APB: Venda do Novo Banco "valoriza o sistema financeiro"

[Dwer]

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[Dwer]

Market Force: Bearish with prices holding below 1128.00. CAUTION:on a lower opening and early drop we would expect to see a rebound off the early lows.

Trade Setup Summary for Friday, July 2, 2004:
No Trade recommendations for Friday

Recap of Friday's Action:
Good Morning and welcome back from the weekend. I hope it was a relaxing one for you.

This week should prove to be very interesting as several forces come together which should affect the markets.

We will be looking to see if the raising of interest rates by a 1/4% and the turn over of Iraq back to their government will be met with "factored into the market" sentiment or a feeling of insecurity for investors with the continuation of the Sell Mode we have been seeing.

The key right now to see the Sell Mode continue will be for prices to HOLD BELOW 1128.00.

If indeed we see the presistent pressure on rallies just above this that keep pressing prices back below 1128.00 it will be a sign that we are on our way to the next target lower...which is 1111.00. Below that is 1102.00.

Interestingly enough we have had 2 stabs at the exact same low last week of 1122.50 on Thursday and Friday which sets up this number as key support for now. Blowing through this number will start the pressure towards 1111.00.

Today's Call & Briefing:
Our Headline Call is very specific today because as we head into the new month and complete the 4th of July holiday the Market Force is at a Crossroads.

We are calling for the Bearish Sell Mode to continue with prices holding below 1128.00 but urge CAUTION if we see an early drop off of a flat to lower opening.

If this occurs we will be preparing for a decent REBOUND (bullish bounce) off of the early lows. There is a good chance we could see a panic-washout type drop early too and the idea of buying would seem difficult but with the last 2 days of extremely overcooked TRIN above 2.10 we would take another 2.00+ TRIN as a washout low sign.

If we get more of a flat, mild opening and range bound trade then we are going to look to stay on the Sell side on a higher move earlier. However, today being Monday we may find that we will stay on the sidelines until after 11:30est in order to let the early higher prices sort themselves out. This would also give us ample time to really watch the High 5 for clues of clear bias.

There is no fundamentally strong evidence of a bullish move today with the rather tepid response to the Independence day 4th of July Weekend. Usually in a bullish environment this weekend shines very bright to the upside and what did we get....2 days of sell off. Plan on this continuing down to 1111.00 at least.

Value Area: 1,124.00 - 1,127.20
This range should be a good measure today as far as bounces off of lower early moves or seeing a higher early run up fall back into this range.

We want to let the volume come back into the market and give some strong bias clues so we may be waiting to trade until after 11:30est.

Buy Pivot Target: 1,122.50 - 1,123.50
Here is that support we have had the last 2 sessions. Below this is 1118.25 (-4.25 stop/pivot) but on a trade below this we are still in the Sell Mode process which should take us down to 1111.00 and then 1102.00 before washing out.

Sell Pivot Target: 1,129.25 - 1,128.25
This zone is important but with overnight globex trading in the 1127-29.00 zone the more important resistance is 1132.50.

IF we get the early run up on a higher open above 1126.00 then we are going to let the market attempt to BreakOut and see how much backing it has. If this occurs the most likely scenario is that we are going to be shorting such a move for a continuation of the Sell Mode heading below 1118.00 towards 1111.00.

A strong, Bullish High 5 with the Hour One B/O getting hit first will get us buying for a rebound positive start to the week. This is very possible after 2 days down. The question remains....where is the truly bullish bias coming INTO the 4th of July weekend? That was an important missing element to the bullish picture.

10 Day "Pit Bull" Moving Average: 1,134.50
If we rally there will be strong resistance at the Pit Bull here.

Watch for a BreakOut to carry us up to the 1132.00 area possibly and then a slight attempt to move above this getting hit with selling.

We need to watch the bias of the tape up here if we get there and any "surprise" good news engineered into the markets to attempt to counteract the massive national shock reaction to Micheal Moore's "Farenheit 911" film I told you would occur (but suspect most didn't believe me that it would have such an impact)...Hmmm...2 day early turn over of Iraq Government? Timing?

Pro Trader's Action
We are at a very interesting point in history and indeed this affects the stock market. Unfortunately it is a very difficult period to predict what will occur.

I have been underlying very bullish since the exact beginning of the Iraq invasion and it is all archived here in these Morning Call briefings. I have stated that I expected a Back End loaded bullish market in 2004 for this Presidential Election year cycle way back during the days of the Iraq invasion...long before it was vogue to think this way.

I want to state now that I am not so sure of this year concluding in a true bullish form and it may end up an exception to the "Presidential Year Cycle". I am not throwing in the towel totally yet on a bullish conclusion to this years Stock Market but there are some incredibly important bits of information that I am researching which could splash some serious water on the bulls. This is information not yet recognized by the investing public and I will keep you posted along the way as I find out more.

The fact is we are intraday traders... today and tomorrows trade is really our only main concern.

Look for a lower opening below 1126.00 and an early drop to get us looking at the lower range for a buy signal rebound and if we get a higher opening 1126 and an early rally attempt we are going to let the higher prices play out and get short most likely later on in the session.

All the best of success today in your trades. I'll see you in the action. Mohan