BS"D

Pivot Points Rule! (See the chart below!)

In Yesterday's Pivot Magic Trading Journal's suggested Reading of the Tape,
PERSPECTIVE section, we considered:
" . . . BBs are still fencing, waiting for the FOMC. Expect a morning move
to both indicate the BB's true preference, and to present an opportunity to
score a few pre-FOMC points. Then, get out of the way of the train.
Consider boarding again after the hysteria adjusts.

Most likely the Fed won't say anything radical, so Wednesday's morning
session could be a TELL for the late afternoon Price Movement . . . "

We not only called it, but even scored a pocket full of change as well.

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DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
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E-mini
Wednesday September 23, 2009

FOMC morning session opens at the Close, with traders' predilections masked by the fog.

A = DVS (pink arrow) Volume drives a large red candle, which slams to a halt at Pivot Support. Price Action
scurries back into the fog to retest the Close. Could be the first TELL of BB Bears pent up desires for after
the Fed.

1 = Volume is off the chart (relatively for today), as Price Action tapes a 2-candle 123 continuation through
the Pivot. We are pulled in aggressively, with initial stop advancing above the Pivot.

Price Action and Volume dribble to a halt atop the S1. Our position is in violation of Pivot Magic Trading
Maximum Profit Giveback (MPG) rules. With no excuse to tighten the stop and Price Action stalled, possibly
reversing, our MPG rules warn us out. +/- 2.25 points

Definitely counting that as the second Bear TELL.

2 = Perfect Double Bottom off the S1. No Price Window to the Pivot, but no matter, the Volume has dropped to
whisper mode.

The rubber bands to the Pivot and Close gently exert their pull and Price Action resubmerges in the "green fog",
where traders enter pre-FOMC watch and wait, silent/stealth mode.

B = BAM! FOMC time!!! Giant white candle (with no preceding signal, alas) blasts through the R1 on DVS (pink
arrow). The short-lived zig-zag move exhausts Momentum with another DVS at the R2.

3 = R1 is proven, closing the Price Window, so these lovely signals go by.

Once Price Action crosses back into the LT SW Channel (Daily, bottom chart, purple channel lines)/through R1
(purple arrow) on huge DVS (pink arrow), trading has sadly traveled too far from the signal to be
risk-conservative for a PMT entry.

We do, however, now have pretty substantial confirmation of our two morning TELLs. Bears are heading south.

4 = Retest of the LT SW Channel Ceiling fails. Volume jumps, permitting a very aggressive Pivot Scalp entry to
the proven Close. With high probability of Momentum carrying Price Action to/through the Pivot, enter
immediately below R1.

Still confident of our reading of the TELLs, we must be prepared to make a lightening decision at the Close.
We must decide to either Pivot Scalp exit, or to convert to PMT Scalp tactics.

We hate trading in the "green fog" Ambush Zone. Initial stop nicely advances above the High/"free trade."

C = While preparing to Pivot Scalp exit, our stop rules permit us to place a stop (mental, of course, for exit
flexibility) above the high of the large red inverted (Bull) Dragonfly.

As soon as the next candle spikes through the Close and taps on the Pivot, jump the mental stop above the Close
and prepare to exit.

D = Large red candle spikes through the Pivot. Volume is still strong, so let profits ride.

Personally, I really hate hanging out in the fog, so I'd drop the mental stop to the lower edge of the fog (not
a PMT rule) to prevent re-entry.

E = No matter, as DVS (pink arrow) slams a giant red candle into rock-hard S1 Support. Our position is in MPG
violation. Mental stop at Giveback level.

With Volume likely exhausted, and the clock showing "EOD Hiccup Danger Time", we fire our sell order just short
of the mental Giveback level stop. We get slipped, and then fooled, but we do take +/- 6.50 points to the bank.

EOD Hiccup (plum lines) is right on time, with the classic "V" check mark pattern, this time continuing the
foreTELLed Bear charge Momentum to the extent of poking briefly through the LT SW Channel Floor (Daily, purple
line) before Price Action finally comes to rest atop the S2.

PERSPECTIVE
(Daily, bottom chart)

Narrow LT SW Channel (purple lines) just barely contained Wednesday's large red
Bear Dragonfly day candle. That ominous red monster portends ill for the new
contract high.

F = The preceding Retracement on the climb to supposed recovery dipped well below
the 62% Fibonacci retracement level (red line), but it did fall short of a full
retracement/retest.

With Wednesday's bomb hovering overhead, the Fib 50% level (dashed red line)
seriously looks about to be threatened. Probably without even a breather day in
between. Be prepared.

REMEMBER: Trade the Tape, Not my Prognostics!

Asher
=] ;-)>

Pivot Point Daytrading Course
http://www.tradingthingys.com/PMTJ/Commodity%20Day%20Trading.html

Wednesday's PMT Chart: