PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Wednesday was a good example of why they say that trading is a hard way to make an easy living!

In yesterday's Pivot Magic Trading Journal, PERSPECTIVE section, we commented,
" . . . Rather hard to identify the exact floor [of the] LT SW Channel. . . the BBs are just bouncing Price
around, scalping, and waiting for the news to break the market free . . . " Got that right!

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RED FLAG WARNING

NOTE A: The ABS has been bloated for several weeks. Should bloated ABS conditions continue, high-wind
warnings, and precautions apply. To avoid getting stopped out at every Price adjustment, expand the
Pivot Magic Trading Maximum Profit Giveback (MPG) and stop placement spacings.

To reflect the ABS, and to avoid sudden-death Price Action swings:

* MPG limit needs to at least as large as, or larger than, the average candle.

* Stop placement (still applying our PMT stop rules) spacings backs off by to approximately 1/2 ABS.

NOTE B: The expanded spacings obviously make for greater risk exposure. Of course, the profit-per-minute
potential increases as well.

* This represents an acceptable threat to well-funded Advanced traders.

* Intermediate traders might wish to trade fewer contracts than usual. Put less of your funds At Risk.

* Beginning PMTers might be wise to sit out the fireworks.

While the market is excited (ABS is large) and skittish (Price Action is basically sideways, a minefield full of traps),
every small hiccup "scalp" travels a dozen points or more, in minutes. Observe how careful application of the PMT
rules, nerves of steel, close attention to the tape (and our primary indicator, Volume), together enable the
(well-funded and) experienced PMT trader to avoid traps, and to even profit from the occasional "accidental" blips.

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That said, let us proceed.

E-mini
Wednesday Dec 03, 2008

[SNIP]

6 = Sudden Volume burst right around the 1:30 Resumption-of-Action Time blasts a huge red candle through the dotted plum line all the way to the Close.
Price Action tapes a 2-candle 123 through the Close and escapes the "green fog". Probability of Pivot/plum line (absolute LT SW Channel floor) retest makes
this very inviting (even off the Close). Entry below the fog, with initial stop advancing above the Close.

F = Large, red, inverted (Bull) Dragonfly. Per PMT stop rules, move the profit-locking stop above the high of the candle.

G = Large red candle. Move the profit-locking stop above the high of the candle.

H = Tiny gap (exhaustion?) and DVS (pink arrow, using up the Momentum?) drives a large red candle to spike through the Pivot. Per my convention, move the
profit-locking stop into the gap. Eyes peeled!

J = Large red candle intersects the Pivot. Briskly move the profit-locking stop above the Pivot.

Diminishing DVSs (exhaustion), and another tiny gap (exhaustion) gives way to a large red candle. Slip the profit-locking stop into the gap, locking in most of
our profits.

When the next candle retraces 62% of the red candle (on no Volume, BTW, pink arrow) the tape shows a mid-air reversal, Exit Now! +/- 10.25 points

8 = That's one wicked 123 through the Pivot! Volume is booming (pink arrow). Pulled in on a most disappointing inverted, white Dragonfly.

K = Giant white candle. Not quite MPG, but experience guides one to advance the profit-locking stop to "free trade" and a tik.

L = Large white candle. Per our rules, move the profit-locking stop under the low of the candle/Giveback level.

N = DVS punches Price Action through the Close and "green fog", spiking temporarily through the dotted plum line. Per our rules, move the profit-locking stop
under the Close and anticipate exhaustion.

P = Larger DVS/Twin Towers (pink arrow) generates a huge white candle, with a bit too much top wick. Position is in violation of PMT MPG rules. Mental stop at
Giveback level. Twin Towers tells us that a stall/sag/retrace is coming. Fearing a retrace of the dotted plum line, when Price Action spikes and pulls back 3
points, Exit Now! +/- 14 points

Price Action recovers and ultimately stretches to tap on the R1. Better safe than sorry, however!

[SNIP]

PERSPECTIVE
(Daily, bottom chart)

As you may have noted (5-Min Primary Trading Chart, top), Price Action pretty much ping-ponged between the plum line/Pivot
(MidW) and the R1, ultimately stretching to R2/MidM at EOD, i.e. trading is smack in the middle of the weekly and monthly
price-range channel. I point this out because the Long-term Trend (green trend channel) makes it difficult to understand that
the intraday market is primarily trading sideways, swinging and scalping, as the BBs continue to await any excuse to break the
market free.

Price Action has rebounded off the plum lines, but with the LT Trend Channel ceiling (and the dotted light blue line, Historical S/R
and alternate LT SW Channel ceiling) hovering overhead, the Bulls will have to eat their Cheerios if they hope to re-establish a
Bull market!!!

REMEMBER: Trade the tape, not my prognosis!

Asher
=] ;-)>
Pivot Magic Trading Course
http://www.tradingthingys.com/PMTJ/Commodity%20Day%20Trading.html

Wednesday's PMT Chart: