BS"D

DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Reading the Tape and Pivot Point trading paid off.

We got some nice bites out of the day's Price Action on Thursday. Made
up for a week of pain!

As we predicted in yesterday's Pivot Magic Journal, PERSPECTIVE section:
" . . . The new LT Trend Channel floor (green channel lines) and the Fib
Retracement levels [were] retested!"

TGIF!!!

Enjoy and be well,

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

E-mini ES U0
Thursday August 19, 2010

1 = Minimum preceding trend gives way to a 2-bar "P" Signal off the Pivot, smack into the "green fog"
Ambush Zone.

A = Large red breakout candle exits the fog, pulling us in. Initial stop advances above the Close.

B = It is 10:00 Action Time, and a 123 S-trap gives way to a huge, DVS-driven (pink arrow) red candle
ripping through the S1/62% Fib (purple line), plunging almost to the S2.

Don't know what just happened. Surely this is not a response to a rather belated (July) Leading
indicators report. Maybe the Jobless claims numbers just sunk in? Either way, DVS clearly exhausted
Momentum. Exit Now! +/- 9.50 points (even got positive slippage, as the last of the Momentum carried
= C to tap on the S2)

2 = Test of the S1/62% Support-turned-Resistance fails with a 2-bar "P" Signal.

D = Pulled in on large red candle. Initial stop advances above the high of the candle.

E = White Spinning Top S-trap took out some of us for breakeven, but most of us are still holding as
this large red candle plunges toward the Primary Objective, S2. Position is in Pivot Magic Trading
Maximum Profit Giveback (MPG) violation. Mental stop at Giveback Level.

NOTE: ABS today is quite bloated. Feel comfortable to expand stop and MPG placement.

F = Late-in-the-move DVS (pink arrow, exhaustion indicator) generates a red Bull Dragonfly, which
spikes through the S2 and retracts. Pivot Scalp Exit! +/- 4.25 points

3 = For almost a full hour, Price Action struggles sideways with the S2 Support and the MA before taping
a Doji Sandwich.

G = It is getting late, but the Volume is strong (pink arrow) and we are pulled in on large red candle.
Initial stop advances above the high of the candle.

H = Large red candle puts our position in MPG violation. Mental stop at Giveback. Not sure how long
into lunchtime this Volume will hold, so we are glad when our rules force us into using a mental stop!

J = Large red candle is more like average-sized for today's ABS, but since it is a Spinning Top/exhausted
candle we warily jump our profit-locking stop above the high of the candle.

K = DVS (pink arrow) is a second indicator of failing Momentum. The end of the move is nigh. Position
is in MPG violation and we have no excuse to move the stop above a smaller than average candle. Our MPG
rules say to exit immediately. +/- 4 points

Volume drops to lunchtime levels, and sideways drift ensues, forever!

4 = A 123 Continuation at the S2. Volume is still at lunchtime lows.

L = Volume jumps to life (pink arrow), and some of us consider entry.

Entry here is motivated by greed. We have already had a pretty decent day, Volume isn't really that
strong, and the PMT clock has run out. This is not a good bet.

Let's play it out and see. Assume entry above the S2, with initial stop under the S2.

N = Large white candle puts us in MPG violation. Mental stop at Giveback Level/"free trade" and a tik or
two.

We exit as the next (red) candle retraces >62% of = N. With slippage and reflex time, this fiasco paid
about 1.50 points. Not hardly worth the risk nor the ulcer!

PERSPECTIVE
(Daily, bottom chart)

Thursday's large red day candle plunged through the purple 62% Fib Retracement
and the new LT Trend Channel floor (green channel lines).

The red 50% Fib presents a pretty strong invitation for the BBs 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: