BS"D

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

PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Once again, as we projected in yesterday's PMTJ, PERSPECTIVE section,
"... Prognosis for Tuesday ... Before any further meaningful Bull assault,
Price Action will hover below the lavender line, probably even testing
the Channel Floor."

Also once again, it was a day full of SCRATCHES. AND, once again we
gained trust in our risk-conservative PMT Money Management rules, as
they more than adequately protected our funds.

The market has plunged over a very significant precipice, and is teetering.
A Red Flag warning remains in effect.

CAVEAT
Guard your funds. Now is a good time for paper trading and practice.

[SNIP]

E-mini
Tuesday Apr 28, 2009

1 = Opening way gap-down, Price Action tapes a giant white Bull Dragonfly off the S2. Since it is only the
second candle from the open, there can not possibly be a preceding trend (REMEMBER: We trade Reversal signals,
and by definition, a Reversal must reverse a preceding trend); therefore, we look left to trade right, checking
Price Action from before the open.

Finding nothing on the continuation views, neither 5-Min. nor 10-Min., which can be considered a preceding
trend, we turn to the Overnight tape (bottom left chart). Now that's a bit more interesting!

Just before the open, a preceding trend clearly reversed off the S2 (blue arrow). At the day session open,
Price Action then tapes a large white Bull Dragonfly kickoff (orange arrow) of that reversal. As we have
discussed in the course books, a kickoff extends the signal preceding it. Thus, it might be argued that we
have an Anomaly Signal on the tape.

As with any Anomaly, we require some extra confirmation (perhaps a bit more than usual here?!?).

Volume is obviously strong, but it usually is at the open.

More impressive is the size of the candle, and the fact that it is headed north off the S2 Extreme. The drive
to close the opening gap and the rubber band pull of the Pivot will combine to make this a high-probability entry
into a giant Price Window.

A = The Bears put up almost no resistance with an average-sized Spinning Top, and the Bulls lunge forward,
pulling us in. Initial stop advances under the MidW. By the close of the candle, feel justified (like good ole
risk-conservative me) to move the stop to "free trade" and a tik.

DON'T BEAT YOURSELF UP IF YOU SKIPPED THIS TRADE.
As interesting as this call is, only the more experienced traders
would have been likely to give it the go ahead. Consider the
following to be mainly for discussion/learning purposes.

B = Large white Bull Dragonfly slams into the S1 and puts our position into Pivot Magic Trading Maximum Profit
Giveback (MPG) jeopardy. Mental stop (for flexibility if the S1 Resistance holds and we need a fast exit) at
Giveback level.

C = DVS (pink arrow) blasts a giant white candle through the Low. At that point we call it a 2-candle 123 and
add contracts.

NOTE: Late joiners might enter aggressively (it is not yet a
DVS = exhaustion danger at this point, just strong Volume support).

As Price Action crosses above the Low, we prepare to move the profit-locking stop under the Low. The candle
continues to grow we assume MPG violation and plan a mental stop at Giveback. However, after a long stretch
north, Price Action recoups >2 points of profits, and THAT is one of our Exit Now! Signals. +/- 6.25 points

2 = Red Bull Dragonfly through the Pivot/at the Close. By the time Price Action finally clears the "green fog"
Ambush Danger Zone, Volume has died off (lavender line on Volume histogram). Doubtful that there is sufficient
Momentum to exit the combined Pivot-Close gravitational fields.

[SNIP]

3 = 123 continuation Kickoff, but it is almost lunchtime, and the Volume is already quite depressed.
THIS WAS A "MAYBE" TRADE AT BEST, BUT FOR FUN AND SCRATCHING PRACTICE, LET'S WALK THROUGH IT ANYWAY.

Entry below the open of the white retest candle.

D = Failed test of MA. Personally, with such a dubious entry, I'd jump the stop to "free trade".

E = Lower-Low-Turns-White. Recognizing one of our PMT Exit Now! Signals, we bail out at the first sign of
white. SCRATCH!!! +/- 1.50 points

[SNIP]

6 = After blasting through the Close and Pivot, Price Action reverses mid-air (blue arrow):

* We of course don't enter on mid-air signals.

* We don't enter without a minimum Price Window (the Pivot is considered
always-proven S/R, effectively closing the Price Window).

* Although the support at the Close is not yet proven, we don't enter
into the "green fog".

* Nice 123 continuation "S" through the Pivot (orange arrow), but see
above list of we don'ts.

G = Strong Volume drives a large red candle through the Close, and exits the "green fog". The breakout is
well within our required time from signal criterion, and just in time for the final permissible PMT entry.
We are pulled in with initial stop advancing above the Close.

H = Large red Bear Dragonfly. Although the rules suggest to move the profit-locking stop above the high of the
candle, one might instead elect to apply the PMT Scalp Trading Pre-emptive 3-5 Stop Rule and to briskly jump the
stop to "free trade".

J = Small gap. The DVS late in the move (pink arrow) is an exhaustion indicator, thus this is an exhaustion gap
(making it 2 indicator warnings)

Large red candle. Long bottom wick skid marks make it 3 warnings now!

With so many warnings, when applying my convention of putting the stop in the gap, consider making it a mental
stop for added flexibility.

As soon as the next candle (white) retraces 62% of = J, recognizing one of our PMT Exit Now! Signals, immediately
go flat. SCRATCH!!! +/- 1.50 points

Got lots of SCRATCHING practice again today!

PERSPECTIVE
(Daily, bottom chart)

A healthy red inverted (Bull) Dragonfly day candle taps on the
LT Trend Channel Floor (green channel lines). Floor Support
holds, and Price Action retracts.

The tape now look pretty well set for another Bull assault on
the Historical S/R (lavender line). Prepare a plan, but . . .

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: