“Não diabolizo projetos” como a mina da Lagoa Salgada

[Dwer]

Sell rallies on a higher open and early push up. If we get a fast, early drop this will be a signal to look to buy lower prices at the BreakDown. We are still on High Alert for a Bear Ugly day to occur.

Trade Setup Summary for Thursday, December 4, 2003:
Sell 1067.50 (or higher)/ Cover for -2 pt. loss

* Sell BreakOut. Market moved 5 pts. in trades favor, stop was moved to -2.00 as per TCF rule, and later rally in the final hour hit the stop.

Recap of Thursday's Action:
Good Morning and thank you for joining with us today.

December erratic markets and small, tight ranges continue to dominate the market action as warned in yesterday's briefing. Looking back over the last 10 years of trading the S&P500 I am always aware of December being like this.

Over the last 5 years especially I always recall how a consensus will build looking for a "Santa Claus rally" and prices appear to be moving higher but along the way traders are getting stopped out on both sides of the market.

It's no big deal...just typical December action. We have to face that if we want to trade this month, just keep following our TCF Trade Setups approach and go with the flow of our system.

Our Headline Call was looking for a higher opening and early rally to the BreakOut to sell. That is exactly what we got on Wednesday except the opening was flat on the previous days close.

Traders would have sold the BreakOut or higher and we would have been looking for a 6 point move below the BreakOut price of 1067.50. The market started eroding nicely in our favor and we were looking to liquidate at 1061.50 which was a strong support number on the floor but we never got that low.

Prices found support and once again rallied back up to the BreakOut and above like they have the last 3 opening days of the month of December confirming the radical behaviour of December trading. Combined with the low ranges (8.90 10 day average range...the lowest I have seen in my career) the key is survival and trying to capture whatever points we can.

I expect the ranges will be opening up soon as the overwhelming force of the new Sell Mode kicks in and this may correlate wtih THURSDAY'S ROLL OVER NEXT WEEK. Very often we will see prices head lower as we move into March Contract rollover as the desire to roll into the new month contracts (symbol on emini is ES H 03)at lower prices occurs. Let's see if we get this phenomena again this rollover combined with the new Sell Mode that is about to open up any time.

Today's Call & Briefing:
On today's Headline Call we are going to be looking for one of two scenarios to occur. First, on a higher opening above 1069.40 and an early move up that hits the BreakOut again as the first Hour One pivot we will be looking to sell.

On a lower opening and early run lower we will be looking to be buyers on the BreakDown UNLESS we get a Bear Ugly market situation. We have a continued HIGH PROBABLILTY OF A BEAR UGLY DAY as we are waiting for a strong down day to open up the new Sell Mode direction.

I have been talking about how a sustained move above the 1067.50 price area would possibly stall the entry into the new Sell Mode. We keep getting symtoms of that as prices for the last 4 days now keep getting hammered lower only to find support. This is the Tug of War with these two forces I have been describing to you and once again, for Thursday, you can see this occuring.

So neither the bulls or the bears are really getting anywhere and as mentioned the key for this type of environment is to preserve capital and be willing to take less points on the trades. That requires discretion and that means being willing and able to "think outside of the box". We need to follow our precision TCF rules and methods but at the same time apply the logic and reason of being in this difficult month with the idea of scraping together whatever points we can.

With that in mind here are the TCF SETUPS TO WATCH FOR TODAY:

On a higher opening and early run up look to sell the BreakOut again if that if the first Hour One pivot hit. We only want to sell that B/O if the setup is NOT occuring for Buying the BreakOut.

Buying the B/O would occur if we see the Dow flat at the time of the B/O (up +50 points or less) and the NAZ (our nickname for the Nasdaq composite index) up +12-15 or more. Look for TRIN below .80 and that setup is bullish. Otherwise we would look to fade the BreakOut.

Watch for a BEAR UGLY DAY to occur with some strong, bad news on the open that sends the markets reeling lower. If this does NOT occur then we will be looking to Buy the BreakDown if that is the first Hour One pivot hit.

It is dificult for me to recommend buy positions now as I know that we are on the verge of the Sell Mode kicking in. There is always the chance that we could buy the BreakDown and get slow erosion in what I referred to recently as a "Sneak Down Bear Ugly" type of day. These are a recent phenomena where the market does not have substantially bad news but just some strong sector weakness or something that spills over into the entire markets. We are RIPE for such a situation now. I can only identify these situations and show you the best means of attempting to trade them. You must always keep in mind however, especially those who are new to futures trading, how risky this business is.

Systems and methods are only as good as the skill of the person operating them. Very often traders who are new to the S&P500 futures find it very difficult to understand some of the movemements in the futures and our applications to trading them. Sometimes I use ideas such as, "there were too many bears in the market and therefore we expect a rally". This goes contrary to what conventional wisdom has taught many market observers but in real S&P500 trading it is a daily fact of life in the action.

Thursday was a classic example of a market that was exhibiting slow errosion characteristics and as prices pushed lower an excess of bears built up in the markets and they rallied into the close.

Our system in many ways is built on methods of "fading the market" used by floor traders intraday and that is why many of our ideas may seem difficult to grasp at first by new futures traders. Also it is important to understand that EACH DAY IN THE S&P500 IS A LITTLE (OR A LOT) DIFFERENT FROM THE PREVIOUS DAY. Therefore, the real ingredient to overall success is developing the skill to understand what to do in the markets under various circumstances.

Our daily briefings here on the Morning Call are designed to assist you in your journey to succesful trading in the S&P500. It requires a great amount of patience and emotional maturity to be succesful in this business.

Value Area: 1,063.00 - 1,068.20
Watch for a move below 1063.00 that holds lower to be bearish for the market. Trading above 1068.20 is not necessarily a bullish indication as the market is just putting in a topping process right now so we want to stick towards the sell side overall looking for a large down move at open the sell side up.

As mentioned however, if we get a fast move lower early today that would be bullish for a continued move up.

Buy Pivot Target: 1,064.75 - 1,065.75
No trade at this target today. Watch the -4.25 stop/pivot at 1060.50 for either support or a trade through to the downside to signal lower prices.

Sell Pivot Target: 1,072.25 - 1,071.25
No trade at this target today. Let's wait for the Hour One pivots to let the radical December market action sort itself out more clearly. We may risk missing a fast down move if we hit this Sell Pivot early but preservation of capital is more important for December. We can use this pivot to compare to the BreakOut numbers and any trade at the B/O for further information on support/resistance.

10 Day "Pit Bull" Moving Average: 1,055.60
As we push towards the 1063 area we are closing in on the Pit Bull and soon may see a strong move to Crossover to the sell side of this pivot.

We are still watching 1067.50 for a signal on the market moving lower and getting in the Sell Mode. Things may heat up in this way next week as we approach rollover on Thursday.

Pro Trader's Action
Well, Thursday was another day where we saw the strong Sell Market Force kicking in only to see the "Tug of War" begin again with the bullish Holiday period.

At this point we can just keep hitting the TCF Trade setups, using as much caution as we can and be willing to stand aside if the TCF trade setup is not clear on what to do. Better to err on the side of caution especially during the erratic month of December AND especially right where we are now with the Sell Mode ready to kick in yet the contrasting bullish Holiday mood arm wrestling with it.

Never a dull moment in our S&P500 "fastest game in town" business.

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