DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
The Bears cordially welcomed us back with the violent dive deep into the
heart of the LT Trend Channel that we have been predicting.
We needed to recalculation the Pivot Points to adjust for the huge opening
gap. PMTers scored a handful of points on two trades. The primary move,
however, was during lunchtime, and well beyond the S3 Extreme PL. Our
risk-conservative Money Management rules did not permit trading for the
entire afternoon. Sigh!
Was fun to watch though!!!
Enjoy and be well,
E-mini ES H1
Tuesday February 22, 2011
From our pre-open examination of the overnight tape, it is certain that Tuesday morning will open with a
severe gap down. We are prepared, and immediately recalculate the gap-open adjusted PLs (dashed lines).
1 = Calling this white Bull Dragonfly an Anomaly (Overnight, bottom left chart) is a bit of a stretch.
We are therefore relieved to enter aggressively as the tape presents 123 "S" (blue arrow) above the S3.
In fact, the double signal combination invites us to enter with multiple contracts.
A = Small gap and a large white candle taps on the S2. Instinct suggests that we slip the profit-locking
stop into the gap, locking in a small profit.
B = Large white candle through the S2. Per our stop rules, move the profit-locking stop under the S2.
An S-trap tests the S2 Resistance-turned-Support and almost hits our stop.
C = Large, white, inverted (Bear) Dragonfly. The elongated top wick of this exhaustion candle has already
retraced almost 2 points. A stop under the S2 will make it >2points, an Exit Now! The R:R is not worth
the risk. Exit briskly. +/- 6.25 points
2 = Entry on this reversal must be below the proven S2. The move dies at the S2 Support.
3 = The same entry requirements apply to this Double Top.
D = We are pulled in on a large red candle below the S2. Noting that the S2 breakthrough is a 2-candle
123, we enter with multiple contracts. Initial stop advances above the S2.
E = Large red candle. Per PMT stop rules, move the profit-locking stop above the high of the candle, which
is PMT Maximum Profit Giveback (MPG) Level; make it a mental stop.
F = Although the ABS is arguably large today, since we are in MPG violation, and rapidly approaching the
proven Primary Objective, S3, take the opportunity to move the profit-locking stop (mental) above the high
of the candle.
Unfortunately, since it was only an S-trap in a large ABS day, the next (white) candle retraces >62% of
= F and we call it an Exit Now! +/- 2.50 points
4 = A 123 Continuation through the S3.
* It is now lunchtime.
* The potential move is beyond the (adjusted!) S3 Extreme.
* Twin Towers DVS (pink arrow) indicates a stall is coming
on the next candle.
X = Several mid-lunchtime TELLS (blue arrows) drove Price Action (untradably) south throughout lunchtime.
5 = A "P" Reversal off the MA is a PMT "S" Signal. Mid-lunchtime, far beyond the S3 Extreme, we need more
than the preceding down trend to meet our risk-conservative Money Management rules. We close down early
for the day; only watching to see how deep the Bears will dip.
6 = A Double Top "P" off the MA is even more enticing, but the Volume is nil (pink arrow) and uninviting.
The day drifts sideways to EOD close.
(Daily, bottom right chart)
Finally! The Daily tape shows a huge red day candle stabbing deeply into
the LT Trend Channel (green channel lines). We have been expecting this
Retracement for ages! Tomorrow will most likely be a breather day, but
there does remain a vague chance that the Bears might try to roll with
the Momentum for another day before resting.
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
REMEMBER: Trade the Tape, Not my Prognostics!
Tuesday's PMT Chart: