD, in line with the corporate investment grade bond market. And last, but not least-- Mr. Subscriber to Jurojin Guy This guy is pretty smart. Sure, the boys of Jurojin are doing pretty darn good. Helping subscribers extract over $170,000 out of the markets in just 2 ½ years. The surge in commodities has been fantastic in 2008. But that’s not all. Since we joined forces in the secret sanctum of brotherhood -- to deliver some of our trading recommendations to normal everyday folks — the kind that have never seen a trading floor-- we have seen quite a confluence of events. First a housing bubble developed, then it burst. A credit crisis, an oil crisis, and recession. A bear market in stocks, a devaluing dollar. All on-going. All of the while, our subscribers have been piling up gains to the tune of over 850%, in what mainstream America would describe as a “miserable market.” Kudos to our subscribers and to the Supreme Council! http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=422Daily Update Tuesday July 15, 2008 It’s wet and wild out there in those markets – Messers Paulson and Bernanke are offering calming words at Capitol Hill in semi-annual testimony. That’s been enough to stop the bleeding in equity markets – whether it lasts or not, we shall see. Here’s an update on today’s new recommendations. Japanese Yen CLOSE: September Japanese yen (JYU8) @ 95.13 (Initial margin $3,375) Stop: 95.13 (break-even); PT1: 93.63 ($1,875) -- HIT; PT2 93.13 ($2,500). You should have been stopped out at 95.13 or breakeven on the second half of your trade. Shame – but for the best under the circumstances. This was good risk management for this trade given the fact that the dollar traded much lower and created a new all-time low against the euro today on renewed fears over the health of the U.S. economy. Cocoa: Buy the December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250). You should have been filled at 115 as we’d hoped. Cocoa rallied today with the December contract trading at 2975 or up $53 points on the day. Hold. Mini Silver: Buy Sept Mini silver future (YSU8 or YIU8) @ market (approx: 19.192). Initial margin: $2,025 Stop: 18.409 (loss: $992 per contract) Profit-targets: PT1=20.404 ($1,003); PT2=21.654 ($2,058). The falling dollar sent metals higher today and our fill on the mini-silver contract was tracked at 19.4010. Note the amended targets for stop and profits. Hold. VIX: Sell Short ONE August CBOE Volatility index future (UXQ8) @ 26.05 (Initial margin $2,250) Stop: 30.05 (loss $4,000 per contract) PT1: 20.05 ($6,000) – We got a marginally better fill at 26.05 as the stock market opened on the defensive today. Markets swooned before turning positive around lunchtime sending the VIX down on the day. Note the amended targets for stop and profits. Hold. We’ll be back Wednesday with a full round-up. http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=423Jurojin Daily Update: Wednesday, July 16, 2008 Daily Portfolio Activity: There was no actionable activity in the portfolio today. Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar futures followed crude oil lower today. The October contract is currently down 18 ticks. It’s worth noting that volume today was light. This option settled at 50. Hold Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium): $462.50 per contract Stop: 0.0350 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) Euro’s traded in a narrow range today as traders parse the text from Bernanke’s testimony. This option last traded at 0.0750. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ 110 (cost: $1100) No Stop: (Loss $1100 per contract) Profit-target: PT1=220 ($1100) Oil followed through to the downside as the weekly inventories grew much higher than traders were expecting in both crude and gasoline stocks. In crude oil the market was looking for a draw of 1.6 million barrels. There actually was a build of 5.092 million barrels. In gasoline the market was looking for a draw of 200,000 barrels and there was in fact a build of 1.596 million barrels. Crude Oil is currently trading over $4.00 lower at 134.61. This option last traded at 1.00. Hold Hold: August Mini Gold future (XGQ8 or YGQ8) @ 921.20 Initial margin: $1,485 New Stop: 950.20 (gain of 962.80) Profit-targets: PT1=951.20 Hit ($996); PT2=991.20 ($2,324) Gold crumbled under the weight of Crude selling off over $4.00 for the second day in a row. A bounce in the dollar has brought out some selling. August mini-gold last traded at 960.90. Hold Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250) December cocoa rallied 60 ticks today as short covering and technical buying came in. This option settled at 143. Hold Adjust P2: Sept Mini silver future (YSU8 or YIU8) @ 19.4010 Initial margin: $2,025 Stop: 18.4090 (loss: $992 per contract) Profit-targets: PT1=20.4040 ($1,003); PT2=21.4590 ($2,058) Silver followed crude oil and gold lower today. A stronger dollar also weighed on Silver prices. It is worth noting all of today’s price action was inside yesterday’s trading range. September mini-silver last traded at 18.817. Hold Stay Short: August CBOE Volatility index future (UXQ8) @ 26.05 (Initial margin $2,250) Stop: 30.05 (loss $4,000 per contract) PT1=20.05 ($6,000) Equity markets bounced today and traders took some volatility out of the market. This was reflected in the VIX with the last reading pulling back to 24.75. Hold http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=424Jurojin Daily Update: Thursday, July 17, 2008 DAILY PORTFOLIO ACTIVITY: Silver sold of late in the session as crude oil traded below its 50 day moving average. You should have been stopped out of your mini-silver today and the fill is being tracked at 1843.00. Be sure to cancel any other orders associated with this trade. Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar futures sold off hard today as crude oil traded through major technical levels. The October futures contract shed 113 points as traders sold and asked questions later. This option last traded at 22. Hold Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium): $462.50 per contract Stop: 3.5 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) Euro’s traded soft today as interest rates ticked higher on a housing start report that was surprisingly strong and caught traders off guard. This option last traded at 5. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ 1.10 (cost: $1100) No Stop: (Loss $1100 per contract) Profit-target: PT1=2.20 ($1100) Oil followed through to the downside once again today and breached the 50 day moving average. The selling accelerated when that level was breached as recent longs threw in the towel and liquidated positions. Tomorrow’s close will be key on the weekly charts. This option last traded at 135. Hold Hold: August Mini Gold future (XGQ8 or YGQ8) @ 921.20 Initial margin: $1,485 New Stop: 950.20 (gain of 962.80) Profit-targets: PT1=951.20 Hit ($996); PT2=991.20 ($2,324) Gold was able to hold its own early in the session, divorcing itself from crude oil and close up $8.00 in the day session. In the after market gold is now trading $6.00 lower as crude oil continues to sell off. Hold Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1=160 (gain: $450); PT2=240 (gain: $1,250) Cocoa ended up settling sharply lower after trading higher early in the day. It followed other markets lower as crude oil pressured the whole commodity sector. This option settled at 108. Hold Stopped Out: Sept Mini silver future (YSU8 or YIU8) @ 19.4010 Initial margin: $2,025 Stop: 18.4090 (loss: $992 per contract) Profit-targets: PT1=20.4040 ($1,003); PT2=21.4590 ($2,058) Silver traded in extremely choppy fashion today and sold off on lower crude and thoughts of slowing world economies. Be sure to cancel any other orders associated with this trade. Stay Short: August CBOE Volatility index future (UXQ8) @ 26.05 (Initial margin $2,250) Stop: 30.05 (loss $4,000 per contract) PT1=20.05 ($6,000) Equity markets rallied today and traders took more volatility out of the market. As markets calm and stabilize the VIX should start to trend lower. The VIX last traded at 23.86 down 0.86 on the day. Stay Short WHEN I DIE I WANT TO COME BACK AS A MUTUAL FUND MANAGER (NOT REALLY) The SEC issued an emergency order this week placing restrictions on short selling shares of certain banks. The very banks that created the structures responsible for driving the insatiable demand for low-to-no quality mortgages and then drinking the cool-aid -- by taking those structures on their balance sheets -- are now being protected by the almighty US government that has decided for its constituents that “free-markets” are only good when convenient. If you’ve heard the glamorized reviews of hedge fund manager compensation through the media in the past, you may have found yourself a bit disturbed by the staggering numbers. Sure there are a handful of those with wealth that could challenge the GDP of a small country. Consider this. By in large, hedge fund managers are paid to extract profit from markets without the assistance of an underlying tide. This is what is referred to as “alpha.” Alpha is manager ability to create value, which is beyond the expected return of the investment. For doing so, they get paid. When they short a bank that has buried itself in landmine assets and horrible management then have to suffer the indignity of having those shorts go 30+% against them because of government intervention. They earn and deserve every penny of their final compensation. The mutual fund game is the exact opposite. Mutual fund managers make money by marketing -- marketing some more -- and then marketing some more. They get paid by gathering assets, crafting a fancy story about a sophisticated and diligent investment process. Then they simply mirror an index. When stocks go up, they underperform. When stock go down, they underperform. Investors have been trained to accept that their performance will swing with the general market. Therefore, the manager has no accountability. Mutual fund managers are the investment industry equivalent of a union worker. They get paid for showing up. When things go well, it’s a free market. When things don’t go so well, i.e. stock market decline, the brain trust in Washington starts gathering to manufacture higher share prices. Thanks to the government, Mr. Mutual Fund Manager, bewildered by his death spiraling portfolio, can keep his afternoon tee time. http://www.jurojinweekly.com/go/library/update.aspx?UpdateID=425Jurojin Daily Update: Friday, July 18, 2008 DAILY PORTFOLIO ACTIVITY: Gold pulled back today as traders continue to pare back on long crude oil positions. You should have been stopped out of the second half of your gold position at a profit. This is where prudent risk management comes into trading. Your stop should have protected a good portion of the open trade equity you had accrued in this trade. Be sure to cancel any other orders associated with this trade. Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar futures traded lower today and found support on the 50 day moving average. Weak grain markets and a two-sided trade in crude oil helped pressure the sugar market. This option last traded at 19. Hold Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium): $462.50 per contract) Stop: 3.5 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) Euro’s traded quietly in low volume directionless trade mostly following the equity markets. This option was fairly inactive today and last traded at 5. Hold Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ 1.10 (cost: $1100) No Stop: (Loss $1100 per contract) Profit-target: PT1=2.20 ($1100) Crude Oil traded on both sides of unchanged today but traders lined up selling into rallies as the charts have turned near term negative. This option didn’t trade today but was last offered at 125. Hold Stop Hit Cancel P2: August Mini Gold future (XGQ8 or YGQ8) @ 921.20 Initial margin: $1,485 New Stop: 950.20 (gain of 962.80)-Hit Profit-targets: PT1=951.20 Hit ($996); PT2=991.20 ($2,324) Gold sold off $12.70 today as it tried to find support. The market did find support on the 10 day moving average. Your stop should have protected $956.00 in open trade equity or gains. This position is officially closed. Hold: December 2008 Cocoa 35.00 calls (CCZ8C3500) @ 115 ($1,150) (Currently at 115) No Stop Profit-targets: PT1 =160 (gain: $450); PT2=240 (gain: $1,250) Cocoa again felt the weight of broad based selling in commodities as many use crude as a proxy for commodity markets next move. The energies are where inflation is clearly evident. This option settled at 95. Hold Stay Short: August CBOE Volatility index future (UXQ8) @ 26.05 (Initial margin $2,250) Stop: 30.05 (loss $4,000 per contract) PT1=20.05 ($6,000) Equity markets appear to be stabilizing and with this sense of calm traders are taking volatility out of the VIX. The VIX is presently trading at 24.17 down 8 ticks. Stay Short. CREDIT CRISIS—MORE TO COME Bank earnings this week have divulged further write-downs from the impact of bad loans and deteriorating asset values. The last prior tally of total bank write-downs was in the $400 billion neighborhood. Here are some published estimates of how much more total losses could be in store: Estimates of total Subprime losses IMF- $945 billion George Soros- $1 trillion John Paulson- $1.3 trillion Bridgewater Associates- $1.6 trillion For reference, John Paulson runs a credit hedge fund that made 590% last year betting on a collapse in real estate. He now manages a $28 billion hedge fund and remains short. Bridgewater Associates runs more than $160 billion, $45 billion of which in a hedge fund called Pure Alpha. Pure Alpha is one of the largest hedge funds in the world. Last year's collapse of the subprime mortgage market and the protracted decline in real estate prices was only the first phase of the credit crisis, according to Bridgewater’s recent report. The demise of Bear Stearns in March and the subsequent buyout of the bank by JP Morgan Chase & Co., supported by the Fed—marked the beginning of Phase two. Bridgewater expects the next shoe to drop, Phase three, will be the spread of losses to corporate markets and credit card receivables.