João Leão: Economia precisa de imigrantes (e não só dos qualificados)

[Dwer]

Market to sell off later in the session today on a higher opening and early morning rally. If we get a lower opening and an early push lower FIRST then prices should continue higher today.

Trade Setup Summary for Friday, October 24, 2003:
3 Trade possibilities of TCF Setups that occured:

1) Buy Buy pivot Target at 1023.50/ Cover at B/O 1026.50 for +3 pts.

2) Sell B/O at 1026.50/ Cover for up to +8 pts.

3) Buy B/D or lower (-2/4) for up to +8 pts rally into the close.

Recap of Friday's Action:
Good Morning and welcome back from the weekend.

We had an exciting Friday trade session with all 3 of the various TCF setups occuring which has been rare this last year. In the past this type of action was a more regular occurance and I hope this is a sign of things to come. As the ranges expand some we would expect to see days like this regularly where both Hour One pivots are hit.

As shown above on the chart and the TCF Trade setup summary there was a small move up off the Buy Pivot target which we had recommended to the B/O, a sell off from the BreakOut all the way down to our target low we had mentioned several days ago at the 1015-1016 area, and then a strong rally off of that 1016 area into the close. The BreakDown was 1021.50 which held a 6 point stop and successfully moved 8 points higher into the close.

Our Headline call was fufilled nicely as we were looking for a rally off an early selloff that occured first in the market repeating Thursday's action. The action on Friday however gives us a mixed picture for today.

Today's Call & Briefing:
Today I think could be a bit challenging (which day isn't in our business of trading the S&P500) as the late afternoon rally left some unfufilled downside closing action which we expected to finish off a cycle pattern of the Market Force indicators. Hence the double sided Headline Call which we occasionally offer when the market sets up this way.

We will be looking for the markets to possibly OPEN HIGHER today and then stage an early rally. If this occurs it will ultimately be bearish for the markets action for Monday and Tuesday. If they open lower and move lower first then we should be able to finish off some of the bearish early test of the lower numbers again below 1021.00.

If this occurs this would lock in a substantial amount of bears confident we are going to "crash" and this would give the market continued force in the current Buy Mode we are in. There is a lot of fufillment to the upside waiting and the key is to see how the Bearish traders react to the rallies both today and tomorrow.

So overall we are expecting the downside has some more fufillment on those lower numbers and after that is fufilled the upside is expected to resume.

TCF TRADE SETUPS TO WATCH FOR TODAY: let's first watch for a higher opening and an early rally to be bearish for the market. If that occurs then we will be on the lookout for the BreakOut to occur first and to look to short the BreakOut. Most likely we will want to add 2-4 points to the B/O depending on how the High Five are reacting.

If we get a lower opening and an early drop back to test the lows below 1021.00 area or lower then the S&P500 prices are expected to continue higher gradually.

We want to be just a bit more cautious today then normal as the pattern we have left over from Friday needs to be fufilled to the downside. With the markets holding flat to steadily higher we could see 2 more days to the upside now that the 1015-16 lower price fufillment area has been tapped.

Today will give us many more clues as to how to determine the market bias a bit more clearly.

Value Area: 1,020.70 - 1,028.70
There is a good chance we may just hold in the Value Area today depending on the opening action and first 20 minutes or so of trading. This is one of the reasons for the caution. If the market does get caught in just trading within the VA then the action could be a bit choppy. Using this zone as a gauge for direction today we will have a better clue tomorrow.

Buy Pivot Target: 1,020.75 - 1,021.75
No trade at this Buy Pivot Target today. Watch for support here.

Sell Pivot Target: 1,034.50 - 1,033.50
No Trade at this Sell Pivot target today but watch for resistance especially at the stop/pivot target at 1038.75.

10 Day "Pit Bull" Moving Average: 1,040.10
We are not quite on a Crossover Alert with Friday's close so I am not mentioning it. As long as we get resistance up at this number they should continue to push lower off of this zone until we fufill the pattern.

There is a chance we could get a bit bullish over the next few days but find prices stalling at this number after they attempt to BreakOut above it. This is the likely scenario until we can get one good washout day with prices closing on or very near the lows for the day.

Pro Trader's Action
Let's look to be a little bit more cautious than usual today. Watch the opening for a clear pattern to trade off of as described in the Headline Call.

If we get a higher opening and an early rally that is going to be bearish for the markets later in the session. If that occurs we would be wisest to wait until later in the mid session and let the early rally play out some. Depending on which camp the traders get overly confident in will allow us to determine more as to which way the market will move.

Good luck today and let's see how they open up. All the best, Mohan