DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
As we anticipated in yesterday's PMT Journal, Wednesday taped a
Bear retracement into the LT Trend Channel (Daily, bottom right
chart, green channel lines). By EOD, however, the candle turned
white for no overall Price drop.
We at one SCRATCH, but did have a couple of interesting trades.
BTW, rather expecting more Bear action Thursday.
Enjoy and be well,
E-mini ES Z0
Wednesday November 10, 2010
1 = Morning opens with a quandary at the Close:
From the Overnight (bottom left chart, orange arrow) we see a 123 kickoff. Not only don't we
take 123 Anomaly trades, but additionally, we always hesitate to take even Anomaly "P" Signals
off the Close.
Next, the tape presents a 2-candle 123 below the Close. Now we have a self-confirming pair.
Nevertheless, they both are 123 "S" Signal Anomalies. We still have no justification per our
rules to enter.
On the other hand, our technical analysis from yesterday's Daily tape strongly suggested a Bear
move into the heart of the LT Trend Channel and Price Action has left the "green fog".
DISCRETIONARY TRADE - NOT A STANDARD PMT TRADE - ADVANCED EXPERIENCED TRADERS ONLY
A = Volume is steadily increasing, and, as Price Action exits the "green fog" AND crosses below
the MA, advanced experienced Readers of the Tape may elect to get pulled in on a large red candle.
Initial stop advances above the high of the candle for well-controlled At Risk.
B = Giant red candle puts the position in violation of PMT Maximum Profit Giveback (MPG) rules.
Mental stop at Giveback Level locks in profits.
C = Scary S-trap resolves with another large red candle through the Low. Move the profit-locking
stop above the Low.
D = Twin Towers DVS (pink arrow) indicates a stall/sag is next. No matter, as our rules tell us
to exit as the tail of the large red inverted (bull) Dragonfly spikes the S1 and retracts.
+/- 6 points
2 = Double Bottom off the S1.
E = Large white candle pulls us in, with initial stop advancing under the MA.
When the next 2 candles retrace >62% of = E, taping a PMT Exit Now! Signal, we SCRATCH!
3 = If we include the reversing candle, this is a possible entry. Volume dies and we pass.
4 = Counting the Doji, this is a third higher low (lavender line) "P" Signal off the MA. PMT
rules call it a tradable "S" Signal.
F = We are pulled in on this disappointing white candle. Initial stop advances under the MA.
We prepare to SCRATCH, but . . .
G = Second healthy candle above the Low. Per our stop rules, move the profit-locking stop under
the Low. Personally, with lunchtime approaching momentarily, I'd prefer to move it to Free Trade
and a tik.
H = Large white candle. Our stop rules advise to move the profit-locking stop under the low of
J = A brief S-trap stall, and the Bulls resume the assault. Large white candle slams into the
Close. Per PMT stop rules, move the profit-locking stop under the low of the candle. We dislike
pausing in the "green fog" Ambush Zone, so make that a mental stop.
K = Medium sized candle crosses the Close, but again closes inside the fog. Our position is in MPG
violation and, with no justification to move the stop, our rules say to exit promptly. (Surely
when the next candle is unable to escape the fog as well.) +/- 5 points
Volume goes into lunchtime drift mode, so when the next candle tapes a 2-bar Reversal Signal we let
it pass. Nothing to entice us to trade away from the Close.
Lunchtime drift ensues along the underside of the Close.
A sudden burst (no signal associated with it), and Price Action climbs to drift under, and then
above, the Pivot straight through to EOD close.
(Daily, bottom right chart)
Medium-sized white Bull Dragonfly day candle dipped deeper into the
LT Trend Channel (green trend channel lines) on Wednesday, but,
disappointingly, closed up a few points for no net drop in Price.
The tape still looks prepared for a more serious retracement.
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
REMEMBER: Trade the Tape, Not my Prognostics!
Pivot Point Daytrading Course
Wednesday's PMT Chart: