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
Wednesday (19 January 2005)
_____________________

So much for "Don't be surprised if Price Action punches through the Channel
ceiling and continues to climb a bit more before pausing to breathe."

Luckily we remembered to: Trade the Tape, Not my Prognostics! LOL!

NOTE: We are back inside the long-term
Sideways Channel (Daily, bottom right chart).
Remember, Channel ceiling and floor are
promoted to Primary PL, and all Primary PLs,
except the Pivot, are demoted to Secondary
status, etc.

1 = Morning session opens with a Bear Anomaly through the semi-permeable
Channel ceiling (light blue line). (See 2-Day, 5-Minute, bottom left chart
as well.)

Opening range Volume is a bit confused, but between gravity, and the
rubber-band attached to the Pivot, with the semi-permeable at our back this
is a "P" entry (below the Close).

2 = 123 proves the hard Channel ceiling. Once the large red Bear Marubozu
candle (full-bodied candle with no wicks) completes 62%, this is a good "S"
second chance. According to our criterion, Price Window to the Pivot is
still open, JUST. The more risk-conservative amongst us might have elected
to immediately place the stop aggressively above the Close.

A = Failed test of MA. Move profit-locking stop above MA, reducing
Undefended At Risk to just about zero.

B = Large red candle. Per our rules, move profit-locking stop above the
candle high.

Lunch time begins a bit early and Price Action settles into a sideways
channel pattern (bounded by the Pivot and the lavender line).

C = Sudden isolated Bear Volume surge (middle chart). Looks like the BBs
wanted to make sure that pressure stayed Bearish while they sipped their
martinis.

NOTE: Even though this smells of reverse
(Price Action IS at the Primary Objective,
the Pivot), the total absence of Bull
Volume encourages us to hold tight.

Lots of martinis! Although Volume resumed a bit around 2:00, Price Action
meandered sideways till about 3:00 PM.

3 = "P" Doji Sandwich beyond the Pivot. Nice second chance for those who
were baffled by the early morning zebra-striped Volume and chose to wait
for better confirmation - not unwise at all.

D = Volume jumps (middle chart) and the move continues. Large red candle
closes below the Pivot. Could be a Bear trap. Move profit-locking stop
tight against the Pivot.

E = Giant red candle rips through the Mid. The aggressive-application mode
of our stop movement rules suggests to move the profit-locking stop above
the Mid.

F = Large red candle on massive Volume. Move profit-locking stop above the
high of the candle.

At first glance this appears to be a Desperation Volume Spike, followed by
a second large Doji (really Bearish) Desperation Volume Spike, and finally
turning into a Doji Spike Sandwich Reversal. It is now time for the EOD
hiccup Danger Time Zone. The safe move here would be to exit with close to
10 points.

However (discretionary):

* Price Action has just completed a very long
vertical Bear assault and this could be the
much needed breather.

* The Bears are unlikely to have made such
a sustained charge only to quit without at
least one desperate assault on the Channel
floor (light blue line).

* This Signal is mid-air, at MidW, which
now has only Tertiary status.

* Bull Volume is considerably weaker that
the preceding Bear Volume, and getting
weaker yet.

* Profits are well locked in with our
profit-locking stop securely nearby.

G = Sure enough, retest of Ma fails. Move profit-locking stop a bit
tighter, above the MA.

H = Second healthy red candle closes below the MidW. Move profit-locking
stop above the MidW.

Per PMT rules, exit before the completion of the 4:10 candle.
+/- 11 points (from = 1 or 2); +/- 6.75 points (from = 3)

PERSPECTIVE

(Daily, bottom right chart)
Price Action is still locked inside the long-term
Sideways Channel (light blue lines). However, it
is now once again dangerously nose-down against
the 62% (Fib) retracement level. The Channel
floor is semi-permeable, hard to exit, but things
could go either way.

(60-Minute, bottom center chart)
This time frame presents a close-up view of the
ongoing Sideways Channel action (light blue lines).

J = Almost perfect 2-day parabola, as Price Action
swings from Channel floor to ceiling and back again.

Quite some battle going on at the 62% retracement!

REMEMBER: Trade the Tape, not my Prognostics!

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

Wednesday's PMT chart: