BS"D

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

Good morning,

The upswing portion of the long stair-stepping intraday trend (aka, the
traps we warned of in yesterday's Journal) made for short in and out
trades. Following such a long period of large-range, bloated ABS trading,
we got spoiled. Small bites now feel somewhat disappointing, but they
do add up (+/- 10 points worth on Wed.)

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]

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E-mini
Wednesday Mar 11, 2009

Morning session opens gap-up and climbs on strong Volume.

[SNIP]

2 = There's the Reversal Signal. Entry can only be below the R1.

A = Large red Bear Dragonfly pulls us in. Initial stop advances above the R1.

B = Small Doji followed by a larger one. During the white portion of the second Doji (a Lower-Low-Turns-White,
one of the PMT Exit Now! Signals) we SCRATCH!

3 = Lower High/Failed Second Time Through attempt/Reversal Signal. Volume is strong. Nice, but not mandatory
for a Bear entry.

C = Pulled in on large red candle with a long bottom wick.

D = Failed test of MA. Per PMT stop rules, move the profit-locking stop above the MA, "free trade" plus.

E = Average sized red candle puts our position in Pivot Magic Trading Maximum Profit Giveback (MPG) violation.

* Long bottom wick; Price Action is skidding to a stop.
* The slightly DVS (pink arrow) suggests that a TTT attempt at the R1 Resistance is likely.

With no excuse to tighten our stop, that clinches our decision to follow our MPG rules to the letter.
Exit Now! +/- 2 points

4 = Third Lower Low (green line) makes this failed TTT (Third Time Through) an extra-good risk for a move to
close the opening gap. (Reread: PMT Course book, Vol. III, page 69, Failed TTT Corollary)

F = Volume jumps to life (pink arrow), and we get pulled in on a giant red candle. At the end of the candle
avoid MPG violation by jumping the stop to "free trade" plus a tik.

G = Large red candle. Per our stop rules, move the profit-locking stop above the high of the candle.

The instant the next candle shows white, exit with alacrity. (Lower-Low-Turns-White is one of our Exit Now!
signals.) +/- 3.25 points

5 = The fourth Lower-Low in the Bear trend is a "P" Signal off the MA, which is an acceptable "S" Signal.
Mid-lunchtime, the trend, the pull to close the opening gap, and gravity may have enticed advanced readers of
the tape (sadly, not good ole risk-conservative me) to enter below the MA. If so, beware of the high rise of
the stair stepping trend.

6 = The opening gap is officially closed. Large white Bull Dragonfly "P" Signal behind the Close (this is also approximately in the area of Historical S/R that we noted yesterday, Daily, bottom chart, lavender line).
Volume is strong, confirming, and the plunger is pulled back on a well-stretched MA sling shot.

H = Actually, this is a self-confirming 2-candle 123 as well. Entry as healthy white candle clears the "green fog".

J = Giant white kickoff candle gets slung across the MA, all the way into MPG violation (YAY!). Mental stop at
Giveback level.

K = Price Action stabs north and retracts. By the time 2 points of profits were reclaimed, even before the tape
finally displays a Black Volume Bar of Death (pink arrow), Exit Now! +/- 2.50 points Aaarrrggghhhh!

[SNIP]

Classic "V" check mark shaped EOD Hiccup (plum lines) was right on time for an effectively zero-gain day.

PERSPECTIVE
(Daily, bottom chart)
Following a vigorous blip north, the Bulls settled for a breather day
following Tuesday's long run up.

The smallish white, Bear Dragonfly day candle tells us that the Bulls
will be required to appear in force on Thursday if they hope to avoid
another devastating plunge.

REMEMBER: Trade the tape, not my prognosis!

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

Wednesday's PMT Chart: