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
Tuesday (18 January 2005)
_____________________

Tuesday morning opens slightly gap-down, outside the long-term Sideways
Channel (light blue lines), below the Pivot.

1 = Valiant attempt, kick-off and all (9:55 red Bull Dragonfly), but the
the Bulls can't penetrate the Pivot/Channel floor. Move doesn't prove.
No entry.

2 = Doji Sandwich through the Pivot. Volume (middle chart) confirms.
Entry placement, per PMT rules, is above the Channel floor, of course.

A = Second healthy white candle closes above the Pivot. Per our rules,
move profit-locking stop under the Pivot, reducing Undefended At Risk to
almost zero.

B = Volume continues to grow (middle chart), as large white candle
attacks the R1, passing easily through the High. Move profit-locking
stop under the High.

C = Second healthy white candle closes above R1. "Thin line" almost
vertical current trend. Breather is due as Price Action encounters R2.
Volume is still massive. Taking the more aggressive application of our
rules, call this a large white candle and move profit-locking stop under
the low of the candle.

D = Volume is dropping off for lunch time. Failed test of MA. Price
Action is up against the R2 Extreme PL, let's lock in profits (without
strangling the move). Per our rules, move profit-locking stop under the
MA.

E = Second white candle closes above the R2. Odd mid-lunch Volume spike
(middle chart). At first glance this appears to be a Desperation Volume
Spike, but decent Bull Volume immediately resumes (green volume bars).
Turns out to be a heroic push towards the R3. Move profit-locking stop
under the R2.

F = Failed test of MA. Move profit-locking stop under the MA.

Price Action turns sideways for the remainder of the lunch time. Our
profits are defended (without killing the position). Hold (and smile!)

G = Price Action overruns the R3 and charges on toward the Channel
ceiling (light blue line). What appears to be a Desperation Volume Spike
turns into a weak Doji Sandwich. The Doji and Bear Volume bars are
increasingly diminutive (middle chart) as the reversal immediately fails.

We are looking actively for opportunity to move stop tighter under the R3.

H = The Sumo of candles: White Marubuzo (full-bodied candle with no wicks),
second healthy white candle, closes above R3. Briskly move profit-locking
stop under R3.

Slamming against the hard Channel ceiling, the Price Action Reverses.
This time Volume confirms the reversal (middle chart). JUMP! EXIT
11.25 points (remember to kill the stop!) Those that were a bit slower on
the trigger got taken out at the stop. Still a pretty good trade!!!

Strong Bear Volume continues as Price action tapes a Doji Sandwich
Reversal. Interestingly, the EOD continues to climb, and even briefly
exits the Channel.

PERSPECTIVE

(60-Minute, bottom left chart)
J = Well, as we anticipated, the Bulls have finally
closed that opening gap from last week.

(Daily, bottom right chart)
Price Action is back inside the Channel (light blue
lines), flat against the ceiling. The Retracement
seems to have rebounded through the 62% (Fib) and
could well be on its way to resume the Bull trend.
Don't be surprised if Price Action punches through
the Channel ceiling and continues to climb a bit
more before pausing to breathe.

REMEMBER: Trade the Tape, not my Prognostics!

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

Tuesday's PMT chart: