Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
******************************

PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

In Monday's Pivot Magic Trading Journal, PERSPECTIVE section, our market
analysis proposed:
"Friday . . . the Bear assault continued on surprisingly
little Volume, leading us to anticipate at least a tap
on the Channel floor, even if Monday is a breather day."

We sure nailed that one!

Tuesday should make for interesting Pivot Point trading!

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]

*********************************************************

E-mini
Monday Feb 02, 2009

Overnight trading saw the bears punch through the LT SW Channel floor (lavender line). Preceding the morning
session open, Price Action reversed direction and headed back to re test the Channel floor.

1 = Multi-hit continuation Anomaly (Overnight, bottom left chart) at the S1. We don't enter on "S" Signal Anomalies.

2 = In light of all the above, this high-Volume (pink arrow), breakaway gap, 2-candle 123 continuation pulls us in,
just above the MA. By the close of the candle it is justified to move the stop to "free trade" and a couple of tiks.
Nice way to start a trade.

A = Large white Bull Dragonfly through the Low. Per our stop rules, move the profit-locking stop under the low.

B = DVS (pink arrow, late in the move this is an exhaustion of Momentum warning) generates a large white candle
through the lavender line. PMT rules say to move the profit-locking stop under the LT SW Channel floor. The long
top wick/skid mark is an additional sign that Momentum is flagging.

Large red Bear Dragonfly is a mid-air Reversal signal. Channel floor retest is coming, and the tape is presenting
one of our Pivot Magic Trading Exit Now! Signals. +/- 6 points

NOTE: Remember, we do not enter a signal off the floor or ceiling (Historical S/R)
of a Sideways Channel unless:

* The signaled move is into the Channel.
In which case, per our SW Channel trading rules, the floor/ceiling
are promoted to Primary Pivot Levels (PLs).

* The signaled move is out of the Channel,
but the floor/ceiling coincides with, and reinforces a Primary PL.
In which case, the signal is simply off the PL, with S/R strengthened
by the lavender line.

[SNIP]

4 = First batch of BBs start to return from drinking lunch around 1:00 and tape a Double top off the Close.

C = Large red candle/failed test of MA pulls us in for a LT SW Channel floor retest. Advance the stop above the MA.

D = Large red Marubozu (full-bodied candle with no wicks). This sumo candle blasts Price Action out of Close retest range into Pivot Magic Trading Maximum Profit Giveback (MPG) rule violation. Mental stop at Giveback level.

E = Exhaustion gap and Doji Black Volume Bar of Death weakly continue the rally into the hole punched by the sumo
Marubozu. The entire Doji is lower than the Marubozu, so, though the Bears are wrung out, gasping for breath, they
remain committed to a test of the lavender line. The further implication is that they have not got enough power left
to succeed on this attempt. Immediately think Pivot Scalp exit.

The Bears in fact invest the last energy to pump out a LT SW Channel floor test. Pivot Scalp Exit Now! +/- 5 points

[SNIP]

7 = A "P" signal preceded by a trend, in this case, would be a tradable "S" Signal. However, the S1 Support is
proven, effectively closing the Price Window. No trade.

NOTE: If somehow we were in this trade, the Doji/Black Volume Bar of Death
would be read much the same as similar pattern in = F, above. I.e., with the
Primary Objective, S1, within easy reach, and virtually the whole Doji below
the preceding candle, prepare for a Pivot Scalp exit. When S1 is tapped that
will certainly expend the last of the Bear Momentum.

8 = Triple bottom or Failed TTT. Either way, exactly at 3:00 Reversal Time (which is final entry time for PMTers),
Volume (pink arrow) supports entry into an assault on the semi-permeable lavender line. Aggressive entry above the
MA is appropriate.

H = Large white candle through the Low. PMT stop rules suggest moving profit-locking stop under the Low.

Blowback from slight Resistance at the lavender line takes us out at the stop. +/- 1.25 points

Most unfortunate, since the assault immediately resumes, and continues north to spike through the Close (= J).
Another 9 points of profits forfeit.

PERSPECTIVE
(Daily, bottom right chart)
Monday's small, red, inverted (Bull) Dragonfly, breather candle gently tested
the LT SW Channel Floor (lavender line), and closed hovering near the lower
confines of the Channel security.

From the trading tape (top, 5-Min chart) we learn that the Channel Floor Support
is semi-permeable, but with leaks. A single massive Bear push might easily exit
the Channel. Alternately, the long, bottom, spike-through wick may well alter
this breather candle to read, "skid marked, pre-reversal candle".

Tuesday will be interesting!

REMEMBER: Trade the tape, not my prognosis!

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

Monday's PMT Chart: