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E-mini Plunges! *LINK* *PIC*


Good morning,

E-mini plunges! After getting stopped out early in the
morning, we scored one very nice trade in the afternoon
continuation of the market plunge.

Not sure if Price Action will re-enter the LT SW Channel
(Daily, bottom chart, lavender channel lines) or if we
have just defined a new Channel.

Enjoy and be well,


"Don't gamble; take all your savings and buy some
good stock and hold it till it goes up, then sell it.
If it don't go up, don't buy it."
Will Rogers


E-mini ES Z1
Wednesday November 09, 2011

Morning session opens with a huge gap-down at the S2. Price Action crosses
below, and returns to test the Support-turned-Resistance.

1 = A 2-bar off the S2. Volume is down. Pass.

A = Volume resumes (DVS, pink arrow), and we a re pulled in on a very large
red candle. At the close of the candle, jump the stop to Free Trade and a
couple of tiks.

Yuk! Got stopped out on the next candle.

NOTE: The ABS is bloated, so to avoid getting
stopped out on every swing, we expand our stop,
exit, and Maximum Profit Giveback (MPG)

Volume is confused and steadily diminishes.

X = Mid-lunch DVS might be a TELL (blue arrow) suggesting BBs want to go even
more bearish after lunch.

2 = Lunchtime Head and Shoulders pattern (orange oval) at the S2. A very strong
formation, coupled with the earlier TELL make this rather inviting statistically.

B = Volume swells slightly (pink arrow) as Price Action breaks below the right
shoulder, pulling most of us in. The breakout is a 2-candle 123 on its own, so
those who enter do so with multiple contracts. At the close of the candle, move
the stop to Free Trade and a couple of tiks.
Price Action stalls. Uh oh!
C = No problem! Large red candle puts our position in (expanded) MPG violation.
Normal stop placement leaves it in violation. Mental stop at Giveback Level.

D = Large red candle again puts our position in (expanded) MPG violation.
Normal stop placement leaves it in violation. Mental stop at Giveback Level.
Prepare for a rebound off S3 Support.

3 = No rebound. DVS (pink arrow) pumps a large red inverted (Bull) Dragonfly
through the S3. Per our stop rules, move the profit-locking stop above the S3.

This is a 2-candle 123 "S" Signal. Those who aren't on board get a second
chance. Those who are, add contracts.

E = Giant red candle (almost a perfect Marubozu) and our position is again in
MPG violation. Mental stop at Giveback Level.

F = Giant Late-in-the-Move DVS (pink arrow) signals exhausted Momentum. As the
tail of the tail of this giant red Bull Dragonfly recoups >2.50 points we have
an Exit Now! +/- 14 points from S2 entry = 2, or +/- 5 points from S3 Second
Chance entry, = 3.

Either way, that makes up for some of the earlier pain!

4 = Price Action tests the recently exited LT SW Channel Ceiling (lavender line)
and Reverses. Really need to stretch it to call this a healthy Dragonfly rather
than a simple Doji, but it could be.

G = Entry on second white Bull Dragonfly would leave at least 5 points At Risk
exposed. A bit much for a potential 6-point move. Should let it go. Those
who do enter SCRATCH! with a loss 2 candles later.

EOD Hiccup (plum lines) tapes a classic "V" check mark off the lavender line,
but it doesn't climb too far before failing. Price Action comes to an EOD
close almost flush atop the lavender line.

(Daily, bottom chart)

Wednesday taped a giant red day candle, slamming to
a halt at the LT SW Channel Ceiling (lavender line).
That's the retest we were expecting unless the Bulls
followed through with the pretty strong Volume
necessary to continue the Bull rebound.

This looks like a TTT attempt to re-enter the Channel.
It will require some strong Bear energy, so a breather
is more likely in order to permit the BBs can get their
bearings straight for any assault.


REMEMBER: Trade the Tape, Not my Prognostics!

=] ;-)>

Wednesday's PMT Chart: