BS"D

Exploit Pit Pivot Points
Daytrading Course
Learn to Read the Tape
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DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

From early morning on, we found ourselves hunting trades outside
the LT Trend Channel (Daily, bottom chart, green channel lines).
Due to the perfect stair stepping at each Pivot Point (Level, PL),
mostly, we had a very interesting, low-risk day, AND quick
thinking traders even profited OK.

Following Wednesday's huge red candle, perhaps confusion and
breathing on Thursday? Perhaps Bears may follow through!

Enjoy and be well,

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Pivot Magic Trading
First rule:
"Any time you don't know what is happening, get out!"
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E-mini ES H3
Wednesday 05 June 2013

Morning opens gap-down at the LT Trend Channel Floor (green line). The Floor holds, and Price
Action takes a long series of bounces across it.

1 = A tentative looking, 2-candle break out from the green line.

Sorry, the Primary S/R status of the Floor of the LT Trend Channel only holds inside the Channel.
The Floor and Ceiling are thus selectively directional, Floor allows free entry from below, while
Supporting a hard, tradable, S/R Floor. Similarly, Ceiling is passive to entry from above, while
forming a hard, tradable Resistance to any exit above. For us, Nada!

DVS does plunge Price Action to the S1 Support, which halts its progress cold. First the green
line, and now the S1, like stair steps.

2 = A 2-bar through the S1. Volume (pink arrow) is steady. The Opening Gap and re-entry to the
channel beckon from above.

A Large white Bull Dragonfly, 123 kickoff candle pulls us in. Jump the stop under the Low for
diminished At Risk.

Price Action promptly stalls, and then flicks a token tap on the forsaken green line (blue arrow).
We have our SCRATCH! exit order in well before the full glory of the large Red Bear Dragonfly
candle completes.

3 = The bounce is tight enough to call it a 123 retest of the S1.

B = The plunge continues (sort of), and we are pulled in, ultimately miffed and confused by the
puny closing of the entry candle.

At least the next (red) candle wasn't a threat!

C = DVS (pink arrow) pumps a giant red candle into Maximum Profit Giveback (MPG) violation.
Mental stop at Giveback Level is called for.

D = Skid marks below tell us this red inverted (Bull) Dragonfly candle has exhausted Momentum and
is spinning its wheels for traction, a stall/sag/retrace is coming soon. Twin Towers DVS pattern
(pink arrow) indicates that this stall/sag/retrace is starting on the next candle. We hesitantly
drop our profit-locking stop above the high of the candle.

Next candle is not quite a Black volume Bar of Death Doji, but it surely is a preparation for
reversal, especially along with = D (comments above).

Change to a mental stop (i.e. cancel hard stop, half the Cancel-Replace is now done in preparation).
Prepare to Exit in the likely event that/as soon as the next candle shows white. +/- 1.75 points

Price Action stalls to a test of MA Resistance, pulls back, and tests again, vigorously, but with
limited success. Following hours of daintily stair stepping south, Price Action now takes a long
slide (red arrow), the move of the day, only to finally engage strong Support at the S2.

4 = A rather weak 2-bar at the S2 almost goes unnoticed, until:

E = Very hearty white candle repeats the Reversal Signal, and blasts north. We enter aggressively.
Why?

TIME TO RECONNOITER:

LOGIC
Historically, per our TA evaluation of the Daily chart (bottom chart,
and longer-term historical Daily charts), most excursions outside the
green lines are relatively short lived. The, distance in Price is
similarly restricted.

* Alternative Viewpoint:
This is the crash we're all anticipating.
Naw! Not enough power; the plunge pauses to struggle at each Pivot
Level. [Seems the BBs read the Pivot Magic Trading course books and
Journal.]

INTRADAY TREND
The bright blue line traces the morning's downtrend. Not only has the
massive white candle crossed the S2, but it has also exited the current
channel ceiling (bright blue line), not to mention it crossed above the
MA.

VOLUME
Volume is up. In fact it is as high as the early morning strong (at
least it seemed like a 10:20). But this levels wasn't nearly enough
then (pink arrow = 2), so why use it as a reference now?

* Answer:
Look back at the red bars before = 2.
Now, look at the red bars before = E.

CONCLUSION
Even should we now witness a repeat of = 2, the bounce = E will face
far less resistance. Joined with the pulls of the Trend Channel and an
Opening Gap, the bloated ABS almost guarantees a minimum PMT-acceptable
Profit potential to warrant aggressive entry. Initial stop advances
under the MA, for little or no At Risk, depending on how fast
(experienced) you are at running through the reconnoiter sequence!

F = Small white inverted Dragonfly. "Small" is still 2-points, permitting us to advance the
profit-locking stop under the low of this dire warning candle.

Price Action continues to gently elevate, bending as it approaches a peak in a dome shaped
bounce.

H = Small white Bull Dragonfly taps on the MA and exhibits no power to pull the trend erect.
Move the profit-locking stop under the MA.

G = Surprise! The stall suddenly resolves bullish. Per PMT stop rules, move the profit-locking
stop under the low of the candle. This, BTW, is also MPG Giveback Level, so make that a mental
stop.

Good decision. The next (red) candle retraces >62% and as we hit our minimum target, we exit
briskly. +/- 3.50 points

The rounded bounce plops to the rock-hard S2, and skittles sideways there to EOD.

PERSPECTIVE
(Daily, bottom chart)

Wednesday dove for a very large red day candle.
The candle exited the LT Trend Channel Floor
(green channel lines) early, stumbled and finally
tumbled, plunging seriously. Seriously enough to
establish a new Channel Floor level (blue line)?

Doubt it. Last Bear outburst only lasted 6 days.
Bears may follow through, but more likely will
stop to breathe, eat some berries, and look around.

REMEMBER: Trade the Tape, Not my Prognostics!

BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!

Asher
=] ;-)>

Tuesday's PMT Chart: