BS"D

Good morning,

Wednesday's tape presented a nice, large-range, eminently tradable day.
Except for one SCRATCH, we took some nice bites, both out of the run
down, and from the run back to the Doji-day close.

Most markets close early on Friday for the long Memorial Day break.
Trading therefore will be very sketchy on Friday, and we will sit it
out. On Tuesday we will collect fresh data to trade on Wednesday.

See you in class on Thursday.

Enjoy and be well,

DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

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

E-mini ES H2
Wednesday 23 May 2012

Our trading session opens gap-down behind the S1 and continues down to travel through.

1 = A 2-bar "P" Signal at the S1.

A = We are pulled in on a large white inverted (Bear) Dragonfly. Advance the initial
stop under the S1. The elongated top wick is very worrisome.

2 = DVS (pink arrow) drives a large red Bear Dragonfly. SCRATCH! Nuts!

A = 123 breakout (blue arrow). Re-enter aggressively with multiple contracts.

B = A giant red candle puts our position in Maximum Profit Giveback (MPG) violation.
Mental stop at Giveback Level.

NOTE: The ABS is very bloated today. To avoid getting
constantly stopped out at every Price swing, expand the
stop, exit, and MPG placements.

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

D = Massive DVS (pink arrow) drives a white Doji to retrace >2 points. Our expanded
placements due to the ABS let us hold on to the position. Even though it isn't black,
this should be considered a Black Volume Bar of Death, so move the stop down above the
high of the candle.

If you jumped out, +/- 3 points

E = Bears recover from the brief stall with a large red candle. Again, our position
is in MPG violation. Mental stop at Giveback Level.

F = DVS (pink arrow) exhausts Momentum driving a giant red candle to tap on the S2
and retract. Pivot Scalp Exit Now! Signal. +/- 6.75 points

Volume drops off somewhat, and Price Action struggles vainly with the rock hard S2
Support.

3 = Low lunchtime Volume discourages entry on this lovely Double Bottom formation
(orange oval).

The battle atop the S2 continues. Price Action bounces north without a signal, and
returns to retest the S2.

4 = Finally, a massive 2-bar Reversal off the S2.

G = DVS (pink arrow) drives a large white candle, pulling us in. At the close of the
candle, move the stop to Free Trade and a tik or two.

H = Large white candle taps on the S1 and retracts. That's a Pivot Scalp Exit Now!
Signal. Positive slippage. +/-3.25 points

5 = A 123 completes with a large white Bull Dragonfly and kicks off with another
(blue arrow). We enter aggressively with the stop advancing under the Low for
reduced At Risk.

J = Price Action stalls with a red Bear Dragonfly stall and a large white inverted (Bear)
Dragonfly. Per our stop rules, move the profit-locking stop under the low of the white
candle/Free Trade plus. The pair of elongated top wicks has us preparing to be stopped
out.

K = DVS (pink arrow) blasts a giant white candle north. Our position is in MPG violation.
Mental stop at Giveback Level.
L = Large white candle spikes the Close, taps on the Pivot, and retracts. That is an
Exit Now! Pivot Scalp exit. Positive slippage on the next white candle.
+/- 6.25 points

With the opening gap closed, Price Action stalls, closing EOD back at yesterday's Close.

PERSPECTIVE
(Daily, bottom chart)

After stretching most of the way back to the Historical S/R
(light blue line), Wednesday taped another giant Doji breather
day candle.

Still not certain that the Bulls will have what it takes to
continue the recovery effort. With a long holiday coming,
any move is unlikely to be a reliable market indicator.

REMEMBER: Trade the Tape, Not my Prognostics!

BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!

Asher
=] ;-)>

Wednesday's PMT Chart: