Mohan de hoje!
Enviado: 23/7/2003 13:32Market expected to rally today!
Trade Setup Summary for Tuesday, July 22, 2003:
Buy 974.50/ Sell 984.50 --987.50 +10-13 pts. (Buy B/D Hour One pivot)
Recap of Tuesday's Action:
A top of the morning to you and we appreciate your joining with us. A very special welcome to all of our new subscribers and visiting traders from around the globe. We are seeing a large amount of visitors from Australia joining so a very G'Day to you all from Down Under.
Our Headline Call on Tuesday was expecting the market to attempt to rally and we wanted to keep looking to short those rallies for pullbacks. What we got was pressure on the downside to start out the early session which made a perfect match for what we were trying to accomplish...namely to see a rally attempt.
The first Hour One pivot to get hit was the BreakDown at 974.50 as shown on the chart above getting hit at 10:50est exact and getting us LONG ON THE BOTTOM TICK. This is the 3rd time since starting our TCF service just a few short weeks ago that we have either caught the top or bottom tick of the day within a tick. This shows you the EXTREME ACCURACY of the TCF Trade setups and their effectiveness in nailing the right side of the market.
That buy at 974.50 shot up without a hitch and gave us 10 handles WITHIN 50 MINUTES. Congratulations if you caught it. If you understood how we were looking to sell the BreakOut at 983.00 plus 2-4 points as described in Tuesday's Morning Call (with the bullish High 5 we had) then you could have nailed up to 13 points on the trade. Did you guys understand how we viewed this for holding long through the BreakOut? If not, just make notes on this and rest assured it will occur again soon.
Why am I not recording the short at the B/O +2-4 combined with the Sell Pivot target? Well, I know that was a good short trade for a pullback down to the 981.00 area and many of you took that trade as I got your emails about it. But let me explain some important details.
Now, first of all, that was not an incorrect TCF trade set up. If you did get short and scalped some points on the lower move there congratulations. Here is why I would NOT have taken it. First of all, we had already completed a very successful +10-13 pt. profitable trade. You have heard me talk about taking the day off after this occurs and basking in the good feelings this produces.
There is great value in allowing yourself this luxury. First, those successful feelings of making a great trade, following a proven pattern and seeing profits appear quickly and painlessly are valuable for neutralizing some of the neurological and mental damage we accumulate in being traders in the "fastest game in town" (the S&P500). A lot of this damage is very subtle. Giving yourself the day off allows a replenishing of successful brain wave patterns which work to stimulate and record new sub modality imprints on the brain telling you subconsciously, "I am a winning trader". The value of this cannot be understated ESPECIALLY FOR BEGINNERS AND INTERMEDIATES.
Second, once a successful Hour One pivot has been hit and becomes a super successful trade as this one did, the second Hour One pivot can sometimes lose its full potency in giving us the 8-10 point move we want. This was seen by the result of selling the B/O +2-4. They pulled em back around 7 handles but then bounced back never completing the full 8 points. We had also suggested not to trade the Sell Pivot target so there was some doubt on selling here PLUS the High Five were rather bullish at the time of the B/O. But remember, the Headine Call also was clearly looking for rallies to get hit with selling which is exactly what occurred.
So for educational purposes by showing you how I analyze such as setup as that which occurred on Tuesday it gives you some good notes for the next time we see this occur or similar circumstances. My goal on the Morning Call is to train you how to be a REAL S&P500 Emini trader and not just some "follow along signal duplicator". Trust me, you will THANK ME in the months and years to come as we really dig in to this business and you learn what it means to SURVIVE and SUCCEED as a real trader.
Today's Call & Briefing:
I am going to go out on a limb (like I do everyday actually) and call for a rally to occur. If I am right on this Headline Call we should get a real full on BreakOut Buy setup on the Hour One B/O pivot.
If I am wrong then we gap up and fizzle out later with a Bearish High 5 showing up in a "Too Much Too Soon" type setup. At least with our Market Call daily briefings we don't mind being wrong and simply FADING our Headline Call if it is obviously going to be wrong. This does not happen much but we are REALITY BASED S&p500 traders and are always willing to just do the right and appropriate things for making money....our #1 Goal.
For today though we are going to be looking for a rally due to our TCF Market Force indicators strongly suggesting this action and if correct we expect it to carry through to Thursday mid session or so. We are in CROSSOVER ALERT with the 10 Day Moving Average "Pit Bull" and as such we will be looking for prices to blow through the 992-93 area with our Rally Headline Call. This will be one of the first signs to watch for. How are prices reacting to the Pit Bull. More on this in the 10 Day MA section below.
We also want to carefully monitor THE OPENING PRICE TODAY. As professional S&p500 traders the opening price is one of our best pivots to monitor daily. So many traders miss this. If the prices open at a certain point but the trade HOLDS BELOW THE OPENING then this clearly shows price rejection by the traders. Holding ABOVE THE OPENING shows price acceptance and as prices move higher the opening becomes even more crucial as an indicator pivot. Especially for today we need to monitor the opening in relation to our Headline Call of looking for a rally.
Ideally, if we get a BreakOut Buy then we will be monitoring the B/O price for support as well. If our call pans out then we see the first level of resistance at 992-3 Pit Bull price, 995.25, 1001.00, 1004.00 and 1007.00 on the way up. Make a note of these numbers and if we get the expected rally then these will also be valuable to use for Thursday's continuation higher or "price rejection levels".
Let's see if we can get the bullish action expected and if wrong be on the lookout for a true Bear Ugly day as discussed at length on Tuesday's RECAP and on the "Ask Mohan" section. No big deal and no ego. Just total flexibility to win the dough$.
TCF TRADE SETUPS TO WATCH FOR TODAY: If we are going to get the rally action expected then we want to first be on the lookout for a Bullish BreakOut Buy. It would have an almost IDENTICAL HIGH 5 as that which occurred on Tuesday if you recall. You do remember yesterday's action and High 5 setups don't you? Are you sure? Please pay attention to these things. I'm not nagging just trying to help you look out for your own bank account, OK!
Look for a flat Dow (our definition of a flat Dow is up +50 or less), the NAZ leading being up +12-15 or more, with the TRIN down below ..80 and ideally closer to .60 or less. VIX lower and as the rally moves up we would see VIX drop lower than -.50 with MER moving up +.80 or higher.
If we get a strong rally RIGHT OFF THE OPEN with the Dow soaring over +80 or more but with the NAZ weak and holding back being only up +10 or less then we better be ready for that rally to fizzle out. Look at TRIN and what does it say? On a set up like this with NAZ weak if we see TRIN above 1.00 this confirms a rally about to pull back. We call this setup "Too Much Too Soon" and it refers to a rally that we had scheduled to occur in our Headline Call or was visible in our Market Force indicators and we alerted you to it but it occurred hard and fast right off the open. These are fake outs and need to be faded almost every time.
As mentioned, be on the lookout for our Headline Call to be off base with a strong gap lower, bad news surrounding the markets, and a Bear Ugly High 5. If we get a lower opening and just slow erosion that picks up gradually, crosses back over the opening, and ends up hitting the B/O as the first Hour One pivot this is usually how the BreakOut buys setup. Good luck.
Value Area: 980.00 - 988.50
Holding above 988.00 is going to be bullish today. If they rally, pull back to the top of the VA and penetrate it holding within the VA for 2-3 minutes then we could see em retrace 75% of the range back to the 983.00 area. Otherwise, if we do get bullish today it is expected that we will leave this price of 988.00 in the dust as the market climbs. Just as a reminder, hard fast rallies early in the session will need to be faded.
Buy Pivot Target: 977.50 - 978.50
Let's go ahead and buy the Buy Pivot target on a slightly lower opening and early run down here. Strong gap openings lower over --6.00 points could be a problem and setting up a Bear Ugly scenario. Grab the buy pivot, use a 5 point stop, and let's see if we can run em up.
Sell Pivot Target: 992.75 - 991.75
Let's go ahead and buy the Buy Pivot target on a slightly lower opening and early run down here. Strong gap openings lower over --6.00 points could be a problem and setting up a Bear Ugly scenario. Grab the buy pivot, use a 5 point stop, and let's see if we can run em up.
10 Day "Pit Bull" Moving Average: 992.20
As discussed above we have the Pit Bull sitting right on this Sell Pivot target area and forming strong initial resistance.
Should we short em here? If we gap up to this price on the opening there will be an initial pullback off this area. But we generally do not trade the opening gaps and early moves. Only when we suggest a Buy/Sell Pivot target do we get in a trade during the first hour. Some claim to have effective sytems for trading all these early erratic moves but most of them are just "action junkies" and are not trading valid, proven setups. Don't get caught up in the first moves of the day. It's mostly just the amateurs who can't hold themselves back and wait for a reliable setup to occur. They "got to get in" because the "market is getting away from me". Can you see? They personalize the entire movements of the market with their inexperienced trading knowledge and emotions. What's the point of this I'll never know.
It sort of reminds me of a kid with his first motor cycle making all these dangerous rides and moves without hardly any working knowledge of the bike or the harm it could do to him.
Pro Trader's Action
We are expecting a rally today. If this occurs it will most likely show up in the form of a BreakOut Buy scenario with a bullish High 5. It could also present itself as a "sneak up rally" type setup. Just keep an eye of the High 5 at the time of the B/O and if they are in following our BreakOut buy criteria then go for it and patiently hold long.
We have given you the caveat warnings of what to look for if I am totally wrong on this so keep all this in the forefront of your trade ideas.
We are on a roll and had a great day on Tuesday so let's go in and nail another 8-10 points today.
I'll be rockin and rollin in the action of course and I'll see you there. All the best, Mohan
Trade Setup Summary for Tuesday, July 22, 2003:
Buy 974.50/ Sell 984.50 --987.50 +10-13 pts. (Buy B/D Hour One pivot)
Recap of Tuesday's Action:
A top of the morning to you and we appreciate your joining with us. A very special welcome to all of our new subscribers and visiting traders from around the globe. We are seeing a large amount of visitors from Australia joining so a very G'Day to you all from Down Under.
Our Headline Call on Tuesday was expecting the market to attempt to rally and we wanted to keep looking to short those rallies for pullbacks. What we got was pressure on the downside to start out the early session which made a perfect match for what we were trying to accomplish...namely to see a rally attempt.
The first Hour One pivot to get hit was the BreakDown at 974.50 as shown on the chart above getting hit at 10:50est exact and getting us LONG ON THE BOTTOM TICK. This is the 3rd time since starting our TCF service just a few short weeks ago that we have either caught the top or bottom tick of the day within a tick. This shows you the EXTREME ACCURACY of the TCF Trade setups and their effectiveness in nailing the right side of the market.
That buy at 974.50 shot up without a hitch and gave us 10 handles WITHIN 50 MINUTES. Congratulations if you caught it. If you understood how we were looking to sell the BreakOut at 983.00 plus 2-4 points as described in Tuesday's Morning Call (with the bullish High 5 we had) then you could have nailed up to 13 points on the trade. Did you guys understand how we viewed this for holding long through the BreakOut? If not, just make notes on this and rest assured it will occur again soon.
Why am I not recording the short at the B/O +2-4 combined with the Sell Pivot target? Well, I know that was a good short trade for a pullback down to the 981.00 area and many of you took that trade as I got your emails about it. But let me explain some important details.
Now, first of all, that was not an incorrect TCF trade set up. If you did get short and scalped some points on the lower move there congratulations. Here is why I would NOT have taken it. First of all, we had already completed a very successful +10-13 pt. profitable trade. You have heard me talk about taking the day off after this occurs and basking in the good feelings this produces.
There is great value in allowing yourself this luxury. First, those successful feelings of making a great trade, following a proven pattern and seeing profits appear quickly and painlessly are valuable for neutralizing some of the neurological and mental damage we accumulate in being traders in the "fastest game in town" (the S&P500). A lot of this damage is very subtle. Giving yourself the day off allows a replenishing of successful brain wave patterns which work to stimulate and record new sub modality imprints on the brain telling you subconsciously, "I am a winning trader". The value of this cannot be understated ESPECIALLY FOR BEGINNERS AND INTERMEDIATES.
Second, once a successful Hour One pivot has been hit and becomes a super successful trade as this one did, the second Hour One pivot can sometimes lose its full potency in giving us the 8-10 point move we want. This was seen by the result of selling the B/O +2-4. They pulled em back around 7 handles but then bounced back never completing the full 8 points. We had also suggested not to trade the Sell Pivot target so there was some doubt on selling here PLUS the High Five were rather bullish at the time of the B/O. But remember, the Headine Call also was clearly looking for rallies to get hit with selling which is exactly what occurred.
So for educational purposes by showing you how I analyze such as setup as that which occurred on Tuesday it gives you some good notes for the next time we see this occur or similar circumstances. My goal on the Morning Call is to train you how to be a REAL S&P500 Emini trader and not just some "follow along signal duplicator". Trust me, you will THANK ME in the months and years to come as we really dig in to this business and you learn what it means to SURVIVE and SUCCEED as a real trader.
Today's Call & Briefing:
I am going to go out on a limb (like I do everyday actually) and call for a rally to occur. If I am right on this Headline Call we should get a real full on BreakOut Buy setup on the Hour One B/O pivot.
If I am wrong then we gap up and fizzle out later with a Bearish High 5 showing up in a "Too Much Too Soon" type setup. At least with our Market Call daily briefings we don't mind being wrong and simply FADING our Headline Call if it is obviously going to be wrong. This does not happen much but we are REALITY BASED S&p500 traders and are always willing to just do the right and appropriate things for making money....our #1 Goal.
For today though we are going to be looking for a rally due to our TCF Market Force indicators strongly suggesting this action and if correct we expect it to carry through to Thursday mid session or so. We are in CROSSOVER ALERT with the 10 Day Moving Average "Pit Bull" and as such we will be looking for prices to blow through the 992-93 area with our Rally Headline Call. This will be one of the first signs to watch for. How are prices reacting to the Pit Bull. More on this in the 10 Day MA section below.
We also want to carefully monitor THE OPENING PRICE TODAY. As professional S&p500 traders the opening price is one of our best pivots to monitor daily. So many traders miss this. If the prices open at a certain point but the trade HOLDS BELOW THE OPENING then this clearly shows price rejection by the traders. Holding ABOVE THE OPENING shows price acceptance and as prices move higher the opening becomes even more crucial as an indicator pivot. Especially for today we need to monitor the opening in relation to our Headline Call of looking for a rally.
Ideally, if we get a BreakOut Buy then we will be monitoring the B/O price for support as well. If our call pans out then we see the first level of resistance at 992-3 Pit Bull price, 995.25, 1001.00, 1004.00 and 1007.00 on the way up. Make a note of these numbers and if we get the expected rally then these will also be valuable to use for Thursday's continuation higher or "price rejection levels".
Let's see if we can get the bullish action expected and if wrong be on the lookout for a true Bear Ugly day as discussed at length on Tuesday's RECAP and on the "Ask Mohan" section. No big deal and no ego. Just total flexibility to win the dough$.
TCF TRADE SETUPS TO WATCH FOR TODAY: If we are going to get the rally action expected then we want to first be on the lookout for a Bullish BreakOut Buy. It would have an almost IDENTICAL HIGH 5 as that which occurred on Tuesday if you recall. You do remember yesterday's action and High 5 setups don't you? Are you sure? Please pay attention to these things. I'm not nagging just trying to help you look out for your own bank account, OK!
Look for a flat Dow (our definition of a flat Dow is up +50 or less), the NAZ leading being up +12-15 or more, with the TRIN down below ..80 and ideally closer to .60 or less. VIX lower and as the rally moves up we would see VIX drop lower than -.50 with MER moving up +.80 or higher.
If we get a strong rally RIGHT OFF THE OPEN with the Dow soaring over +80 or more but with the NAZ weak and holding back being only up +10 or less then we better be ready for that rally to fizzle out. Look at TRIN and what does it say? On a set up like this with NAZ weak if we see TRIN above 1.00 this confirms a rally about to pull back. We call this setup "Too Much Too Soon" and it refers to a rally that we had scheduled to occur in our Headline Call or was visible in our Market Force indicators and we alerted you to it but it occurred hard and fast right off the open. These are fake outs and need to be faded almost every time.
As mentioned, be on the lookout for our Headline Call to be off base with a strong gap lower, bad news surrounding the markets, and a Bear Ugly High 5. If we get a lower opening and just slow erosion that picks up gradually, crosses back over the opening, and ends up hitting the B/O as the first Hour One pivot this is usually how the BreakOut buys setup. Good luck.
Value Area: 980.00 - 988.50
Holding above 988.00 is going to be bullish today. If they rally, pull back to the top of the VA and penetrate it holding within the VA for 2-3 minutes then we could see em retrace 75% of the range back to the 983.00 area. Otherwise, if we do get bullish today it is expected that we will leave this price of 988.00 in the dust as the market climbs. Just as a reminder, hard fast rallies early in the session will need to be faded.
Buy Pivot Target: 977.50 - 978.50
Let's go ahead and buy the Buy Pivot target on a slightly lower opening and early run down here. Strong gap openings lower over --6.00 points could be a problem and setting up a Bear Ugly scenario. Grab the buy pivot, use a 5 point stop, and let's see if we can run em up.
Sell Pivot Target: 992.75 - 991.75
Let's go ahead and buy the Buy Pivot target on a slightly lower opening and early run down here. Strong gap openings lower over --6.00 points could be a problem and setting up a Bear Ugly scenario. Grab the buy pivot, use a 5 point stop, and let's see if we can run em up.
10 Day "Pit Bull" Moving Average: 992.20
As discussed above we have the Pit Bull sitting right on this Sell Pivot target area and forming strong initial resistance.
Should we short em here? If we gap up to this price on the opening there will be an initial pullback off this area. But we generally do not trade the opening gaps and early moves. Only when we suggest a Buy/Sell Pivot target do we get in a trade during the first hour. Some claim to have effective sytems for trading all these early erratic moves but most of them are just "action junkies" and are not trading valid, proven setups. Don't get caught up in the first moves of the day. It's mostly just the amateurs who can't hold themselves back and wait for a reliable setup to occur. They "got to get in" because the "market is getting away from me". Can you see? They personalize the entire movements of the market with their inexperienced trading knowledge and emotions. What's the point of this I'll never know.
It sort of reminds me of a kid with his first motor cycle making all these dangerous rides and moves without hardly any working knowledge of the bike or the harm it could do to him.
Pro Trader's Action
We are expecting a rally today. If this occurs it will most likely show up in the form of a BreakOut Buy scenario with a bullish High 5. It could also present itself as a "sneak up rally" type setup. Just keep an eye of the High 5 at the time of the B/O and if they are in following our BreakOut buy criteria then go for it and patiently hold long.
We have given you the caveat warnings of what to look for if I am totally wrong on this so keep all this in the forefront of your trade ideas.
We are on a roll and had a great day on Tuesday so let's go in and nail another 8-10 points today.
I'll be rockin and rollin in the action of course and I'll see you there. All the best, Mohan