BS"D

RULES AND CAVEATS

Pivot Magic Trading Course
First rule:
"...Any time you don't know what is happening, get out!"

http://www.TradingThingys.com

MARKET IN REVIEW - LITE
Tuesesday (13 December 2005)
_____________________

Tuesday was a classic FOMC day in the e-mini. Nothing
to say and even less to trade! Short and bitter-sweet
commentary today.

Watchout for Wipsaw Wednesday today. Not much in the
way of reports (Oil supply at 10:30), so good hunting!

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

FOMC Tuesday opens, as it frequently does, at the Close. Volume goes instantly
flat and stays that way (middle chart) with the market trading (rather NOT trading)
sideways leading up to the report.

A = FOMC announcement.

Now here's what I never can understand. With all my background in Finance and
Economics I never get the right conclusion from the fundamentals:

* Everyone knew that the Fed was likely to raise the
interest rate again (that's 13 times, BTW), so why was
there so much hysteria in the market (10 point swing)
in response to news that was exactly as expected?

* Raise in interest is intended to slow down business
investment. So why is the DOW up in response?

* Raise in interest is intended to decrease spending
and encourage saving. So why are the stock indexes
up in response?

CONCLUSIONS:

* Stick with technical analysis and trade the tape!

* Don't step in front of a fast moving (FOMC) train!

1 = Giant Bear Dragonfly spikes through the R2 to the ceiling (lavender line) of the
(outside) Long-term Sideways Channel and turns into a nice "P" reversal, completing
on the third candle. DVS reversal on reduced but healthy Volume (middle chart).
Back to the Pivot? Nice setup, even if it is a bit distorted. The move never pans
out. We sit.

2 = Gorgeous Doji Sandwich "P" off the lavender line/at the R2. With Price Action
so erratic and only a half hour to EOD hiccup Danger Time zone, our risk-conservative approach advises us to turn off the monitor and find a better way to spend the rest
of the day.

B = Red Bull Dragonfly right at the beginning of the move. Not a very encouraging
sign for those Pivot scalpers who decided to risk entry into the just barely big
enough Price Window (with projected objective being R1). This move south lacks power.

EOD and Price is resting just above the R1, still inside the (outside) Long-term
Sideways Channel.

PERSPECTIVE
(Daily, bottom chart)

Again, not a lot to add to Monday's PERSPECTIVE comments.
Price Action is still bounded by the two sets of Channel
lines (outside - lavender lines, and inside - blue lines).

With Price pushed high in the Channel by the frantic
response to the FOMC, a bear retracement seems likely
Wednesday.

REMEMBER: Trade the Tape, Not my Prognostics!

Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com

Tuessday's PMT chart: