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TFC Commodity Trading Forum

Pivot Points Define the Price Action *PIC*



Good morning,

First day back after January 15th, and the Bears wake up for a nice
rangy trading day. Pivot Points ruled, and we scored a couple of
decent trades.

More tomorrow?

Enjoy and be well,


E-mini ES H1
Wednesday January 19, 2011

Morning session opens gap-down with an Anomaly (Overnight, bottom left chart) in range of the Pivot, south
off the LT Trend Ceiling. We wait for entry below the nearby S1.

A = A 2-candle 123 overruns the S1, pulling us in (with a good excuse for selling multiple contracts).

B = Large red inverted (Bull) Dragonfly. Per our stop rules, move the profit-locking stop above the high of
the candle. The long bottom wick has us a bit nervous.

C = Although this candle is only average size, still feeling wary from the last few weeks, dropping the
profit-locking stop to Free Trade seems prudent.

D = Large white candle retraces just barely 2 points, but that's still >62%. No sense risking the execution
of a Cancel-Replace with the stop adjacent to the high. We wait for the stop to be hit at Free Trade.

E = Hello! The Bears resume the charge. DVS (pink arrow) blasts a giant red candle through the Low. Normal
stop placement leaves the position in PMT Maximum Profit Giveback (MPG) jeopardy. Mental stop at Giveback

F = Small red candle puts our position into MPG violation. The tap rebound off the S2 Support already makes
us consider Pivot Scalp exit tactics. With no excuse to move the stop, MPG rules say to exit.
+/- 4.75 points (got a drop of positive slippage, which is always nice)

2 = Weak reversal off the S2. Volume is still low and the S3 has been proven. Sit tight.

3 = A 123 at the S3 would be more interesting if the trading interest were there to support it.

G = Volume perks up (pink arrow), and we are pulled in below the S3. BTW, the breakthrough is also a 123
so we are justified to use multiple contracts.

H = An S-trap stall leads to a failed test of MA. Per PMT stop rules, move the profit-locking stop above
the MA.

J = Large red inverted (Bull) Dragonfly. Per our stop rules, move the profit-locking stop above the high
of the candle.

K = Lone DVS (pink arrow) drives a large red candle. Stop rules say to move the profit-locking stop above
the high of the candle. This, however, leaves the position in MPG violation. Mental stop at Giveback Level.

L = Lower-Low-Turns-White is a PMT Exit Now! Signal. +/- 2.25 points

And our day ends.

EOD Hiccup (plum lines) is right on time, with a classic "V" checkmark pattern. The day closes below the
S3, back inside the LT Trend Channel (Daily, bottom chart, green channel lines)

(Daily, bottom right chart)

Wednesday taped a very large red candle, plunging Price Action back inside the
LT Trend Channel Ceiling (green channel lines).

As we expected, after January 15th Volume/trading interest is a bit more healthy
and the trading range bigger.

If the Bears don't need to stop to breathe first, expect Price Action to stab
deeper into mid-channel Thursday/Friday.


REMEMBER: Trade the Tape, Not my Prognostics!

=] ;-)>

Wednesday's PMT Chart: