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[Dwer]

Market Force: Neutral/Bullish. The market is expected to climb higher today but we will continue to see selling of the rallies.

Trade Setup Summary for Wednesday, April 7, 2004:
1) B@1138.50/ S@1138.50 0

* We bought and then got out after some time of a flat market at scratch.

Recap of Wednesday's Action:
Greetings.

On our Headline Call for Wednesday our Market Force readings were Bearish/Neutal. We saw the market open about flat and then sell off about 5 handles which is quite a bit for this current market.

After the first hour was complete prices dropped further creating support right at our 1138.00 Buy Pivot -4.25 stop/pivot number. We had said to watch for first support at the Buy Pivot and then 1138.00.

We had suggested this would be a buying opportunity so we recommmended buying in that area and were seeing fills in the 1138.50 area.

We held the trade for some time even projecting 1144-45 as a goal upwards but after a period of a flat price movement and WITH A MEGA BEARISH HIGH FIVE we decided that the risk was substantial to hold long a trade that was not responding.

That was a decent call as the market STAYED FLAT ALL DAY until the later session. It really is not part of our system to hold a long position with the NAZ down hard, the TRIN up over 1.30, and VIX down.

Although they took off like a rocket ship to the upside near the final 2 hours of trading it was rumour about an airport scare that ended up being a non-event. This got buyers to jump in and we saw a swooping up move followed by a large pullback to where they ran from only to rally back up again closing neutral on the day.

Our Market Force indicators had told us this was going to occur the night before when we published the Headline Call. It was a day that was better left alone from the way the trade was moving and we were fortunate we just had a scratch trade.

Today's Call & Briefing:
Today appears like it is going to be more of the same type of trading action. There is an indicator we are seeing which is rare and I call it a "slammer". Slammer indicators that show up usually do one of two things. They make a large, continuous one way directional move or they make a fast one way directional move and then reverse it in a serious way.

Now the wild card for today is the 911 TESTIMONY OF CONDOLEZA RICE which is going to be big news. THERE IS A VERY GOOD CHANCE THAT WE WILL JUST STAND ASIDE IF IT APPEARS THIS TESTIMONY IS GOING TO AFFECT THE MARKETS.
For today I am expecting the possibility of a fast early up move and then a strong reversal later in the session. Of course this all depends on what is going on with the High Five in real time and how the numbers are trading.

Being a double sided market potential today we would look to BUY DROPS early on a strong pullback lower OR if we get the expected rally FIRST then we would be on alert for shorting the rally.

As all of you know who follow our work carefully we would be looking for a Selling pattern up near the Hour One BreakOut.

With the Sell Pivot target around 1146.50-47.50 if we get an early rally we are going to exceed that number which is what I expect. The +4.25 stop/pivot is 1151.75 and we would look for stronger resistance up there.

We can watch the Buy pivot and lower too as outlined in that section for an early drop to Buy.

Value Area: 1,137.50 - 1,142.10
We should be trading mostly above the Value Area today I would expect but would look for 1144.00 price to still be pivotal meaning that trade BELOW this price is bearish.

Next level goal one of the new Sell Mode if we can get today to really kick in lower will be 1126.00 but this is NOT expected today.

We will be looking for substantial PROOF that the Sell Mode is in full gear with the lower prices today. If not we will be on aberration alert.

We are still in a down cycle looking to fufill a slightly lower number before we can start determining officially whether we are in an aberration on a Sell Mode.

The reason I say "officially" is although we had a sharp down day in the Dow being down 90 bucks the S&P500 was only down 2 points. This is a sign that one way or the other their will be a balancing out of this divergence. Our indicators would suggest that would be to the downside.

Buy Pivot Target: 1,137.75 - 1,138.75
There is going to be support in this area as we tried to bust it yesterday 2 times and couldn't. If we rally early above the OPENING PRICE and then pullback to this area it could finally blow out to the downside.

This would be if we got a CONFIRMATION of the Sell Mode opening up and a lower move to follow through below this Buy Pivot area.

Support under that would be 1133.50 and below that we would start approaching our 1126.00 first goal lower.

I am expecting prices to actually stay up higher today overall.

Sell Pivot Target: 1,146.25 - 1,145.25
We have already discussed above what we would want to do in this area.

10 Day "Pit Bull" Moving Average: 1,129.60
This price gap is closing as we mentioned recently and it is a sign usually of the market starting to gravitate towards this number. This would be the next goal lower if we pop through the 1133.00 discussed above.

Pro Trader's Action
Today should be some fun if we can get the volatility going. Yesterday was a sleeper until much later in the session.

Let's see if we can get on the Sell Side of a rally and hold for lower action today. If so I would consider being more patient with the trade and see if we can get it to come to fruition. That would only be worth it though if the High Five had some semblance of favoring our trade idea.

Good luck with your trades today and I'll see you in the action. Mohan