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[Dwer]

Market Force: Neutral/Bullish. Be careful today as the trading action today will be pivotal going forth this week to determine if we have entered a new Buy Mode which we suspect we have. FOMC Tuesday cast confusion on both sides for today.

Trade Setup Summary for Tuesday, May 4, 2004:
No Trade action on Tuesday due to FOMC meeting.

Recap of Tuesday's Action:
Good Morning and welcome to Wednesday's Morning Call action.

Today is a big CAUTION day as we are right in the middle of limbo as far as the Market Forces are concerned.

The roller coaster Full Moon ride on Tuesday you would have thought to have been met with a solid bullish appearance but we had both sides of the market showing power.

I expect from reading our 18 proprietary indicators that the market has rolled into a NEW BUY MODE NOW but today will be vital to see if that is the immediate case.

Most of the evidence is there for this but I suspect there could be ONE MORE STAB AT A WASHOUT LOW before they start really cranking higher. Important evidence will be there TODAY in the numbers, the candles and the way the Trailblazer patterns respond to the Market Profile/Value Area numbers.

Here is a recap I did on the close Tuesday in our TCF Live Update Service.

"The Market got good news of interest rates being raised only gradually over time by the Fed and this created a bullish mood in the markets.

The S&P500 had moved lower earlier in the session to attempt to test the lows of Monday but stopped short just above that area.

Later in the last hour after the market ran up and tested 1127.00 (just above the Pit Bull at 1124.90) a sell off to the 1119 area came in and pushed lower finding support at around 1115.00.

This is our view is a market looking for a bottom in here. From the large up spikes you can see around 2:15 est this explains why we generally avoid the trade on these FOMC meeting days. Today was also a full moon which usually adds to the erratic volatility of the markets due to the effect the moon has on peoples/traders minds.

Today's Call & Briefing:
Our Headline Call and Market Force indicators are calling for a Neutral/Bullish underlying market today.

We want to be a bit extra cautious as we are in the middle of a rollover to the new Buy Mode and I am concerned there may be one more washout low coming in before we kick in fully to the upside.

Another side of my intuition says that we are now in the Buy Mode and ready to move higher. The important reaction to certain proprietary indicators, pivots and especially the way the Trailblazer patterns act today should give me enough information to determine the true case after the close today.

So we will be moving ahead and trading but just a little less tolerant of any trade that doesn't cooperate with us right away...IE: I don't want to waste any money or very little on a stop if we cannot get a clear setup on a particularly MURKY DAY.

We want to observe the High Five today and see if the market gives us A MEGA BULLISH READING AT THE CLOSE OF THE FIRST HOUR. If so we need to prepare for the possiblility of BreakOut Buy with the Dow under +60 but with NAZ really strong over +15-20 after the first Hour. We would look to be buyers on a set up like this.

If we hit the lows after the first hour today and the High Five is noticeably A BEARISH MESS then we may get that final washout today pushing below 1110.00 and maybe testing 1104-6 again before forming a bottom.

Value Area: 1,114.20 - 1,119.00
We are hovering BELOW the Value Area in the overnight Globex trade and this is a weak sign.

Watch for a lower move that climbs back into the VA above 1114.25 WITH CONVICTION today to be a bullish sign. Moving above 1120.00 should get us going for a stretch up to challenge the Pit Bull again...today at 1125.00.

They couldn't hold above the Pit Bull on Tuesday so a return there today means most likely they want to blow through it to the upside.

Buy Pivot Target: 1,108.75 - 1,109.75
No trade directly at this target but watch for Trailblazer formations here AFTER THE FIRST HOUR. Compare with the first hour low and stack that number up with this and the -4.25 stop/pivot at 1104.50 to find a support zone.

Sell Pivot Target: 1,124.75 - 1,123.75
This zone up here presses against the Pit Bull and if we get up here with a Mega Bullish High Five then we may pop through the Pit Bull and HOLD ABOVE IT.

That would be our first clue for a trip up to test 1142-44 real soon...not necessarily today though. If this type of action occurs it is expected we will see new highs very soon as we move towards 1160 after crossing over 1144.00 solidly.

Can the World Political mess we are in support higher prices? It appears the market has already DISCOUNTED the problems out there otherwise we would be trading at Dow 9000 or lower.

We are going 15% higher this year most likely with a back end loaded rally year.

10 Day "Pit Bull" Moving Average: 1,125.00
We discussed this above. Let's see how the market treats this number today. Either way we will be there to trade the action...bull or bear doesn't really matter to us.

Pro Trader's Action
The Market Force indicators are bullish but today is tempered with Neutral due to the wild ride on Tuesday. We need today to confirm if we are going to start pushing higher in the new Buy Mode or if we get one more lower washout first to really lock in the Perma Bears.

That would actually help the bullish case but we also may be in for one of those bullish type enviroments I call..."Leveling up".

This is where everyone remains skeptical or bearish while the market moves up mysteriously in CHUNKS or Levels.

Not sure if we are quite ready for this but the writing is on the wall from our 18 Proprietary indicators.


All the best of luck and success in your trading today. Mohan