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

Good morning,

Another breather day, but reading the Tape and trading the Momentum
made Tuesday a drop more profitable than Monday. Wednesday, is set
up for a wild swinging large-range day. Have your weapons primed,
keep your powder dry, and be prepared for opportunities.

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

CAVEAT
Guard your funds. Although a dangerous time for beginning traders to
get wet, this is an excellent time for paper trading and practice.

E-mini
Tuesday Jan 06, 2009

After opening gap-up, Price Action pushes north through the R1.

1 = DVS (pink arrow), and the Bulls stretch desperately for the R2. The long tail of this giant, red, Bear
Dragonfly falls just a tik short of the R2 range. The breakaway gap and the massive Volume present a sound
basis for advanced traders to not only use their discretion to enter, but to do so aggressively, around 938.75.
By the completion of the candle, a stop in the gap would make good ole risk-conservative me feel more
comfortable though.

A = Large red candle through the R1. Per our stop rules, move the profit-locking stop above the R1.

B = Giant red candle through the High and HighW. Since the HighW penetration is weak, move the profit-locking
stop above the High (medium aggressive choice).

C = Slightly higher DVS makes this a Twin Towers (pink arrow). Stall/sag is coming. The huge candle puts our
position in Pivot Magic Trading Maximum Profit Giveback (MPG) violation. Mental stop at Giveback level.

NOTE A: Since both of the Twin Towers generated candles have elongated bottom wicks,
confirming the Volume reading of waning Momentum, we are glad to have a mental stop
at this juncture. A mental stop gives us more flexibility if an emergency exit is
indicated.

Scary though any stall is, this one hardly threatened our stop.

D = DVS (pink arrow) blasts a final desperate assault through the Close at the Pivot. Ideally, we use a Pivot
Scalp exit as soon as the Price Action taps on the Pivot and retracts like it touched hot coals; surely, by the
time Price Action crosses above the Close we are flat. +/- 11.25 points

NOTE B: Bull Volume (pink arrow) does not present sufficient support for the 2-bar
Reversal off the Close to entice us much.

2 = A "P" Reversal behind the Pivot. Volume does not confirm, and the Close and "green fog" intervene. The 123
continuation (blue arrow) is an "S" signal, but even as Price Action tapes a breakaway gap and exits the fog,
the Volume (aqua arrow) is too lazy to be reliable. Sigh, and Pass.

3 = Nice, white, Bull Dragonfly Reversal off the Close immediately stalls with a Doji, but then converts to a
rather fuzzy, Double bottom. Volume is way down at 1:30 Action Time. Pass.

4 = Although almost the entire 2-bar reversal is outside the fog, DVS-based signals are suspect, so we hesitate.
That cost a few points! Drat!

E = Bull Volume continues to rise (pink arrow). Price Action has cleared the MA, and even taped a small breakaway
gap. First sign of white pulls us in. Scoot the stop under the HighW, locking instant profit. Nice move, exhale!

NOTE C: Now we spot the flip side of NOTE A, above, as the long top wick of this candle
warns of pending exhaustion.

F = Large, white, inverted (Bear) Dragonfly spikes through the High and R1, and retracts. Even if we were a bit
too greedy to take the obvious Pivot Scalp exit, by the time 2 points of profit was handed back, we were flat.
+/- 3.75 points

5 = Really wanted to climb aboard this high-Volume (pink arrow) 123 continuation move to retest the Pivot, but the
PMT entry clock has expired.

PERSPECTIVE
(Daily, bottom chart)
Tuesday was another breather day, with the Bulls still panting after Friday's blitz.
Friday's exit from the lower LT SW Channel (lavender lines) was nominally tested again
on Tuesday, but is still not all that definite that the old ceiling has been converted
to a new floor.

I personally tend to expect a wild, large-range, swing day Wednesday or Thursday.
Although such a day may result in little NET change in Price level, daytraders should
stay alert and prepare to take large bites as they present.

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: