Market to rally today on a lower opening below 995.00. On a higher opening market expected to rally up through 1:30 est then possibly pull back in the later session. NOTICE: Extra long briefing today due to some important updates.
Trade Setup Summary for Wednesday, July 16, 2003:
1) Buy 988.50/ Sell 993.75 +5pts (Buy B/D...Sell "Buy Pivot becomes Sell resistance with Bear H5)
2) Sell 993.00/ Cover 988.00 (Up to) +5 pts. (Sell "Buy Pivot becomes Sell resistance with a Bear H5)
Recap of Wednesday's Action:
Good Morning and thank you for joining us today. A special welcome to all of our new subscribers and visitors from around the globe.
Wednesday had some very important things occur on various levels and we will go over them in detail with you.
First, it is extremely important to realize that the S&P500 markets are a little different every day. Just like life itself, the various opinions, strategies, and market moods that are occurring everyday require us to be dynamic traders and be totally willing to use a strict, proven system yet all the while be able to view that system as a MEANS TO ACCOMPLISHING OUR GOAL. Our goal is to make, ideally, lots of dough$ (or at least a good living) so that we can pay our mortgage, buy nice gifts for ourselves and our loved ones, and take great vacations when we want. Wouldn't You agree?
That being said we first want to recover what we call a RE-TOOL of a TCF Set up rule.
TCF RE-TOOL: Subject- "Buy Pivot becomes Sell Resistance with bear High 5" and "Sell Pivot becomes Buy Support with bull High 5".
These two TCF trade setups are reversals off the Buy/Sell Pivots when the prices blow through the -/+4.25 stop/pivot as described in the manual. When I recently reconstructed the manual for the 21st Century Futures site I had left out an important re-tool that we did about 6 months ago. This involves a very simple procedure. After prices blow through the +/-4.25 stop/pivot INSTEAD of waiting for the reflex reversal move to trade back to the original Buy or Sell pivot we will now reverse the trade at the ORIGINAL PIVOT plus 1 PT. in the case of the "Sell Pivot becomes Buy Support" and minus 1 point in the case of the "Buy Pivot becomes Sell resistance".
This was the original retool we did about 6 months ago and many of our subscribers are familiar with it. In fact I got some emails asking about it recently why it was not in the manual. I was hoping we could continue to use the original pivot to reverse at but I think we need to RE-INSTALL this re-tooled update.
So don't concern if you missed it on Wednesday, but I am going to record the 993-994.00 as the reversal shorting area on this TCF trade setup that occurred on Wednesday. I really think it's more important to do this now, record the trade this way, and have to opportunity for you to see how these trades work on the chart today.
Also, because there were 2 TCF setups, I can take this opportunity today to explain how and what to do in an exact case like this which occured Wednesday. So overall recording this today and reviewing it as if it was already a rule (which it was) will save you possibly missing this important method again...maybe even tomorrow. Who knows?
So for Wednesday's action we had the BreakDown hit as the first of the Hour One pivots at 10:31est at 989.75. The High Five had a bearish tone especially with the TRIN at 1.40 and higher so the idea was to try and buy em a little lower below the first hour low at 989.75. This number just happened to be the --4.25 stop/pivot on the 994.00 Buy Pivot target. Interesting how all these numbers coordinate isn't it? The --2-4 point zone was 985.75-987.75 with 987.50 coming in as the low of the day. So I recorded 988.50 just to give some compromise to where traders may have got in.
Always remember, the goal of the Trade Setup Summary section is to show you where the TCF setups occurred and how they panned out as far as potential profits or losses. Not as some sort of track record necessarily. The purpose is mostly for training purposes so YOU can make money. In this way, by aligning your own trades with the TCF setups you can grade yourself on how you did for the day and stay on track.
This is crucial to prevent over trading if you are sincerely trying to follow our exact methods. One of the main problems in the S&P500 trading discipline is the tendency to follow a system for a while and then later slip into this "guessing on trades" routine. This is where you will tell yourself that "just this one time, I have a 'gut feeling' here that this is where they are going to turn around/rally/drop, etc.". Gang, this is called "guessing on trades" pure and simple if you are not following an exact, proven setup that you have tested and proven to be profitable. Just be aware of it so you can catch yourself and graduate to ONLY trading proven setups. Your bank account will love you for it.
So after the market hit the B/D we saw prices push up and approach the original 994.00 Buy pivot target that we were now looking to short. Using the 993-994.00 zone to sell in would have got us short. This is what I am referring to above in the Re-Tooling section. Using this one point zone like we do to take the Buy/Sell pivots on their stated side of the market we are simply doing this in reverse when the markets have blown through the 4.25 stop/pivot and we are reversing on a reflex move. The S&P500 pulled back off this zone and as we saw them test the early lows and find support we looked to cover up the trade. So on balance making these two trades you could have gotten up to 9 points of profit and would not have had any losses as there was virtually no pressure on the stop on either of these trades.
Today's Call & Briefing:
Our Headline Call for today is looking for an over all rally day especially off of a lower opening and early move lower. The majority of our TCF Market Force indicators are bullish today looking for a reversal off this downside pushing we have had the last 2 sessions. We have not gotten the real depth of lower prices I was expecting from the market moving below the Pit Bull 10 Day Moving Average and it appears that prices want to crossover again to the upside.
If they open higher and run up higher immediately today this will be a more bearish oriented move and we should see the rally fizzle out after "hanging up" near the highs most of the day. We do not expect this to occur if we get a full on Bullish BreakOut trade with a super strong High Five.
Our expected time for the later session pullback would be just after 1:30est. Usually we find this time to be associated with a period when many of the big New York Mutual Fund managers are getting back from their 2 martini lunches and making decisions on the market and what to do. Often on a big run up early on Thursday's they appear to want to let some of the air out of the tires and sell some weaker issues in their portfolios.
Of course, at this time many of them are sitting on the lake at their vacation homes or other destinations and have left the Jr. managers in charge to "hold down the fort". As I had mentioned about a week ago, this is often what causes the go nowhere markets of July and August. This action is great for us intra day traders usually as we have seen.
TCF SETUPS TO WATCH FOR TODAY: For today let's be on the lookout for a BreakOut Buy just after the first hour. The symptom of this occurring will be a relatively quiet looking market with the Dow flat at the time of the B/O (Flat=Dow trading under +50). However, we would want to see the NAZ (our nickname for the nasdaq composite index) leading the way (instead of the Dow) with NAZ being up +12-15 points or more. With this occurring along with a TRIN below .80 or lower and the VIX down ideally below -.50 we would have the formula in place to Buy the BreakOut and hoooold long. Use a 6 point stop from the exact B/O and follow the rules for grooming the stop up.
If we get an early rally with a strong High Five BUT with the Dow soaring ahead of the rest of the market being up +60 or more then we would want to look to sell the BreakOut and add 2-4 points to that high. Now this could get a little tricky if it's going to be a real strong BreakOut buy. If the TRIN is really low (below .l50-.60) and the VIX is real low down -.70 or more then we could see em break out upwards from a higher level.
I am not expecting this today but if some EXTRAORDINARY good news comes out which is being interpreted as Highly Bullish then watch for this. Otherwise we shall follow the Sell B/O idea as described in the S&P500 Trading Handbook.
There is a possibility today of an out of left field BEAR UGLY day. I do not expect this but there is a remote chance of this occuring which would throw water on our Headline Call. You would notice this as a huge gap lower with some bad associated news on television. Otherwise we are looking for a move up today. Let's see if we can get something going to the upside that will stick. That would be nice and would support the idea that underlying forces both real and manipulated are trying to pump the market up for the coming election to try to compensate for what has been a terrible 2 year period on all sides.
Value Area: 988.40 - 994.20
Trade holding above the 995.00 area is going to be bullish for today. The bottom of the VA is right where we had double support on Wednesday and this would be expected to hold today if they are going to be bullish.
Buy Pivot Target: 987.00 - 988.00
Let's buy this buy pivot target today and place a stop 5 points below the pivot at 982.00. If our Headline Call is correct and we get a flat to lower opening and get this pivot nailed then the market should push up off of it. Be sure the High Five are not Bear Ugly.
Sell Pivot Target: 1,003.50 - 1,002.50
No trade at this pivot today. Let's see if we can get a rally up through this number and up to the +4.25 stop/pivot at 1007.75 and possibly higher. Watch this Sell Pivot target and the 1007.75 in connection with a bullish BreakOut.
10 Day "Pit Bull" Moving Average: 997.10
Prices have continuously been holding this area in CROSSOVER ALERT for the 6th day in a row now. Upon moving below the Pit Bull they just can't seem to move decisively lower. If we see a move up above this 997.10 that holds up then we should break out to higher levels at least for today. Tomorrow, Friday, would then be the "wild card" if indeed we do get the rally we are calling for today and we would look for that day's action to really give us clues as to continuation direction.
Pro Trader's Action
We are looking for a rally today and ideally this would occur on a lower opening and early move lower. If so, we are going to attempt to grab the Buy Pivot target and hold to the BreakOut and see what happens.
If they OPEN HIGHER and move up immediately we would then expect prices to "hang up" near the highs and then pull back later in the session after 1:30 est. If for any reason we see a strong gap lower or a Bear Ugly type market situation or news then realize that the Headline Call would be cancelled and we would simply wait for the first hour to transpire to determine if there are any clear TCF trade setups.
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Good luck with your trading today and be sure to check in with us on the ASK MOHAN section . I'll email all subscribers when I post any new Q&A's there.
Let's see if we can nail 8-10 points today on the long side. I'll see you in the action. Mohan
Se não receio o erro é porque estou sempre pronto a corrigi-lo
There's no bull side and no bear side. JUST THE RIGHT SIDE!
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