BS"D

Good morning,

As we projected in yesterday's PMTJournal, the bears were indeed set up
for a run at the Historical S/R (Daily, bottom right chart, top bright
green line). Thursday's range was decent, but the S-traps were too deep
to let us ride either the run up or the run down from start to finish.
We did score a fair number of points (profit) on Thursday though.

TGIF!!!

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 U2
Thursday 02 August 2012

1 = Thursday opens gap-down with the kickoff candle of an Anomaly Double Bottom at the S2/bright green
line (Overnight, bottom left chart).

A = Volume is strong (pink arrow) and we are pulled in (with multiple contracts) on a 123 off the S2.

B = Large white candle puts our position in Pivot Magic Trading Maximum Profit Giveback (MPG) violation.
Mental stop at Giveback Level.

C = Large white Spinning Top taps on the S1 and retracts, signaling a Pivot Scalp Exit. +/- 4 points

2 = A large 123 through the S1.

D = We are pulled in on a white Doji, and of course, Price Action immediately stalls.

E = Large white candle through the Low. Per PMT stop rules, move the profit-locking stop under the Low.

The next (red) candle tapes a mid air reversal, which is a PMT Exit Now! +/- 2 points

3 = Double Top valley (blue oval) hits the S1. The second top is also a 123. When Volume jumps, we
enter aggressively on the large red candle. At the close of the candle, jump the stop to Free Trade.

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

F = Large red Bear Dragonfly almost hits our stop before diving, which puts our position into MPG
violation. Mental stop at Giveback Level.

G = Large red candle. Per our stop rules, move the profit-locking stop above the top of the
candle/Giveback Level.

The next (Doji) candle spikes the S2 and retracts, signaling a Pivot Scalp exit. +/- 4 points

4 = Bear move resumes. A 123 test of the S2 Support-turned-Resistance.

H = We enter on a giant red candle. At the close of the candle, move the stop to Free Trade and a tik.

J = Looks small, but this Spinning Top is a 2-pointer. Move the profit-locking stop above the
high/Giveback Level.

K = Large red candle. Per our stop rules, move the profit-locking stop above the high of the candle.
The elongated bottom wick tells PMT Readers of the Tape that Momentum is failing. The Primary Objective,
S3, is nearby, suggesting the likelihood of a Pivot Scalp exit on the next candle.

Nope! In fact, = K ended the move. We exit briskly as the tape presents a mid-air Reversal.
+/- 2.25 points

5 = A pair of reversals off the S3, but lunchtime Volume (pink arrow) prohibits our entry.

6 = One more weak Reversal signal off the S3 finally kicks of a run up toward the reinforced S2. Again,
the signal is without Volume support, so we pass.

L = Mid-air reversal tells us to shut down early. We get to miss watching Price Action drift to EOD
close atop the S2, outside the old LT SW Channel (Daily, bright green channel lines).

PERSPECTIVE
(Daily, bottom right chart)

Thursday's giant red Spinning Top day candle spiked the old LT SW
Channel Ceiling (bright green line). Thus, the TTT of the Historical
S/R (dashed bright green line) has now officially failed.

The nature and size of the candle suggest a breather on Friday, but,
as we know, Fridays are notoriously often outside the purview of TA
rules!

BEWARE OF TRAPS ON FRIDAY!

REMEMBER: Trade the Tape, Not my Prognostics!

BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!

Asher
=] ;-)>

Thursday's PMT Chart: