BS"D

DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Trading a LT SW (Long Term Sideways) Channel is always fun.

After eating a scratch for breakfast, we took a nice bite out
of the followup morning move. Our Money Management Rules kept
us sidelined and out of trouble for the rest of the day.

More fun on Tuesday!

Enjoy and be well,

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

E-mini ES Z0
Monday October 04, 2010

1 = Monday morning opens slightly gap-down, and immediately returns to close the gap with a 2-bar Reversal.

A = Price Action exits the "green fog" and crosses below the Pivot. If we count the breakout as a 2-candle
123 (self-confirming pair of signals), we are pulled in. The giant red candle crosses below the Mid. Move
the profit-locking stop above the Mid/"Free Trade".

B = We are taken out at our stop during the first minute of this giant Spinning Top Doji.

2 = Multi-bounce 123 off the Pivot.

C + We are pulled in under the Mid, with initial stop advancing above the MA.

D = Small (breakaway?) gap and a large red candle. Per our stop rules, move the profit-locking stop above
the high of the candle. Alternately: since this is well into the move from the Pivot, use my convention
and place the stop in the gap.

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

F = Price Action stalls for a small S-trap, and then the tape presents a healthy red Marubozu (full-bodied
candle without wicks). Tighten the profit-locking stop, above the high of the candle. Since we are not
certain that the troops will rally into the hole punched by this sumo candle, combined with the proximity
of the S1, use a mental stop.

G = Next candle spikes through the S1, and the one following makes it a second red candle closes below the
S1. Move the profit-locking stop above the S1. Note that this is a 2-candle 123, which invites us to add
contracts.

H = Large, red, inverted (Bull) Dragonfly. From the skid marks, it appears that the brakes have been
applied. Per our rules, move the profit-locking stop above the high of the candle.

J = Large red candle. Exhaustion gap and Twin Towers Volume pattern (pink arrow). The next candle will
stall/sag. Be aggressive; place the stop in the gap.

K = Black Volume Bar of Death Doji (pink arrow). Exit on the first sign of white (either the next Doji
or the white candle following). +/- 6.50 points

3 = Lunchtime drift is punctuated by a sudden burst of Volume and a first failed test (red arrows) of the
S2/LT SW Channel Floor (Daily, bottom chart, blue lines).

Sideways lunchtime drift tests the S2 a second time (green arrow), and a third time (orange arrow). That
makes it a failed Third Time Through (TTT). The Failed TTT Corollary suggests an assault on the S1, but
that's a long way to travel, and Trading Volume is way too sleepy for us to consider entry. Pass.

4 = Fourth Failing Test is also without Volume confirmation. We now shut down our monitors.

EOD Hiccup (plum lines) is right on time, and (vaguely) tapes the classic "V" checkmark shaped pattern.

PERSPECTIVE
(Daily, bottom chart)

Although the top limit is not very distinctly defined, a LT SW Channel
(blue channel lines) has formed. See our chapters on LT SW Channels
in the Pivot Magic Trading Course books. Understand how they affect
our Pivot Levels (PLs), and review how to trade them safely.

BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!

REMEMBER: Trade the Tape, Not my Prognostics!

Asher
=] ;-)>

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

Monday's PMT Chart: