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[Dwer]

Lower opening below 994.50 and lower early drop to be bullish for a rally to mid morning session. Weakness expected in later session. A higher opening and early rally should drive prices down to test first support at 985.00.
Recap of Friday's Action:
Good Morning and welcome back from the weekend. Hope it was a relaxing for you.

Our Headline Call on Friday was looking for higher prices IF we got the lower opening and early drop. We had mentioned that if we did not get the lower opening but early lower prices we would expect at least a bounce off that lower early action.

Well, we had a slightly higher opening of around 2 handles which sold off rapidly, found some support and then headed north to hit the BreakOut first after the Hour One had transpired. With the Bearish/Neutral High Five and no sign of a BreakOut buy we had to sell em there. This B/O turned out to give TCF another bit of bragging rights for HITTING THE TOP TICK AGAIN FOR THE 9TH TIME SINCE STARTING OUR SERVICE JUST UNDER 3 MONTHS AGO. The BreakOut was 1001.75 and they ticked through that by one tick forming the top and then falling back to the BreakDown where you would have wanted to cover up the short.

The BreakOut occured first at 10:38est and you had 4 more chances to nail it at 11:06,7,12 and 13 est. Prices backed off with the bearish High Five and they hit the B/D as mentioned at 995.25 where you had a chance to cover em up and a bit lower for +6.50 points.

On Friday's when a nice trade like this shows up I will usually call it a day as Friday's tend to be a bit erratic with larger traders position squarring for the weekend. This often gives it a similar appearance to these Option Expiration days.

So a decent day overall fading our Headline Call direction but with the correct parameters of a higher opening and a bearish/neutral High Five.

Today's Call & Briefing:
For today we are mostly looking for further price erosion. Our Market Force indicators, which are in the process of "rolling to Bullish", are working on the downside to create the rollover. We are seeing that some first level support would come in at 985.00 and that is expected to show up pretty soon here. If we get the higher opening today and an early rally up then we are expecting prices to fizzle out below Friday's lows getting into the 980's. If this scenario pans out then we would look for further weakness and lower testing on Tuesday with the stronger bullish rollover coming in on Wednesday's action. It is these times in the rollover period of our Market Force indicators where we often see that the stronger the rollover will be, the more erratic and "panic oriented" the push on the opposite side will be. That translates for us now into the strong chance of rather scary drops off the rallies that do show up today and tommorrow. This type of trading action is necessary to LOAD THE BEARS INTO THE MARKET. Right now there are too many bulls complacently expecting a rally to occur. They are a bit early.
TCF TRADE SETUPS TO WATCH FOR: If we get a lower opening and early drop in the markets then we will be looking to Buy the BreakDown if the market is NOT Bear Ugly. Expect on a strong move lower for us to have to consider subtracting 2-4 points from the B/D to get long IF the High Five are real bearish. No trades at the Buy/Sell pivots today but just an observation of how prices react to them. Watch the lower -4.25 (987.50) to catch and hold support of prices for a rally today off these lows. If we hit the BreakOut FIRST today of the Hour One pivots then we have to be on the alert for the strong possibility of a BreakOut Buy. Now we are looking for weakness later in the session BUT we IF this B/O is hit first (and they are setting up for a Buy with a strong NAZ above +12-15 points and the Flat Dow below +50 with TRIN under .80 and VIX lower) we gotta buy this setup.

Value Area: 996.00 - 1,000.00
We can use the Value Area today to alert us to the weakness we expect later. If prices open higher OR rally off lower early prices you can watch for the prices to get into the VA and then find resistance at the 1000 handle If this does setup this way then we would find a weak High Five and general sloppiness in rally attempts to drive em back to the lows and testing that 985.00 area.

Buy Pivot Target: 991.75 - 992.75
No trade at this target. See information above about the stop/pivot.

Sell Pivot Target: 999.75 - 998.75
Here is the Sell Pivot Target up at the 1000 handle area and this could be coordinated with a BreakOut price that is hit either later in the session. Let's see how prices react to this area in Hour One and be willing to sell if they move lower FIRST then head back up to test this area. The idea being that lower prices will try and rally with the excess bulls getting a little confirmation of their bullishness only to have it shoved down their throat later in the session as the bears take over.

This can be a tough business no doubt. If you don't have that kind of killer instinct you probably don't belong in this S&P500 trading business. It can often be very similar to professional football. You really shouldn't enter that business if the idea of possibly breaking an arm or leg bothers you. Similarly, in S&P500 trading sometimes your best and most intellectual intentions can be cruelly slammed back in your face as the market decides you are on the wrong side of the market. You have to be willing to face and handle that EVERY DAY in this line of work.

10 Day "Pit Bull" Moving Average: 1,018.20
We are in "Sell Rallies" mode as the market has dropped and held below the Pit Bull. As mentioned above we are looking for a turn around to the bullish side soon after some further downside hammering.

Pro Trader's Action
Because we are on the verge of a rollover to the bullish side yet there are still too many bulls in the market it will be necessary for the market to create a rather scarry bearish looking situation. Don't be too excited about this or let this turn you into a "perma bear" as it is just the cleansing out of the overly confident bulls. Just monitor the High Five and the TCF Trade setups and let's stay on right side of whatever is occuring.

We have had a good month with the TCF setups producing nearly 50 handles in a very flat, go nowhere type range month with the S&P500 futures in about a 40 point range and about a 300 point Dow range. Let's finish off the month nicely and get the October off to a good start this week.

Remember to have fun while you trade inspite of all the tension and high speed envirmoment we have to function in. Don't mistake "Fun" for false elation. Trade the TCF setups with precision, professional patience and determined detachment.

Those of you whom I look forward to welcoming to San Diego this coming weekend can look forward to beautiful weather at the best time of the year here. We are going to be right on the bay across blue waters from SeaWorld and the Pacific Ocean. The Catamaran has a beatiful tropical enviroment and great scenery. If you get a chance try and pick up the book "Pit Bull" by Marty Schwartz to read on the plane in preparing for this seminar. He had a very strong military background and used to crunch all his numbers by hand each night. Marty used to put on 500 S&P500 contracts when he took a position and was an S&P500 work a holic. Just like us here at 21st Century futures.

Look forward to seeing you in San Diego.

Let's see which side of the market the TCF setups will get us on and hope these ranges keep nice and open. We love volatility as it's our lifeblood in this S&P500 trading.

I'll see you in the action. Mohan