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

Good morning,

The Big Boys did lots of swinging Tuesday, but we didn't get as dramatic
a pullback to the aqua line (Daily, bottom chart) as we anticipated.
All in all it]s safe to say that the BBs clearly "...still [sic] read the
Pivot Magic Trading Journal every Tuesday..." =] ;-)>

In preparation for today's FOMC, the BBs are set up for a running start
at the LT SW Channel floor (unhappy with the Fed), and they have inched
closer for a violent assault on the aqua line of Historical S/R (happy
with the Fed).

WE will trade it happily either way (and safely, and hopefully profitably),
but without standing in front of the FOMC train!!!
*****************************************************************

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.
[snip]

IMPORTANT NOTE
The current, large-ABS, Red Flag Warning days of sideways trading has
suddenly become exceedingly more risky. Until now, the BBs have been
content to cull profits from sideways trading, staying safely within
the channel, using a Hover-Dive (or the Bull reverse of that) tactic.

Over time this tape has became predictable and easily readable. This
surely cuts into their profits. So, the tactic was made more complex.
Friday, and Monday morning, the tape was cluttered with traps, as the
BBs effectively doubled their Hover-Dive profit-range with a dizzying
series of short (15 minute, 4-6 point) swings.

When trading on such choppy turf, it is almost impossible to avoid
getting wrong-footed/trapped. Prefer the exit flexibility and
efficiency of mental/soft stops, wait for signals to complete and to
prove before entering, trade clinically, unemotionally, and master
the painful art of SCRATCHING!
*****************************************************************

E-mini
Tuesday Jan 27, 2009

1 = Morning session opens with a large white Bull Dragonfly Anomaly (Overnight, bottom left chart) off the Pivot.
Supporting Volume (pink arrow) is strong, as it usually is in the opening range.

A = Pulled in on a giant white candle. By candle's end, the position is in Pivot Magic Trading Maximum Profit
Giveback (MPG). Mental stop at Giveback level.

B = The next candle, a red spinning top, is not enough to complete a reversal, but combined with the spiking tail
of the Higher-High-Turns-Red, inverted (Bear) Dragonfly, we exit as Price Action gaps past the previous candle's
close and shows red. +/- 3 points

Mid-Air reversal and Price Action bombs though the Pivot, stretching to tap on the Close.

[SNIP]

3 = Step back a bit and observe that the perfect DT Double bottom off the Close also completes a large "W" Double
Bottom at the Pivot. In light of all the Price Action swinging that we have been observing (see yesterday's
IMPORTANT NOTE, repeated above), wait till the DVS (pink = X) pumps Price Action clear of the close of the 10:20
white candle to enter.

As follows many DVS-driven extra large candles, a spinning top DVS breather displays on the tape.

C = DVS (pink = X) generates another large white candle, putting our position in MPG violation. Mental stop at
Giveback level.

This time the breather is a Doji.

D = DVS (pink = X) this time generates a large white candle, but with a long top wick indicating failing Momentum.
MPG violation at least forces us to use a Mental stop at Giveback level.

E = Average sized (small for today) candle puts our position into MPG violation. Without an excuse to move the
profit-locking stop, per our MPG rules, we must Exit Now! (If you somehow held on, the Higher-High-Turns-Red is
one of our PMT Exit Now! Signals.) +/- 5 points

Lunchtime drift continues to till late in the afternoon, gently wafting Price Action to the R1.

[SNIP]

6 = Although the Large White Bull Dragonfly stretching through the Mid is just a single tik out of range of the
Pivot, the zebra stampede of Volume bars (pink oval) closes the door to discussion on that issue.

Shutting down our monitors early today only saved us from witnessing more dangerous, high-risk, broken-field,
zigzagging Price Action (and ulcers!).

PERSPECTIVE
(Daily, bottom right chart)
[SNIP]
Sorry, not offering a prognosis till after the Fed, only advice:
DO NOT STAND IN FRONT OF A FAST MOVING TRAIN!

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: