Trade Setup Summary for Wednesday, July 23, 2003:
No TCF Trade Set ups occurred today.
Recap of Wednesday's Action:
Good morning and thank you for joining us today.
Here is a quote from "Dancing with Lions" by Trader X. I highly recommend this book for study by all serious students of the Market Call for getting your head on strait for becoming a strong S&P500 futures trader.
"Dancing with Lions is the process of getting to the point where you can begin to see the true nature of reality. Doing it in a way that is completely divorced from your perception of what that reality should be, always attempting to adapt your self to that reality as it unfolds around you. Once you begin to discover that, you can begin to exploit price action in any market in any time frame. You will never arrive because that reality is constantly being created differently by those who participate. Therefore, you must be constantly creating differently as well. Otherwise, when you dance to the wrong tune with the Lions, you will get eaten.
The sum and substance of Trader X statement in our understanding is that in simple terms...You must always be FADING (means going opposite of) the current consensus reality in the exact moment of the time frame you are in.
IMPORTANT NOTE ON TRADER X AND RECOMMENDED TCF READING: I was very surprised and actually quite amazed today when I was assisting a trader who emailed me asking me where to get the "Dancing with Lions" Book by TraderX. Here's why! What I discovered is that although this book is hard to find if you go to
www.amazon.com , then go to Book Search and type in "Dancing with Lions" the book will come up and you can order it. Now here was the mind blowing thing for me. When you see the book there and click on VIEW PRODUCT DETAILS it lists MY EXACT TOP 5 RECOMMENDED BOOKS right below it in the "if you like 'Dancing with Lions' you will like these other titles section". My God, all of my EXACT top 5. Is that a coincidence or is it like our call for the 2:00 drop on Thursday? Magic creates more magic. Sometimes the universe is an interesting and rather unusual place.
On our Headline Call for Thursday we were calling for an early rally that would "hang up" near the higher third of the range and then fizzle out (pull back) later in the afternoon after the 1:30-2:00est time period.
That is the EXACT action that we got. There were no TCF Trade setups on Thursday although we did have a very good example of a "Too Much Too Soon" type setup. The problem was we missed hitting the BreakOut by a small margin in order to get short officially.
The BreakDown occurred later in the afternoon after the 2:00 market melt down we had warned you about and our experienced subscribers know that we do not take TCF trade setups after the 1:30-2:00est. time zone. Some of you emailed that had gotten short around the 994.00 area and sweated it out waiting for the pullback and you nailed 10 handles. Although that was not an official TCF setup you had the right idea overall of shorting the "Too Much Too Soon" early rally action and were rewarded accordingly. Kindly place some of that dough$ in your personal "Send Mohan to Maui" fund and I'll get back to you later in December when I take my vacation? You do have your "Send Mohan to Maui" fund started don't you? Uh....well, OK. I'll just hitchhike. How about Cabo San Lucas?
It appears the those Mutual Fund managers got a clue and took Ol Mohan's advice and let some of the air out of their tires on a portion of their holdings or something. LOL!. Maybe while the Boss is away they had a 3 martini lunch instead of the usual 2 limit and got a little carried away but either way it was a decent size pullback and sets us up for today's Headline Call.
The market exhibited basically a bullish/neutral type High 5 for most of the day and we saw the TRIN start to rise pretty quickly as we started approaching the 2:00 est hour. There were other hints in our proprietary indicators that they were going to smash em after 2:00est but our overall rule is to stay out after 1:30-2:00. Let's see what we can get going for today.
Today's Call & Briefing:
Our Headline Call for today is to look out for a further drop in the markets and possibly a Bear Ugly day. Our TCF Market Force indicators suggest that we could plow through the support of the 977.00 area we hit the last few days and stretch lower to the next level of 948-949.00 zone. The pit stops along the way would be at the following prices: 977.00, 973-74, 968.00, 961.00, 955.00 and then the 948.00 area...Yikes!
I obviously don't think this is going to occur today and we may get some kind of turn around in the Market Force indicators after today's action combined with the weekend action but these lower level figures are a strong possibility. The early rally on Thursday saw the TICKs banging on +1000 TICKs 3 times in the early session and then when we saw the sell off later they were hitting --1000. So because of this there is a strong chance that we may just have this one strong, down day and then open up to the upside again with the typical summer range bound activity.
Remember, these large Mutual Fund Portfolio managers are all on vacation practically and they do not take kindly to any emergencies while they are away so the big boys in cahoots with them try and keep things steady until everyone has had a chance to "cool their heels" at their summer vacation pads. I'm serious.
TCF TRADE SETUPS TO WATCH FOR TODAY: As mentioned in the Headline Call, be on the lookout for a Bear Ugly day. Just remember that these initial Bear Ugly signals OCCUR ON THE OPEN with a gap down (usually) and some bad news that gives the market a really heavy feel to it. A Bear Ugly day is NOT JUST based on the High 5. The High Five will exhibit the characteristics of strong bearishness but we are going to look for this to be fully manifest AFTER the first hour. If you see the TRUE Bear Ugly setup occurring then prepare to "Front Run" the market and get short BEFORE the first hour is over. It is not necessary to do this to make a winning trade on the Bear Ugly setups but if you are ASTUTE, understand our Market Call briefings extremely well, and have done it before, then go ahead and attempt a Front Run short if it sets up that way. Good luck.
If the market opens flat to slightly higher or lower and there is SLOW EROSION but not a Bear Ugly, heavy market that is getting hammered, then be ready to Buy the BreakDown if the High 5 are not Ugly at the time of that B/D. This is only valid also if the B/D is the first Hour One pivot hit.
We will want to Sell the BreakOut if we get a set up for it. Make sure the NAZ is weak being up +10 OR LESS in order to sell the B/D and that the situation is NOT calling for a Buy the BreakOut setup. You can study and memorize these setups by thoroughly reading our S&P500 Trading Handbook.
JOIN US TODAY WITH A SUBSCRIPTION AND GET INSTANT ACCESS TO MY TRADING HANDBOOK. USE THE LINK AT THE TOP OF THE PAGE AND LET'S MAKE SOME DOUGH$ TOGETHER RIGHT AWAY!
Value Area: 988.50 - 997.50
We have now pushed substantially below the Value Area and this is bearish. Any attempts today to stretch back up into the Value Area early on should get hit with selling unless the High 5 are real bullish for any reason. We are looking for one more blast lower to finish off the current LSS pattern we are in. If for any reason they smoke em up higher today (not expected) then we should revisit these lows mentioned above on Monday or Tuesdays action of next week.
Buy Pivot Target: 973.50 - 974.50
No trade here today. There is a good chance on a lower opening and early run down here they will bounce but we try and stay on the side of the market that the Headline Call is suggesting when we write up these daily Market Call briefings. In this way there is consistency. Now, as most of you know, we do not have a problem buying if our Headline Call is bearish but we do that when we are there in real time with the High 5 readings in our face so we can see what is going on. Watch the --4.25 stop/pivot at 969.25 for support under this Buy Pivot. Blowing through that sends em down to the 968 and then 961 lower goal mentioned above.
Sell Pivot Target: 992.50 - 991.50
On a higher opening let's go ahead and Sell the Sell Pivot target. Use a 5 point stop and see if we can take em down to the next lower level.
10 Day "Pit Bull" Moving Average: 990.10
Although we left the Pit Bull in the dust Thursday we have to understand that according to our TCF rules we are still on a CROSSOVER ALERT because we closed within 10 handles of the price. So let's just be aware that they may run em up there and attempt a crossover again. Actually, with the Pit Bull and the Sell Pivot target forming a double wall of resistance this makes it an even more appealing short up there. If we get a Bear Ugly day today we are going to leave these numbers far behind as they crunch em lower.
Pro Trader's Action
Our overall plan today is to prepare to get short somewhere. That will either be on the B/D on a Bear Ugly type setup with strong symptoms of this off the opening OR we will get a BreakOut attempt that will fail up around the Sell Pivot target/ Pit Bull area in the 990-993 zone.
Just remember, if the Dow is Flat (being up +50 or less) and the NAZ is strong we could be setting up for a bullish BreakOut and our Headline Call is going to be off base. I always try and give the alternate warning and show you the appropriate things that would occur if this was to happen. It's not a hedge or anything but just a roadmap of what to look for if we ARE going to be wrong.
Good luck today in your trading. Work hard, study trading psychology with one of the best books out there "Dancing with Lions" and the others listed on Amazon.com as shown above, and bring out the WINNING TRADER WITHIN. I know you can do it and I am here to assist you in any way I can. You have got to get it straight though that IT IS NOT ALL ABOUT METHODOLOGY.....It is about YOU and your skill development in finding your way around "the fastest game in town" the S&P500.
Your trading friend, Mohan
Enviado: 28/7/2003 1:28