BS"D

DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Advanced, experienced traders scored nicely on Wednesday.

Sad, but from the massive run down, beginners barely eked out expenses.
At least the Pivot Magic Trading Money Management rules protect them
from losses!

Now it looks like the retracement has failed. Stay alert, the market
is full of tricks and traps these days!

Enjoy and be well,

******************************

E-mini ES U0
Tuesday July 20, 2010

Wednesday July 21, 2010

Session opens gap-up, firmly heading back down to close the gap.

1 = Double bottom (self confirming pair) at the Close/62% Fib Retracement (purple line). Move doesn't
prove.

2 = Bear Signal also does not prove.

3 = 123 Continuation "S" Signal off the Close.

A = Pulled in on what turns out to be a rather weak Doji through the MidW. Advance the stop above the
MidW.

B = DVS (pink arrow, exhaustion implied) blasts a large red candle through the MidM. Per PMT stop
rules, move the profit-locking stop above the MidM.

C = Bull DVS generates only a tiny white Doji candle, but the Bears cannot recover on the next candle.

CHOICE 1: Read the handwriting on the wall and exit briskly.
+/- 2 points

CHOICE 2: Wait and see and get taken out several candles later.
+/- 1 point

Lunchtime drift travels sideways on the underside of the Close/62% Fib.

4 = Not anything in the Vitals to suggest entry on this mid-lunch Reversal.

5 = Volume jumps to life (pink arrow), and we search aggressively for permission to enter. There is
no apparent preceding trend for the 2-bar (blue arrow). Upon further examination, we note that it is
actually a Double Top, including the 1:35 bounce candle for a preceding trend. A bit weak, but on the
higher time frame chart (10-Minute, bottom left) the Price Action displays a clean reversal with a
preceding trend.

We happily note that this is also a 2-candle 123 (orange arrow) and enter aggressively.

CHOICE 1: When the candle retraces > 2 points Exit Now! +/- 2 points

CHOICE 2: More experienced traders of the tape, assume the Momentum
will carry Price Action south for at least one more candle and briskly
jump the stop to "free trade" and a tik.

CHOICE 2 (discretionary) is actually almost without risk (safe even
for good ole risk-conservative me), and boy did it pay off.

D = Giant red candle plunges into Pivot Magic Trading Maximum Profit Giveback (MPG) violation (consider
expanding for the bloated ABS).

E = Huge red candle through the Pivot. This time the late-in-the-move DVS (pink arrow), and the
likelihood of a Pivot retest, warn us out as Price Action recoups >2 points. +/- 9 points

With a couple of serious S-traps on the way, Price Action finally crosses the 50% Fib Retracement
(red line) and achieves the S1 Primary Objective.

6 = A bit small, but with decent Volume (pink arrow), some of us might have taken this 2-bar off the S1
when it broke out on the next candle (blue arrow).

H = Large white candle encounters red line Resistance. Per the rules, if you took this trade, move the
profit-locking stop under the low of the candle, only to SCRATCH! as the next candle retraces >62%
(implying an S1 retest).

Waters are a bit choppy for beginners today!

Price Action dribbles sideways at the red line to EOD.

PERSPECTIVE
(Daily, bottom right chart)
Large red day candle spans the entire 50%-62% Fibonacci Retracement Channel.

The tape has done a complete turnabout, going from a Bull Retracement
TA reading to a probable failed test reading.

BE PREPARED FOR ANYTHING ON THURSDAY AND FRIDAY!

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: