BS"D

Good morning and a good week,

The profitable exploitation of Pivot Points:
The Average Bar Size (ABS) Friday was bloated, so although we only got
bites out of the large-range round trip Doji day, they were pretty
decent bites!

In our last Daily Pivot Magic Trading Journal, PERSPECTIVE section, we
ambivalently projected:
" . . . So now we have to expect either a breather/bounce or a major
market collapse . . . "

Wonder of wonders, we got both, a giant Bear Doji! LOL!

Enjoy and be well,

*********************************************
DAILY
PIVOT MAGIC TRADING JOURNAL - EXCERPT
*********************************************
E-mini ES H0
Friday February 05, 2010

1 = Morning session opens with an Anomaly (Overnight, bottom left chart, blue arrow) off the Close. We
hesitate to take Anomaly Signals off the Close. Being Friday, the Signal was a trap, but it did convert
(orange arrow) to a nice 123, making it a self-confirming pair.

A = Pulled in on large red Bear Dragonfly. Advance initial stop above the high of the candle.

B = Nuts! Black Volume Bar of Death (pink arrow) Doji. We SCRATCH! as the next candle shows white. That
too turns out to be another trap, and Price Action continues south to test the S1 Support.

2 = Double Bottom/DT Multi-bottom off the S1. Volume confirms (pink arrow) for an aggressive entry on the
large white candle through the MA. Initial stop advances under the MA, for almost no initial At Risk.
Nice start, if the move will just continue!

C = Small gap and a large white Spinning Top (sort of) candle. Per our stop rules, move the profit-locking
stop under the low of the candle. The long upper wick suggests that we should be prepared to Pivot Scalp
Exit, and that we should use mental stops for exit flexibility.

NOTE: ABS today is quite bloated. Decision to expand Stop placement
and Maximum Profit Giveback Levels is appropriate.

D = Large white candle through the Historical S/R re-enforced Low (Daily, bottom right chart, blue line),
spikes the Close, and retracts.

* 10:30 Reversal Time

* Price Action seems stalled in the "green fog" Ambush Zone.

* Nearest stop placement (under the Low) risks almost 3 points,
with little promise of additional profit acquisition.

* Fridays are almost always full of traps.

Best choice is Exit Now! +/- 5.50 points

Second choice, stop under Low, and get stopped out +/- 3 points

3 = Double Top (automatically a self-confirming pair, isn't it) off the Close.

E = Pulled in on large red candle through the MA. Advance the initial stop above the MA.

Price Action stalls threateningly, but the MA holds strong. Some of us, sadly, jumped ship early here.

F = One more spike, and the rest of us were prepared to SCRATCH.
Large red candle/failed test of MA. Take this excuse to scoot the profit-locking stop to "free trade"
and a tik.

G = Giant red candle puts our position in violation of PMT Maximum Profit Giveback (MPG) rules. Mental
stop at (expanded) Giveback Level.

H = Red candle puts our position in MPG violation once again. The candle is small for today, but it is
still a 2-pointer and there is no sign of waning Momentum. We can safely assume the Bears will continue at
least to the next Primary Objective, S1.. Stretching it a bit, call it large candle and move the (mental)
stop above the high of the candle per our stop rules.

J = DVS (pink arrow, late in the move signals "end of move"). It is almost lunchtime, so a stall into
sideways drift is very likely. As the Price Action spikes the S1 and retracts, Pivot Scalp Exit.
+/- 6.50 points

4 = Although the large white Bull Dragonfly is a "P" signal on it's own, the pair of candles has
characteristics of a 2-bar. Volume tapes a pair of DVS bars, rendering it less enticing. Volume goes
lunchtime AND turns red. Pass.

5 = A nice 123 off the underside of the S1 takes off on strong Volume (pink arrow), pulling us in aggressively.

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

BTW: I'd personally have moved the profit-locking stop to "free trade" on the previous candle (blue arrow).
No PMT rule for this, just experience and nervousness about the early resumption of mid-TGIF lunchtime
low-Volume trading.

L = DVS drives a large red candle. Late in the move DVS suggests expended Momentum. Prepare for Pivot Scalp
Exit at first sign of S2 Support. The position is in MPG violation so place a mental stop at Giveback Level.

N = Twin Towers Volume Formation (pink arrow). A stall is coming. No matter, because we exit as soon as
Price Action spikes the S2 and pulls back above. +/- 7.75 points

6 = Massive 2-bar Marubozu completes a Double bottom off the S2. Would love to enter here (would have had
trouble at the blue arrow), but the Volume has drooped a bit, and is very confused, giving us no confirmation.

P = Exactly at 3:00 Action Time, Volume jumps to life, and Price Action runs wildly up, through the S1, through
the blue line, and into the "green fog". We can find no acceptable PMT entry signal, and therefore sit on the
sidelines, alternately moaning and shouting.

EOD closes back at the Close for a zero net price change Doji day.

[SNIP]

REMEMBER: Trade the Tape, Not my Prognostics!

Asher
=] ;-)>

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

Friday's PMT Chart: