BS"D

Good morning,

E-MINI SPENDS 5 1/2 HRS SIDEWAYS AT THE S2 PIVOT LEVEL
That headline is meant to prepare you for Friday!

Now let me say, "Yay!" Yesterday we said:
"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."

We were, AND it was nicely profitable!

TGIF!!!

Enjoy and be well,

******************************
DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
******************************

E-mini
Thursday September 24, 2009

1 = Thursday's open follows through from where Wednesday left off, with an Anomaly (Overnight, bottom left chart,
blue arrow) 2-bar Reversal Behind/At the Close. We're always slow to accept Anomaly Signals off the Close, and
Volume is not yet raging, so we stand firm.

Retesting the underside of the Close, a 123 Continuation "S" Signal might be considered the second in the pair
of self-confirming signals we prefer for an entry off the Close. The red Bear Dragonfly kickoff candle eases
free of the "green fog", continuing the 2-day plunge by exiting the LT SW Channel Floor (Daily, bottom right
chart, purple lines). A little Volume, and we'll be happily pulled in on the next candle.

A = Huge Volume (pink arrow), and we are pulled in on a giant red candle closing below the Low. Initial stop
advances above the Low, for instant, locked-in profit. Yes!

B = Another monster DVS blasts a giant red candle through the MidW, to the S1. Normal stop placement, above
the MidW, will leave the position in violation of Pivot Magic Trading Maximum Profit Giveback (MPG) rules.
Mental stop at Giveback level. Nicely, the mental stop also affords rapid-fire exit flexibility
(no Cancel-Replace) should the S1 Support fight back.

NOTE: The ABS today is very large, thus we start considering
larger stop spacings. Especially when profits are locked in
and running!

For a dizzying perspective, take a gander at the 10-Minute tape (bottom center chart). The 2-day plunge, which
started shortly after yesterday's FOMC obligatory hysteria fizzled, has gained additional Momentum today.

C = A 2-candle 123 Continuation through the S1. Might even enter it from scratch, though the move is getting
rather long, 5 red candles in a thin-line-trend row. Certainly, as we move our stops above the S1, we add
contracts.

D = DVS (pink arrow) and the long bottom wick on the flat-headed red candle combine to suggest that a time for
the market to breathe (retest the S1?) is coming. Per PMT stop rules, move the profit-locking stop above the
high of the candle.

NOTE: In light of our reading of the tape, above, the need to
recommend a mental stop seems superfluous here.

By the time the next candle (white Bull Dragonfly) retraces > 2 points, we have a PMT Exit Now! Signal.
+/- 8.25 points

Groan out loud (no PMT rule for this) as the two-colored Twin Towers pair of long tailed candles do not stand
the test of longevity. The S1 retest, after shaking us out, converts to a mere stall. Price Action continues
the 2-day plunge to a one-toe tap on the S2.

2 = S2 Support holds for a 2-bar "S" Signal Reversal. Oops, it is a DVS-based Reversal Signal and we don't trust
them for longevity.

NOTE: Interesting that the mistrust of DVS-based signals was not
considered for the mid-air Reversal (= D, would have kept us in
the trade?); whereas it is considered critical for a resounding
Reversal Signal of a Primary PL.

This is because of our basic Money Management and trading philosophy,
"Risk-conservative:let profits ride."

In the first case, = D, the mid-air reversal in range for a PL retest,
presents the serious risk of giving up profits. This disrupts the
Risk-conservative side of the statement. The position is no longer
valid. Even should the longevity mean only a brief stall,
statistically, the odds are strong that our Money Management Giveback
rules will be violated.

In the case of = 2, since the profit potential is suspect from the
beginning (and the Volume dwindles as lunchtime approaches), Price
Action is not reliable to achieve the S1, and the move will likely
collapse back to an S2 retest. So, there aren't really any profits
to let ride!

Squeezed between the MA Resistance and the S2 Support, Price Action turns permanently sideways. Some
aggressive rumblings at the front line, but with nothing further to trade gracing the tape.

PERSPECTIVE
(Daily, bottom right chart)

My reading of the 5 1/2 hour freeze in Price Action is that this pause IS the breather
day following the massive plunge. As we said yesterday, a breather day candle,
interrupting the 50% Fib level (red dashed line) assault, may not be necessary.

With all that, the term breather is deceptive here. The MA looks like the gate at the
races just before the bell, with Volume (= E) surging, high-strung thoroughbreds (Bears)
struggle, false starting, prancing, revving to get the charge started.

The need for a breather day probablyeliminated, expect the Bears to bolt from the gate
the minute the bell rings on Friday!

BEWARE OF TRAPS ON FRIDAY

REMEMBER: Trade the Tape, Not my Prognostics!

Asher
=] ;-)>

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

Thursday's PMT Chart: