Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
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PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Well, the intraday pattern we've been observing repeated once again,
and we got exactly the "hover and dive" Price Action that we predicted
in yesterday's Pivot Magic Journal.

Tuesday was full of swings and backlash, and thus rather difficult to
trade. We did take a number of modest bites and have lots to discuss.

Read on!

The market has plunged over a very significant precipice.
A Red Flag warning remains in effect.

E-mini
Tuesday Dec 09, 2008

1 = Following overnight trading (Overnight, bottom left chart), the morning kicks off with a full-sized Double
bottom signal pattern behind the Close. The move breaks out with a 2-candle 123 through the Pivot. The LT SW
Channel ceiling (Daily, bottom right chart, lavender lines), promoted to a Primary PL (see PMT course book
Vol. II., Trading Sideways Channels, Altering PL Status, pg. 32) is very nearby. However, although Resistance
at the lavender line is more likely to hold than at most PLs (other than the Pivot), it is as yet unproven.
Aggressive entry above the Pivot, with initial stop advancing under that PL.

A = DVS (pink arrow, pre-exhaustion of Momentum sign) generates a small (exhaustion?) gap and a large white
candle through the lavender line. Per our PMT stop rules, move the profit-locking stop under the lavender line.

The next candle is a Higher-High-Turns-Red. The Higher-High wasn't that definitive, but back-to-back with the
preceding pre-exhaustion symptoms, risk-conservative traders (like good ole risk-conservative me) read this as
one of our Exit Now! signals and exited. +/- 3 points

B = If, due to the large ABS, we ignore the potential Exit Now! Signal (an equally well-founded decision), this
giant white candle puts the position in Pivot Magic Trading Maximum Profit Giveback violation. Mental stop at
Giveback level.

This time, the Higher-High-Turns-Red is irrefutable. Exit Now! +/- 5.25 points

[SNIP]

3 = Failed TTT of the LT SW Channel ceiling (blue arrow). Anticipated TTT Corollary (see discussion in the Pivot
Magic Trading course book, Volume III, Scalping and Advanced Techniques, pg. 69) attempt at the Pivot (also a TTT,
BTW) succeeds. The hour is wrong, and Twin Towers (pink arrow, obvious with the next candle only) advises PMT
readers of the tape that a stall/sag/retest is next. Assume the wait and see position.

[SNIP]

And the Dive part of our "Hover and Dive" prognosis continues south without us. Boooo!!!

4 = A Bull Doji Sandwich off the S1 converts (on strong DVS) to a 123 through the S1. Apply our aggressive entry
techniques, with initial stop advancing above the S1. The extended bottom wick of this massive candle causes us
to suspect that the desperate assault may have depleted the Bear resources.

F = Large, red, inverted (Bull) Dragonfly. Again the bottom wick/skid marks warn that the Bulls are spinning
their wheels trying to reverse the inertia. Diminishing Bear Volume (plum line) gives us a concurring reading.
Briskly move profit-locking stop above the high of the candle.

G = See = F, above. The Momentum is surely exhausted by now!

Yep! The next candle turns around for a mid-air reversal. Exit Now! +/- 4.75 points

5 = One last chance before our PMT entry clock runs out. A 2-candle 123 through the S1. Plenty of open Price
Window to the (always considered proven) Pivot.

H = DVS (pink arrow) blasts a giant white candle through the Low, pulling us in. Initial stop advances under
the Low/Giveback level.

J = Twin Towers (pink arrow) and Price Action spikes through the HighW. Noting that the hour is 3:00
(Action/Reversal Time), once the Price Action reverses and takes back 3 points of the profits (as it crosses below
the HighW), Exit Now! +/-5.50 points

Price Action returns under the S1 and forms an EOD Ascending Triangle (light blue lines). So the day closes, mid-
Channel with strong Bull pressure on the underside of S1.

PERSPECTIVE
(Daily, bottom right chart)
The BBs continue to prefer that trading remains inside the security of the LT SW Channel.
Barring a surprise in the news (from last month's Fed. Budget report? LOL!), a Bear
offensive, mounted to test the LT SW Channel floor, still seems imminent.

REMEMBER: Trade the tape, not my prognosis!

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

Tuesday's PMT Chart: