Mohan 20/07/04
Enviado: 20/7/2004 13:32Market Force: Neutral. Expect one more weak down day today with continuous attempts to rally like we saw on Monday. CAUTION: Greenspan talking for 2 days.
Trade Setup Summary for Monday, July 19, 2004:
1)B@1100.75/ S@1096.00 -4.75
2)B@1097.25/S@1099.75 +2.50
TOTAL: -2.25
Recap of Monday's Action:
Good Morning. Today Greenspan is going to be talking about the markets. This can often create a sort of "edge of the seat" type trading environment as traders hang on his every word looking for surprises or hints of future interest rate moves.
We will watch the first hour or so and possibly be willing to stand aside more as the Market Force is Neutral yet we are expecting one more day down so it could be tricky.
Our Headline Call on Monday was looking for strong Bullish Market Force either off the open or on an early low. Things were more bearish then expected and although we got the very strong buying surge later in the session...it fizzled out back below the 1100.00 handle.
Here are my closing Wrap Up comments from our Live Update Service.
"A challenging day today as the Market Force was giving clear signals for a higher move off of the early lows.
We got long just below the Hour One low at 1100.75 and held the trade through a small rally to 1104.50, a pullback, and then a deeper pullback as the High 5 went very Ugly with TRIN above 1.50 and Nasdaq moving lower after being flat.
We had our stop at 1095.00 and after a move to 1095.50 got out at 1096.00 for a -4.75 loss. After waiting some time I gave a signal to re-enter long at 1097.25 and we waited patiently again for higher prices.
Around 2:05 est the market took off to the upside and we had pegged the 1105.50 to 1106.00 area to take profits. Prices rallied to 1105.00, stalled and hung in the 1103-4.00 area. Trying to hold out for another pop up higher we saw prices slowly drift lower and then spiking lower creating a bit of frustration as we drifted back to the 1100.00 handle.
I waited for an attempt to rally again off of 1100.00 but 1101.50 was all they could muster. On the next dive below 1100.00 we sold the long and took profits of +2.50 at 1099.75.
It was one of those days that could have easily pressed higher again but the selling has been a bit relentless as of late. So on balance -2.25 for the day on the 2 trades."
Today's Call & Briefing:
Today has got CAUTION written all over it. We've got Greenspan speaking, the Market Force is neutral and we are expecting one more weak down day to finish off a day to day sequencing pattern.
All of this spells opportunity with caution.
If we get a flat to higher opening and prices fail near 1103.00 then we should slowly drift lower as the day wears on and Greenspan makes his various comments.
If we can press above 1104.00 and this price is above the opening price and the High 5 are in relatively bullish shape we could see prices rise and the Bullish Market Force come back to life again like it did in a big way on Monday off the early lows.
There is enthusiasm to buy but I think it may be still premature and a bit more bottoming is needed. But we are very close.
Not expecting a BreakOut buy today. Look to keep selling rallies for today on any early higher openings with Bearish/Neutral High 5 readings.
Value Area: 1,099.00 - 1,104.20
This small Value Area zone today will be important for viewing the Market Force today.
There was double resistance above this 1104.00 yesterday on Monday's trading and the market wanted to hold below this psychological 1100.00 handle.
With today's Fed Speak there may be simply a line in the sand drawn in this zone with lower drops getting bought up into this zone and early higher moves sold off below the 1100.00 handle.
Buy Pivot Target: 1,094.25 - 1,095.25
No trade at this pivot but watch this area and -4.25 or 1090.00 for support to come in on a lower opening below 1098.00
We are looking for one more weak down day and an early drop that gets some buying going and then fades out (similar to Monday's action) could produce that exact kind of day.
Sell Pivot Target: 1,104.25 - 1,103.25
Caution selling here until we see what the overall picture looks like. If the High 5 continues weak this area may continue to hold back the buying.
Usually a 2nd return to a known, establish "resistance point" gets moved through it the next day. It is the tendency of the market to not repeat itself 3 days in a row.
10 Day "Pit Bull" Moving Average: 1,110.00
We are still selling rallies below this but willing to start buying the drops as we could start moving higher any time and Crossover the Pit Bull.
As this gap closes more we want to be ready for that buying surge THAT HOLDS and carries us to the other side of the Pit Bull..the Buy side.
That apppeared like the buying surge was going to hold on Monday later in the session and we had been long from very near the lows.
I was a bit surprised we didn't get a bit of a further upward surge to sell our long but it gave us additional proof that we most likely will need one more pounding lower down to near the 1093.00 level before they get moving higher again.
Pro Trader's Action
Let's be a bit Cautious today as there is no urgency to trade with the Greenspan Wild Card sitting in the deck.
If we get a lower opening and early drop then we can still look to buy the market for a rally off the lows. I'll be more willing to just grab 3-5 points as they appear.
Lately after seeing some of the Pivot trades pan out for up to 8 points I've been trying to hold out more for the larger points. It seems the minute you start to try and do that then they go back to giving you 5 points and then stalling there.
That's just the markets for you. We have to continue to look to take 4-6 points and if they run further we just write it off as being prudent.
I think a time is coming soon where we will be able to see the Hour One pivots opening up again on a regular basis. The problem is still the High 5 readings are totally different then in 2003 and have to be adapted too.
Strong negative TRIN readings like on Monday can still be faded IF there was a previous trading day showing similar strong negative readings. But it has to be done with precision for sure.
Let's see if a lower opening and early drop gives us an opportunity to buy. Trade holding above 1103.00 is a good sign for the market to start moving up again. Many traders and advisories are expecting a 10-20 handle or so further pullback and the market has a way of stalling just above everyone's expectations.
Things are ready to turn soon but we need another good pounding it appears.
Maybe Greenspan will give the impetus for that. Maybe he will accomodate a rally mood too.
Good luck and I'll see you in the action if something good shows up. All the best, Mohan
Trade Setup Summary for Monday, July 19, 2004:
1)B@1100.75/ S@1096.00 -4.75
2)B@1097.25/S@1099.75 +2.50
TOTAL: -2.25
Recap of Monday's Action:
Good Morning. Today Greenspan is going to be talking about the markets. This can often create a sort of "edge of the seat" type trading environment as traders hang on his every word looking for surprises or hints of future interest rate moves.
We will watch the first hour or so and possibly be willing to stand aside more as the Market Force is Neutral yet we are expecting one more day down so it could be tricky.
Our Headline Call on Monday was looking for strong Bullish Market Force either off the open or on an early low. Things were more bearish then expected and although we got the very strong buying surge later in the session...it fizzled out back below the 1100.00 handle.
Here are my closing Wrap Up comments from our Live Update Service.
"A challenging day today as the Market Force was giving clear signals for a higher move off of the early lows.
We got long just below the Hour One low at 1100.75 and held the trade through a small rally to 1104.50, a pullback, and then a deeper pullback as the High 5 went very Ugly with TRIN above 1.50 and Nasdaq moving lower after being flat.
We had our stop at 1095.00 and after a move to 1095.50 got out at 1096.00 for a -4.75 loss. After waiting some time I gave a signal to re-enter long at 1097.25 and we waited patiently again for higher prices.
Around 2:05 est the market took off to the upside and we had pegged the 1105.50 to 1106.00 area to take profits. Prices rallied to 1105.00, stalled and hung in the 1103-4.00 area. Trying to hold out for another pop up higher we saw prices slowly drift lower and then spiking lower creating a bit of frustration as we drifted back to the 1100.00 handle.
I waited for an attempt to rally again off of 1100.00 but 1101.50 was all they could muster. On the next dive below 1100.00 we sold the long and took profits of +2.50 at 1099.75.
It was one of those days that could have easily pressed higher again but the selling has been a bit relentless as of late. So on balance -2.25 for the day on the 2 trades."
Today's Call & Briefing:
Today has got CAUTION written all over it. We've got Greenspan speaking, the Market Force is neutral and we are expecting one more weak down day to finish off a day to day sequencing pattern.
All of this spells opportunity with caution.
If we get a flat to higher opening and prices fail near 1103.00 then we should slowly drift lower as the day wears on and Greenspan makes his various comments.
If we can press above 1104.00 and this price is above the opening price and the High 5 are in relatively bullish shape we could see prices rise and the Bullish Market Force come back to life again like it did in a big way on Monday off the early lows.
There is enthusiasm to buy but I think it may be still premature and a bit more bottoming is needed. But we are very close.
Not expecting a BreakOut buy today. Look to keep selling rallies for today on any early higher openings with Bearish/Neutral High 5 readings.
Value Area: 1,099.00 - 1,104.20
This small Value Area zone today will be important for viewing the Market Force today.
There was double resistance above this 1104.00 yesterday on Monday's trading and the market wanted to hold below this psychological 1100.00 handle.
With today's Fed Speak there may be simply a line in the sand drawn in this zone with lower drops getting bought up into this zone and early higher moves sold off below the 1100.00 handle.
Buy Pivot Target: 1,094.25 - 1,095.25
No trade at this pivot but watch this area and -4.25 or 1090.00 for support to come in on a lower opening below 1098.00
We are looking for one more weak down day and an early drop that gets some buying going and then fades out (similar to Monday's action) could produce that exact kind of day.
Sell Pivot Target: 1,104.25 - 1,103.25
Caution selling here until we see what the overall picture looks like. If the High 5 continues weak this area may continue to hold back the buying.
Usually a 2nd return to a known, establish "resistance point" gets moved through it the next day. It is the tendency of the market to not repeat itself 3 days in a row.
10 Day "Pit Bull" Moving Average: 1,110.00
We are still selling rallies below this but willing to start buying the drops as we could start moving higher any time and Crossover the Pit Bull.
As this gap closes more we want to be ready for that buying surge THAT HOLDS and carries us to the other side of the Pit Bull..the Buy side.
That apppeared like the buying surge was going to hold on Monday later in the session and we had been long from very near the lows.
I was a bit surprised we didn't get a bit of a further upward surge to sell our long but it gave us additional proof that we most likely will need one more pounding lower down to near the 1093.00 level before they get moving higher again.
Pro Trader's Action
Let's be a bit Cautious today as there is no urgency to trade with the Greenspan Wild Card sitting in the deck.
If we get a lower opening and early drop then we can still look to buy the market for a rally off the lows. I'll be more willing to just grab 3-5 points as they appear.
Lately after seeing some of the Pivot trades pan out for up to 8 points I've been trying to hold out more for the larger points. It seems the minute you start to try and do that then they go back to giving you 5 points and then stalling there.
That's just the markets for you. We have to continue to look to take 4-6 points and if they run further we just write it off as being prudent.
I think a time is coming soon where we will be able to see the Hour One pivots opening up again on a regular basis. The problem is still the High 5 readings are totally different then in 2003 and have to be adapted too.
Strong negative TRIN readings like on Monday can still be faded IF there was a previous trading day showing similar strong negative readings. But it has to be done with precision for sure.
Let's see if a lower opening and early drop gives us an opportunity to buy. Trade holding above 1103.00 is a good sign for the market to start moving up again. Many traders and advisories are expecting a 10-20 handle or so further pullback and the market has a way of stalling just above everyone's expectations.
Things are ready to turn soon but we need another good pounding it appears.
Maybe Greenspan will give the impetus for that. Maybe he will accomodate a rally mood too.
Good luck and I'll see you in the action if something good shows up. All the best, Mohan