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

Good morning and a good week,

Contrary to our projection in Friday's PMTJ, Price Action didn't spring
north like a cork released under water. We did score a few points
nonetheless. Price Action was very accurately defined by the Pit Pivot
Points, making it opportune for Pivot Magic Traders!

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!
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E-mini
Friday Jan 30, 2009

Following Overnight trading, Friday morning opens with a Double Doji Sandwich/red Bear Dragonfly Anomaly (Overnight,
bottom left chart) off the Pivot. Price Action heads right into the "green fog", but breaks out below in time to
meet our criterion.

A = The breakout itself is effectively a 2-candle 123 continuation (= 1, blue arrow) of the Close, an "S" signal.
Either way, we are pulled in with the initial stop advancing above the Low.

B = Large red candle. Per our PMT stop rules, move the profit-locking stop above the high of the candle. Twin
Towers DVS pair (pink arrow) indicates a stall/sag on the next candle. So late in the move, it may signal a retest
of the Close, so be prepared.

C = Nope. Large red candle through the S1. Per our stop rules, move the profit-locking stop above the S1.

2 = A 2-bar Reversal Signal behind the S1. With our stop so nearby, there is nothing to do but wait to get hit
or be safe.

Hello! The S1 retest turns into a 123. Add contracts.

D = Large red candle. Twin Towers DVS with the second bar larger (pink arrow). Stall/sag/retest indicated. Long
bottom wick, skid mark, is further warning that the Momentum is exhausted. Per our rules, move profit-locking stop
above the high of the candle, and prepare for a Pivot Scalp exit.

Sadly, we got faked out as the next 2 candles completed a mid-air Reversal Signal, which is of course one of our
Exit Now! signals. +/- 9.25 points

[SNIP]

5 = Volume picks up a bit with a 2-bar (completes on the 3rd candle) pulling us in below the S2.

H = Second healthy red candle closes below the S1. Gladly move the profit-locking stop above the S1.

J = DVS drives a large red candle to tap on the S2. S2 is well proven, so ideally, exit as soon as the Price
Action pulls back from the S2. Surely, by the time 2 points of profit are reclaimed. +/- 5 points

6 = Perhaps this red pair make for an acceptable "S" Signal, but the second long wick in a row retracting above the
S2 reads, "Exhausted Momentum". Let it go.

Thus ends our day, with a classic V-shaped EOD Hiccup (plum lines) setting up with a hit on the S3 and retracing
almost back to the S2.

PERSPECTIVE
(Daily, bottom right chart)
Friday the Bears continued the plunge. Price Action taped a large
red day candle in the lower portion of the LT SW Channel (lavender
lines). The Bear assault continued Friday on surprisingly little
Volume, leading us to anticipate at least a tap on the Channel
floor on Monday, even if is a low-Volume breather day.

REMEMBER: Trade the tape, not my prognosis!

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

Friday's PMT Chart: