BS"D

Exploit Pivot Points
Learn to Read the Tape
Daytrading Course

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DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning and welcome back,

Wednesday we scored a few small-profit trades. Nothing very
exciting, but it was a good way to flex our muscles after
lazing around all week.

Hoping for some range on Thursday!

Enjoy and be well,

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E-mini ES M0
Wednesday April 07, 2010

Wednesday opens gap-down at the Mid. The path to closing the gap is blocked by rock-hard Resistance at
the Pivot.

1 = Hit One results in a low-Volume Reversal off the Pivot. The 123 kickoff (blue arrow) is again on
very low Volume. Normally, we don't require Volume for a Bear Signal, but such weak trading during the
Opening Range is discouraging.

2 = Hit Two, and the Volume is still extremely low.

3 = Hit Three, failed TTT of the Pivot. Failed Third Time Through Corollary says to PMT Readers of the
Tape that it is time for a Bear attempt.

A = Volume comes dramatically to life (pink arrow). This is definitely a TELL for today's Price Action.

We are pulled in on a giant red candle. Per our rules, advance the initial stop above the high of the
candle.

NOTE: The Primary Objective, S1, is unproven, but nearby;
consider advancing the stop to "free trade" and a tik.

B = Exhaustion gap and large, red, inverted (Bull) Dragonfly spikes the S1 and retracts. My convention
is to put the stop in the gap instead of using the usual placement above high of the candle.

Either way, we exit when the next candle shows white. +/- 2 points

4 = Multiple bottom Reversal completes with white Bull Dragonflies. Volume is OK, and the Signal is
tight against the S1, leaving the Price Window to the Pivot well open.

C = We are pulled in on this white candle.

D = Breakaway gap and a white candle failed test of MA. Per our stop rules, move the profit-locking
stop under the MA.

E = Large white candle. PMT stop rules say to move the profit-locking stop under the low of the Candle.

Red candle of S-trap retraces >62% of = E. Exit Now! +/- 1.25 points

Two dud entries, and Price Action goes into lunchtime sideways drift mode, wafting gently north, and even
crossing the formidable Pivot Resistance.

5 = The opening gap is closed by this Doji Sandwich. No Price Window to the Pivot.

6 = Series of 123's off the underside of the Pivot. Remember this morning's TELL?

F = Volume comes to life (pink arrow), and we are pulled in on what turns out to be a small red Bull
Dragonfly.

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

H = Another large (for today) red candle. Per our stop rules, move the profit-locking stop above the
high of the candle.

Both = G and = H have elongated bottom wicks. The brakes have been applied, assume Pivot Scalp exit at
the S1.

J = Slight, late in the move DVS (pink arrow, exhaustion sign) drives a large red inverted Dragonfly to
spike the Pivot and retract. Pivot Scalp exit. +/- 2.25 points

7 = A 123 Continuation "S" Signal is followed by another, = 8, which pulls us in.

K = DVS (pink arrow) pumps a giant red candle through the Low. Per our stop rules, move the
profit-locking stop above the Low. Two elongated bottom wick candles in a row suggest a Pivot Scalp exit
at S2.

L = Exhaustion gap and giant red candle through the HighM. Normal stop placement leaves our position in
violation of Pivot Magic Trading Maximum Profit Giveback rules. Mental stop at Giveback Level.

N = Large red candle spikes through the somewhat re-enforced S2 (Daily, dotted green line of mid LT Trend
Channel), and retracts. With Volume starting to decline:

* Pivot Scalp Exit +/- 3.50 points

* Exit on the next candle, Lower-Low-Turns-White,
Exit Now! Signal. +/- 3.25 points

The PMT trading clock has run out, just as Price Action reverses, bouncing most of the way back up to the S1
at EOD.

PERSPECTIVE
(Daily, bottom right chart)

The LT Trend continues riding atop the mid-line (green dotted line) of the Trend Channel
(green channel lines), taping higher and higher contract highs.

A glance at the Long Term Monthly tape (bottom left chart) adds much to our perspective.
There, we note that in fact, the market has recovered almost exactly 50% from the 2009
low. This implies a stall, perhaps a retracement, is due before the Bulls will continue
the stretch for the 62% Fibonacci level (finally making it a reversal).

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: