Mohan 21/07/04
Enviado: 21/7/2004 14:36Market Force: Neutral/Bearish. Watch for early rally today to hang up near the highs and sell off later in the session.
Trade Setup Summary for Tuesday, July 20, 2004:
B@1102.00/ S@1107.00 +5.00 pts.
Recap of Tuesday's Action:
Good Morning and welcome to Wednesday's action.
On Tuesday we were looking for one more weak trading day but had expressed the possibility of seeing the Bullish Market Force come out again like it did on Monday off the early lows.
We got the slightly higher open and saw prices holding just above 1102.00 which was confirming the possibility of a BreakOut Buy.
After watching the indexes and High 5 it was clear to me prices were going to try and rally so we got long. Here are my Wrap Up comments from our Live Service.
"We came in today with a Neutral Market Force and were interested in seeing if there was going to be stronger selling coming in or the market would hold up above the opening price.
With prices holding up and specific indications I was seeing in my Market Force indicators it was appropriate to look to get long.
We got long on a Trailblazer pullback formation right at the 1102.00 price and held on. With Greenspan testimony starting around 2:30est I was hoping to get out of the trade before then.
Prices held up and we had targeted a goal of 1108 to take profits. About 10 minutes before Greenspans transcripts were to be read the market shot up towards 1107.75 and stalled at 1107.00.
I issued a recommendation to get out of the long and we took +5pts on the trade. Just after the release of the transcripts the market went nuts dropping back to 1102.00 area and now coming into the close is staging a rally towards 1114.00.
I had mentioned in the last post after the trade completion that I had expected prices to possibly stretch to 1112.00 but that there was increased risk in holding long. This all turned out to be the case."
Today's Call & Briefing:
For today we are going to be looking for early strength in the price action with the possibility of an early rally attempt.
The key today is to see how the High 5 and rest of the tape shape up as we are expecting that if we get this early rally then prices will hang up near the highs and later fizzle out after around 1:30 est or so.
With this in mind we want to view the alternate scenario which is more bullish. If we see prices get hit with selling early in the session then we would expect a gradual rise off of the early lows and continued strength throughout the day.
The first scenario is most likely to pan out as Greenspan had saved some of his more bullish comments timed towards the close of the markets.
Because today is day 2 of continued discussions with A.Greenspan we want to be aware of the chance of more whip saw volatility and/or the possiblility of just very flat trading.
Either way we are going to follow our plan described above and see if we can nail some good points today.
Value Area: 1,101.50 - 1,108.50
Most of the volume of the trade on Tuesday occured in this Value Area range. The late surge may have created a bit of an artificial pricing which we will know more about later today.
If we see prices attempt to rally as expected and then fall back into this Value Area ...it is a bearish sign.
The Market Force indicators for today are Neutral/ Bearish meaning any rallies will most likely get hit with selling.
Buy Pivot Target: 1,102.25 - 1,103.25
We can look to get long down here IF we get an early price drop. It would have to be a pretty strong drop to crunch prices down here again but be ready to look to buy if we get that early drop.
We will most likely compare this zone to the Hour One low first before considering an entry.
Sell Pivot Target: 1,118.00 - 1,117.00
This would is expected to be a good selling area today. If we get an early run up to this area be prepared to sell em and hold short for the later part of the session to drop.
10 Day "Pit Bull" Moving Average: 1,109.70
We blew through this number pretty strongly later in the session on Tuesday but it may have been an artificial move.
Watch for support here initially but I expect we will have to wrangle with this number a little more than just seeing prices fly through it on some rigged comments by Greenspan.
Remember, there is market propping going on during election time here and they need all they can get so watch for manipulations of this type going into the November period along with "surprise success stories" in terms of the Iraq/terrorist mess going on.
Pro Trader's Action
Although I want the market to be bullish as much as the next trader in order to bring the public and liquidity back in (and hence the ranges and volatility) I expect we have more work to do on the downside after today's expected price hike.
If we get an early squash in the prices then there is a chance we could get a genuine price boost later into the session as the climate changes to bullish for a few days.
There are still a lot of relentless bearish sellers waiting in the wings to pound the market and on a higher opening and early rally today I expect them to come out later in the session.
Good Luck with your trades today and I'll see you in the action. Mohan
Trade Setup Summary for Tuesday, July 20, 2004:
B@1102.00/ S@1107.00 +5.00 pts.
Recap of Tuesday's Action:
Good Morning and welcome to Wednesday's action.
On Tuesday we were looking for one more weak trading day but had expressed the possibility of seeing the Bullish Market Force come out again like it did on Monday off the early lows.
We got the slightly higher open and saw prices holding just above 1102.00 which was confirming the possibility of a BreakOut Buy.
After watching the indexes and High 5 it was clear to me prices were going to try and rally so we got long. Here are my Wrap Up comments from our Live Service.
"We came in today with a Neutral Market Force and were interested in seeing if there was going to be stronger selling coming in or the market would hold up above the opening price.
With prices holding up and specific indications I was seeing in my Market Force indicators it was appropriate to look to get long.
We got long on a Trailblazer pullback formation right at the 1102.00 price and held on. With Greenspan testimony starting around 2:30est I was hoping to get out of the trade before then.
Prices held up and we had targeted a goal of 1108 to take profits. About 10 minutes before Greenspans transcripts were to be read the market shot up towards 1107.75 and stalled at 1107.00.
I issued a recommendation to get out of the long and we took +5pts on the trade. Just after the release of the transcripts the market went nuts dropping back to 1102.00 area and now coming into the close is staging a rally towards 1114.00.
I had mentioned in the last post after the trade completion that I had expected prices to possibly stretch to 1112.00 but that there was increased risk in holding long. This all turned out to be the case."
Today's Call & Briefing:
For today we are going to be looking for early strength in the price action with the possibility of an early rally attempt.
The key today is to see how the High 5 and rest of the tape shape up as we are expecting that if we get this early rally then prices will hang up near the highs and later fizzle out after around 1:30 est or so.
With this in mind we want to view the alternate scenario which is more bullish. If we see prices get hit with selling early in the session then we would expect a gradual rise off of the early lows and continued strength throughout the day.
The first scenario is most likely to pan out as Greenspan had saved some of his more bullish comments timed towards the close of the markets.
Because today is day 2 of continued discussions with A.Greenspan we want to be aware of the chance of more whip saw volatility and/or the possiblility of just very flat trading.
Either way we are going to follow our plan described above and see if we can nail some good points today.
Value Area: 1,101.50 - 1,108.50
Most of the volume of the trade on Tuesday occured in this Value Area range. The late surge may have created a bit of an artificial pricing which we will know more about later today.
If we see prices attempt to rally as expected and then fall back into this Value Area ...it is a bearish sign.
The Market Force indicators for today are Neutral/ Bearish meaning any rallies will most likely get hit with selling.
Buy Pivot Target: 1,102.25 - 1,103.25
We can look to get long down here IF we get an early price drop. It would have to be a pretty strong drop to crunch prices down here again but be ready to look to buy if we get that early drop.
We will most likely compare this zone to the Hour One low first before considering an entry.
Sell Pivot Target: 1,118.00 - 1,117.00
This would is expected to be a good selling area today. If we get an early run up to this area be prepared to sell em and hold short for the later part of the session to drop.
10 Day "Pit Bull" Moving Average: 1,109.70
We blew through this number pretty strongly later in the session on Tuesday but it may have been an artificial move.
Watch for support here initially but I expect we will have to wrangle with this number a little more than just seeing prices fly through it on some rigged comments by Greenspan.
Remember, there is market propping going on during election time here and they need all they can get so watch for manipulations of this type going into the November period along with "surprise success stories" in terms of the Iraq/terrorist mess going on.
Pro Trader's Action
Although I want the market to be bullish as much as the next trader in order to bring the public and liquidity back in (and hence the ranges and volatility) I expect we have more work to do on the downside after today's expected price hike.
If we get an early squash in the prices then there is a chance we could get a genuine price boost later into the session as the climate changes to bullish for a few days.
There are still a lot of relentless bearish sellers waiting in the wings to pound the market and on a higher opening and early rally today I expect them to come out later in the session.
Good Luck with your trades today and I'll see you in the action. Mohan