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

Good morning,

Trading waters were a bit choppy, but we eked out some profits, and
we observed some rather exciting patterns on Thursday's tape.

TGIF!!!

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
Thursday Jan 22, 2009

Morning session opens gap-down, below the Pivot. For the first hour Price Action ping-pongs, untradably, in the
Pivot-LT SW Channel Floor channel (lavender line). Finally, the Bears succeed to overrun the lavender line on
very low Volume, but they can't quite complete the stretch to violently test the S1.

1 = Large red Bear Dragonfly, a "P" Signal, but since the Price Window to the already/almost proven S1 Support
is tight, we assume a Pivot Scalp to the S1. Volume is Massive, so even as lunchtime approaches it is reasonable
to assume that this candle inputs sufficient push to achieve the Primary Objective even on drift. Aggressive
entry as Price Action crosses back under the MA.

A = Large red candle. Per PMT stop rules, move the profit-locking stop above the high of the candle. Prepare
to Pivot Scalp exit.

B = Hefty Volume (sorry, no room for a label) blasts Price Action wildly through the S1, converting this to a
PMT Scalp (see the coursebook re this conversion). Per our stop rules, move the profit-locking stop above the S1.

C = Twin Towers Volume pattern is a PMT indicator that the next candle will stall/sag/reverse. This close to
the S1, a retest is assumed likely.

Large red candle. Normally, we'd move the profit-locking stop above the high of the candle. That is
approximately Giveback level. If the tape presents us with and Exit Now! (very likely from our above analysis)
we will be glad for the any extra flexibility. For that reason we call this a Pivot Magic Trading Maximum Profit
Giveback (MPG) violation, and place a mental stop at Giveback level.

There it is, a mid-air reversal, and that's one of our Exit Now! Signals. The instant the reversing white candle
crosses above the open of the red candle, go flat! +/- 4.50 points

NOTE: With ABS somewhat bloated, we couldn't use the 62% retracement rule
for our exit warning since almost any average sized white candle would ring
our exit bell.

Price Action drifts up, through the S1 on lunchtime Volume. A long, violent, battle at the lavender line ensues.

2 = What have we here. Right shoulder is a bit short, but the LT SW Channel floor has just been re-entered on a
full-sized Head and Shoulders (upside down, of course).

Huge Volume (DVS, pink arrow) pumps a large white breakout candle (blue arrow) toward the Pivot. Aggressive entry
techniques are obviated. Initial stop advances under the Mid (or at MPG, depending on your entry execution).

D = Large white candle. Rules say to move the profit-locking sup under the low of the candle.

When the next candle appears to tap on the Pivot and then turns red, retracing say 2 points, Exit Now! +/- 4 points

3 = Seems we were premature, but we get a second chance to rejoin the fray with a 2-candle 123 continuation (one of
our "S" Signals) through the Pivot. Volume confirms an aggressive entry.

When, at the completion of the candle, Volume reads DVS (pink arrow) late in the move, worry about a Pivot retest.
Then relax, as we spot that the position is in instant MPG violation permitting a Mental stop (with its preferred
flexibility of execution, no Cancel-Replace) at Giveback level.

E = Large white candle. When the Price Action recouped >2.5 points of profits many of us jumped. +/- 3.25 points

Those of us who took strength from the continuing hefty Volume and the attraction of "closing the opening gap",
held on. The long top wick, skid marks, is worrisome however, so we briskly move the profit-locking stop under the
low of the candle and remain alert.

F = Large white candle (again a long top wick warning that Momentum has ebbed) puts us thankfully in MPG violation.
Mental stop at the Giveback level.

G = DVS (pink arrow). This late in the move DVS can only be read as the final exhaustion of Momentum. Thankfully,
this Price stretch puts our position in MPG violation, suggesting a mental (flexible) stop at the Giveback level.

4 = (Not much) Higher-High-Turns-Red. In light of our observations this should scare us out. If not, when Price
Action retraces >62% of = G, Exit Now! +/- 7 points

The high of the resulting 2-bar "P" Signal is within range of the Close. Normally are hesitant to enter off the
Close without some super confirmation. A pending Pivot retest might meet that criterion.

H = Pulled in on this large red candle with initial stop advanced above the high of the candle.

J = Large red candle. MPG violation draws a mental stop down to Giveback level.

The MA proves difficult to cross, and a 62% retracement is one of our Exit Now! Signals. SCRATCH!

After shaking out the small fry (and us) with a mid-air trap, the Bears plunge to test the Pivot
Resistance-turned-Support. Without us.

5 = Wicked 123 continuation through the Pivot. At 3:00, the last time for a PMT entry, and we are pulled in (below
the Pivot) on a huge red candle. Instant profit and instant MPG violation. Double nice! Mental stop drops to
Giveback level.

K = Large, red, Spinning Top taps on the lavender line. Exit as soon as the price Action bounces off the lavender
line. (The next candle stabs through and retracts giving another opportunity to jump ship.) +/- 5.25 points

EOD Hiccup, and the day closes back at the Pivot.

PERSPECTIVE
(Daily, bottom chart)
On Thursday trading once again closed inside the security of the
LT SW Channel (lavender channel lines).

The day candle pattern looks like a 2-bar off the LT SW Channel
floor, with Thursday taping a Bull Dragonfly kickoff. This
suggests an assault at the aqua line of Historical S/R set up.

But anything can happen on Friday! BEWARE OF TRAPS ON FRIDAY!

REMEMBER: Trade the tape, not my prognosis!

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

Thursday's PMT Chart: