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[Dwer]

Market Force: Neutral. Today should be pivotal in determining if we stay in the Sell Mode or enter an aberration on the Sell Mode which would cause prices to "Level Up".




Trade Setup Summary for Friday, June 4, 2004:
No Trades today as we stood aside in position Neutral.

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

Friday, as expected and mentioned in the Morning Call, turned out to be a good day to stand aside from trading. Many factors were converging which could have and did cause the market to basically go nowhere in particular. Here are my comments for the day on the Wrap Up which we do at the close of each day on our Live Update Service.

"We stood aside today when the market gapped up +8 handles higher on the open, ran up higher first and had a very bullish High 5.

Although tempting to short the higher early run up as suggested in the Morning Call briefing we did not see decent risk in the trade on either side of the market.

The market traded in a small 4 point range most of the day so we did not miss anything significant in the action. Prices have been selling off the 1129-30 new high zone and coming into the close the stronger weakness is once again asserting itself. The underlying Bearish Market Force is there.

The Sell Mode appeared to have started yesterday but today's decent bullish action is causing me to look hard to see if we may get an aberration on that Sell Mode and continue higher. Projected goal up would be around 1145.00 if we go into a Sell Mode aberration from this 1121.00 area and the lower projection if we continue with the Sell Mode we are currently in that started Thursday would be 1087.00."


Today's Call & Briefing:
Today is expected to be a very pivotal day in determining if we are going to go into an aberration on the new Sell Mode and rally higher. If we do I am expecting the market to (what I call) "Level Up".

This "Leveling up" occurs when the market will display a very bearish looking appearance and inspite of this there is an underlying, almost hidden, force that wants to push the market higher. The excess bears keep getting cleaned 0ut as they build each day and the (usually) early gap ups or run ups clean them out.

Now this is NOT CONFIRMED YET and although I favor the Bullish side coming into the closing quarter of this year I am not sure if this is going to be a true Leveling Up beginning. We will know more today and it will be confirmed by SEEING THE PRICES CLOSE ABOVE OR BELOW 1121.00. (above being an aberration on the Sell Mode and further higher prices OR closing below and continuing the slide lower towards the 1100 handle).

Now overnight in the Globex, as I type, we are hanging up at the highs created after Friday's close on a gap up to 1127.50 area. What does this mean? Follow or fizzle?

This is where the Neutral reading on the Market Force indicators will be valuable today. Depending on how the market ends up opening up and the FIRST DIRECTION OF THE TRADE we can determine whether the early rally (if the gap up holds) will fade out later in the session (expected) or the prices will continue higher and we will go into a strong aberration on the new Sell Mode.

Overall I am expecting that the early higher prices will fizzle out later in the session and that we will be entering back into the Sell Mode.

I certainly don't mind being wrong on this as I am bullish for the rest of the year but I just am not expecting it to happen just yet.

Once we see if today the indicators will reset themselves and we can start watching the way the day to day sequencing pattern will unfold then there will be more of view of the short term trend. At this point it is just guess work.

WATCH FOR TODAY: If we get the higher early gap up opening and prices run up further in the early session then we most likely will be looking to Sell Short that rally later in the mid session after prices have had a chance to Hang Up at the highs or near them.

If we only end up with a flat to lower opening and an early sell off then the higher prices should continue and most likely we will be entering into a Sell Mode aberration.

The key component to our work which is so valuable is being able to hone in and pinpoint the exact price action which is appropriate for identifying what would have to occur to encourage the Sell Mode or cause an aberration on it. From that information we can then simply continue to trade primarily in the Sell Mode direction or switch gears and tend towards buying drops.

So far the "Pit Bull" 10 day moving average is suggesting the Aberration will be occuring and we should look to Buy Drops on trade above the 1115.00 area. So let's see if the other indicators we use can confirm that same action.

Value Area: 1,122.40 - 1,125.60
Trade that HOLDS ABOVE 1125.00 is going to be positive for the market and falling back into the Value Area but holding 1122.50 is neutral.

Pressing below the VA and below 1121.00 puts the market back on course to the downside to follow the new Sell Mode begun on Thursday June 3.

Buy Pivot Target: 1,119.25 - 1,120.25
No Trade at this target today. If we move down here we are probably going to find some soft support but end up moving lower to stretch for the Pit Bull.

Sell Pivot Target: 1,128.25 - 1,127.25
No trade at this pivot. If we gap up to this price on the open watch for initial resistance at 1132.50 and then moving above that we should see prices jump higher.

If this move is going to fade and return clearly to the Sell Mode then we will most likely see 1133.00 hold the prices back and see em head lower into the close of today. Otherwise if they hold we should be on our way above 1133 to 1142-43.00 shortly after.

10 Day "Pit Bull" Moving Average: 1,114.50
So far, as discussed above, we are holding nicely above this Pit Bull and will be looking to Buy Drops down to this area on a short term intraday moves.

Prices that slowly fade out from higher rallies down to this number with intermittent higher openings and price fades are most likely going to press lower in fufilling the Sell Mode underlying bearish pressure.

The idea is to watch for early lower openings and quick pullbacks that run up higher again to discover that we are in a new bullish move higher with the Sell Mode in aberration. Usually the higher openings and early rallies we see are not that conducive to an overall move up short term.

Pro Trader's Action
The market is in a Limbo place right now showing some encouraging bullish signs but with my 18 proprietary indicators telling us we are going to continue in the Sell Mode holding below the 1121-23.00 zone.

Today will be instrumental in giving us important clues.

We will most likely continue to trade on the Sell Side as that has been the most profitable for us this last few weeks in line with our TCF2004 system.

Trading the S&P500 is an amazing and tricky way to trade the markets. Conventional trading wisdom often finds it hard to understand how we can be making money on the sell side since the market has pushed up quite a bit from the lows of Mid May around 1079.00.

That is just the nature of S&P500 trading. The most important key is having a precise system that shows one how to do that. On our 21st Century Futures site home page we offer a tremendous amount of information on how you can learn to trade the S&P500 futures.

I have also recently started a Live Update Service in which I make live intray commentary all day along with exact trades, Market Profile/Value Area directional bias, Trailblazer Floor trader charting methods as well as our Market Force indicators and High 5 moment to moment analysis. In the last 27 sessions of Live Updates we are up about 100% on day trading margin or about 41 S&P500 points. Now remember, as required by the regulators I want to say that past performance is not indicative of future results and there is rek of loss trading futures.

All the best of luck and success today. Your trading friend, Mohan