We took a few nice bites out of Tuesday's Doji day session.
Price Action once again has settled at the 62% Fibonacci
Retracement (Daily, bottom chart, red line).
The FOMC minutes at 2:00 today may well blow the market
wide open. Don't get caught standing in front of a fast moving
DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
Pivot Magic Trading
"Any time you don't know what
is happening, get out!"
E-mini ES Z2
Tuesday 13 November 2012
1 = Wednesday morning opens gap-down with an Anomaly Double Bottom (or
2-bar with a large white Bull Dragonfly kickoff, Overnight, bottom left chart) off
A = Volume confirms (pink arrow) our entry on a large white breakout candle.
This being a 2-candle 123 as well, consider entering on multiple contracts. At
the close of the candle, move the stop to Free Trade and a tik, for an instant
B = Large white candle. Per PMT stop rules, move the profit-locking stop under
the low of the candle.
C = Giant white candle through the S1. Normal stop placement leaves the
position in Pivot Magic Trading Maximum Profit Giveback (MPG) violation.
Mental stop at Giveback Level.
When the next (red) candle dips below the MA, exit briskly. +/- 3.75 points
2 = Strong 123 continuation off the S1. No Price Window to the (always
considered proven) Pivot. Pass.
3 = Following a series of swings and maybe signals (blue arrow), the tape
finally presents a 123 off the Pivot, exiting the green fog.
D = Powerful Volume (pink arrow) behind a breakaway gap and a huge white
candle through the High and R1 pulls us in. At the close of the candle, move
the stop under the High, locking in nice profit right out the gate.
E = Large white candle completes a 123 through the R1. Add contracts.
Normal stop placement leaves our position in MPG violation.
Mental stop at Giveback Level.
F = Large white candle. This is the second white candle in a row with an
elongated top wick. Volume is dropping off. Readers of the Tape spot failing
Momentum so although they place the profit-locking stop under the low of the
candle, they use a mental stop and prepare to exit if >2 points are recouped
(including the top wick.)
The next (red) candle is painfully close. Since it constitutes a mid-air
2-bar Reversal, a PMT Exit Now! Signal, we bail out. +/- 3.75 points
NOTE: In fact, the 2-bar (= F and the red candle
following) are in range of the R2 (1386.50).
Since the next 4 candles are each feeble, we assume
the R1 will hold. Advanced PMTers would let this
pass; therefore, I didn't bother writing up all
the steps leading to an obvious SCRATCH!
4 = A series of lower highs form a Descending Triangle (lavender lines) at
the R1. This final 123 breakout and retest would be a tradable signal.
In spite of the low lunchtime Volume, the pull of the Pivot/Close would be
incentive enough, were there an open Price Window to the proven Close.
There isn't. We pass.
Lunchtime sideways drift bounces in the R1-Close Channel till late afternoon.
5 = Doji Sandwich through the R1. Similar reading (and excuse) as = 4, above.
6 = Just as our PMT entry clock runs out, Volume bulges a bit, and we are
pulled in aggressively on a 2-candle 123 through the Pivot as Price Action
exits the green fog Ambush Zone. Advance the initial stop above the Mid for
reduced At Risk.
G = Late-in-the-Move DVS (pink arrow) pumps an exhaustion gap and a giant
red candle spiking the S1 and retracting. That signals a PMT Scalp exit.
+/- 3.75 points
EOD Hiccup (plum lines) sets up and traces the classic "V" check mark pattern
through the S1. It even dips slightly below the Fibonacci 62% Retracement
Level, for pretty much a Doji day in the e-Mini.
(Daily, bottom right chart)
Tuesday follows suit with yet another breather day
candle at the Fibonacci 62% Retracement line (red
line). It is worth commenting that this time the
candle is red, so it is a fair bet that anything
short of a great FOMC solution in today's minutes
release (very very doubtful) may well precipitate
a full-fledged Bear reversal.
Of course, for some reason the initial hysteria is
likely to be contra-logical, so stay alert.
Glad we are daytraders!
REMEMBER: Trade the Tape, Not my Prognostics!
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
Tuesday's PMT Chart: