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[Dwer]

Today is a pivotal day as 1142.00 continues to be important to stay in a Sell Mode. We do expect higher prices on a flat to lower opening and early pullback. An early rally off the opening we would expect to be bearish for today.

Trade Setup Summary for Friday, February 6, 2004:
Sell B/O or slightly higher at 1136.75. Scratch trade for breakeven to -2.00 loss.

If you took a short on the early third level up on the Trailblazer setup there was either a small loss or small gain on the trade depending on where you got short (between 1136.50-38.50). Trade should have been exited after significant time passing without a fufillment of the trade.

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

On Friday we were looking for prices to "hang up" until later in the session where we were watching for a sell off.

We did not get that action as the Bears started piling on the rally with the prices holding up. That not only kept the prices higher but pushed em up into the close and causing us to get out of our short position from just above the BreakOut with a scatch trade.

It basically was another odd day of trading with a very tight,small trading range if you don't consider the early ramp up from opening 1127-29 area and fast jump up to 1136-38 area. Most of days trading was in a 4-5 point range.

Actual trading range of the bulk of the day was so tight that even the early Trailblazer move never made any significant fufillment of the trade but only crossing over the Trailblazer line over a four hour period before pushing higher into the close.

It was actually a rather typical Friday as I had alerted you to with the portfolio balancing type trade we often see on this day of the week.

Today's Call & Briefing:
Today is going to be a more or less pivotal day we expect. 1142.00 still is a crucial number for keeping our Sell Mode Market Force indicators OUT OF ABERRATION. I have been discussing this regularly here in this daily report and now we have seen prices push up to this level again.

In order for our TCF Market Force indicators to stay in a Sell Mode we would need to see this range of 1138-1142.00 hold back the buying. If we see prices today open higher and move higher then we would look for the trade to fall back below 1142.00 and then 1138.00 to confirm the Sell Mode continuation.

If they hang up again as on Monday but push over 1142.00 then we are probably on our way back up to January's Highs at 1155.00 for another test of that. So in this way you can see why today is PIVOTAL.

Will the prices fall back after moving above 1142.00 or hold flat up there and press higher? It is a simple question and the answer will be also confirmed by the condition of the High Five today on the early move after the first 2 hours of trading or so.

TCF SETUPS TO WATCH FOR TODAY: We want to watch the BreakOut carefully today and see if it is setting up for a bullish BreakOut BUY that sends the prices higher and the Sell Mode into aberration. We would look for higher NAZ prices being up +12-15 or higher and Dow up less than +50 at the time of the BreakOut. Also we would want to see a TRIN below .80 and also VIX lower.

If we are NOT seeing this setup then we can look to sell the BreakOut after giving it some room to try and move higher. If we can nail a good spot and things start to fall apart on this Hour One setup and the market pulls back into the Sell Mode it's been in then that could be a good short trade. The key will be seeing how things look at the BreakOut or slightly higher.

Remember, Monday's are the most bullish day of the week so don't be too overanxious to sell without good proof of a failure of any early rally action.

Be prepared to Buy the BreakDown or any Trailblazer pattern on a 3rd level move lower if we see the lower opening and early move down. This type of trading movement should be bullish for the market today.

Value Area: 1,135.40 - 1,142.00
This VA zone today is bracketing the significant support and resistance for keeping us in the Sell Mode on our Market Force indicators. If we move above 1142.00 and then fall back into this zone it should produce bearish, lower price reactions. Hanging up above 1142.00 is bullish and we should see a test of 1155.00 again soon with the Sell Market Force thrown into aberration.

Buy Pivot Target: 1,130.00 - 1,131.00
On an early drop lower watch for Trailblazer formations in this price zone. You could try to buy the direct price here and use a 4.25 stop but it is more precise to look for the Trailblazer pattern and then take the trade. In this way you can make a tighter and more efficient stop in these tight range markets.

Sell Pivot Target: 1,145.00 - 1,144.00
No trade directly at this pivot but watch for "3rd level or Too Far Away" Trailblazer patterns to go short near this price area. Watch a +4.25 stop/pivot above this at 1149.25 to hold back the buying IF the High Five is not bullish as described in the TCF Trade Setups to Watch For.

10 Day "Pit Bull" Moving Average: 1,134.30
We have now Crossed over this price which was the first level of putting us on alert to look for an aberration on the Sell Mode. We have been in a small Sell Mode period but it has not been too significant. Now we see prices pushing back up towards 1142.00 after Re-Crossing over the Pit Bull so the alert is flashing Red.

Now, as described above, we just need to watch key numbers and see how things fly.

Pro Trader's Action
Friday was a go nowhere day as far as trading goes but the action was to the upside. So it was a replay trading day of that whole December/January type market where they ramp up early, hang up, and then finish positive.

Terrible for us intraday traders as we get no range to play off of but great for those who are bullish and holding long.

So once again we will rely on our new Trailblazer TCF setup today to not only get us in precision trades but measure the markets trading range and S&P500 point availability today.

Good Luck and I'll see you in the action. Have a great week. Mohan