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

[Dwer]

Market Force: Bearish. Keep selling rallies as market looks to make new washout lows. An early drop today down to the 1111.00 area should signal a reflex bounce reversal up.


Trade Setup Summary for Tuesday, July 6, 2004:
B@1116-17.00/ S@1113.00 3-4 pts. loss.

Recap of Tuesday's Action:
Good Morning and Welcome to Wednesday's trading action.

Coming back from the holiday weekend saw the markets continue to act very bearish in the Sell Mode we are in.

I was expecting a bounce off of the Hour One low today which never really materialized in a decisive way. We got stopped out by just 2 ticks trying to hold long. Here are my comments from the Wrap Up on the live service.

"Today's market showing was very bearish especially for a Monday following the Independence day holiday.

I wanted to get long on an early drop near the Hour One low at 1117.75 with an already gap lower opening. There were some tech problems with the cable high speed I use but was able to post that we wanted to buy the market near 1116.00 with a stop at 1113.00.

We got that long entry with prices hitting 1117.50 and lower. Prices just stalled at the lows and started pressing lower. Hours later they finally punched through the 1114.00 area which was holding and hit our stop at 1113.00 knocking us out for a 3-4 pts.

Later in the session after toying with the lows the market did take off and move up to 1119.50 but later fell off again. So holding long OR short today below 1117.00 was a difficult trade. It appears to me that we are going to get one more strong push lower tomorrow and will be adjusting our strategy accordingly."

Today's Call & Briefing:
The Market Force readings are calling for one more weak day lower today.

Because we have had 3 days down so far there is a strong chance of a decent reversal move up off the early lows if that is what we get first.

If we open flat to slightly higher and try to rally first today we are most likely going to see some more sell off from the early pop.

For today we want to ideally see the market sell off early and we should get a stronger reaction to the upside today off the early lows.

Yesterday on Tuesday the market bounced off the extreme lows below 1114.00 just up to 1119.50 which is an area to watch for today.

If we get another strong washout low today moving towards 1111.00 (which was the projected bottom for yesterday with low coming in at 1112.50) then we should get a cleaner bounce.

But overall we are expecting ONE MORE WEAK DOWN DAY for today's trade.

We still would want to hit the BreakOut today with selling if that is the first pivot hit of the Hour One's. Especially on a fast early move higher look for the selling to come in after the reflex excitement wears off.

Today we will take a close look at the High 5 to be sure we are giving the market enough room to top or bottom. Yesterday we saw a gap lower move by -6.00. Usually when that occurs you can buy closer to the exact B/D and get the bounce as the market has already shaved off a lot of points early off the open.

Because we are in a Sell Mode the market is gettig hit harder. We are at the stage today where there will be an attempt to rally that should get pounded back down lower. Thursday would most likely stage a more solid rally.

Value Area: 1,114.50 - 1,119.10
Watch this 1119.50 area near the top of the Value Area as first resistance.

This area is also tied in with the Sell Pivot Target area.

Because we are close to this price zone overnight here on Globex we may need to consider the +4.25 (1124.00) as a more likely target on a rally up.

Buy Pivot Target: 1,111.50 - 1,112.50
We will be looking for an early drop after the first hour to tie in with a buy in this 1111.00 area.

Below this support comes in at 1107.25 and as mentioned yesterday the first major goal lower of this Sell Mode is 1101-2.00. This would be expected after some reflex rally period today and tommorrow.

Sell Pivot Target: 1,119.75 - 1,118.75
Watch this zone of 1120-24.00 for prices to get hit with selling. We would expect an attempt to move higher today and should the High 5 be really strong then caution would be in store for a BreakOut Buy. I don't expect this today but we always need to keep it in mind.

Today is expected to reflex bounce and create a weak day lower.

10 Day "Pit Bull" Moving Average: 1,133.10
We are well below the Pit Bull and the rallies are getting hit. Prices are moving a bit too far away now from the Pit Bull and this is often a sign we are getting overcooked to the downside. Just one of many clues.

As we start moving towards 1102 area and more panic begins to set in then this gap should sufficiently widen to get us to look at a reversal to a new Buy Mode.

Pro Trader's Action
What we care about daily here on the Morning Call is making nice trades where we can scalp 3-5-8 points.

The Hour One pivots are starting to come back into play more and more but to trade them requires a slightly different insight then we used in 2003. The BreakDowns have been selling off strongly now for several months and this was rare in 2003. At this point in time we are seeing a combination of strong BreakOut Buys off the Hour One highs AND hard sell offs on the lows.

The key now will be to watch the High 5 and guage those days when we are seeing the Trailblazer patterns stall on reversals of a one way bias. This has lately been one of the best indicators of all. Surely it can be difficult to reverse sometimes when you put a position on but this is one of the keys to S&P500 trading and Trialblazer can give us this information.

So for today if we hit the Hour One low again FIRST we should see a more decisive, clean bounce. Most likely we are going to head for the highs first and if so we will want to stay on the Sell side as we get one more push lower.

Good Luck today and I'll see you in the action. Mohan