Lots of SCRATCHING on Tuesday. Did, however, manage to let profits run,
riding both bear movess from Pivot Point to Pivot Point for a decent score.
Would sure prefer a smoother ride on Wednesday though!
Enjoy and be well,
DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
"Don't gamble; take all your savings and buy some
good stock and hold it till it goes up, then sell it.
If it don't go up, don't buy it."
E-mini ES U1
Tuesday July 26, 2011
At the opening bell it's the Bears out the gate! No entry signal for us though. Looks like
we're gonna miss the morning move. Arrggghhhh!
1 = Well, thank you. The long tail of a red Bear Dragonfly flicks up to retest the Pivot-Close,
and that's a tradable 123 "S" Signal. We enter aggressively below the fog, moving the stop to
Free Trade as the candle closes.
A = This just barely qualifies as large candle, but between the Late-in-the-Move DVS (pink
arrow) warning of Momentum exhaustion, and the elongated bottom wick, telling us that the brakes
have been applied, it fairly begs readers of the tape to move the profit-locking stop above the
high of the candle.
B = Giant red candle puts our position in violation of Pivot Magic Trading Maximum Profit
Giveback (MPG) rules. Mental stop at Giveback Level. That's six healthy red candles in a row,
so we prepare for a Pivot Scalp exit.
2 = Next candle stretches to the S1 and retracts. We apply our Pivot Scalp exit techniques.
+/- 4.75 points
The large white Bull Dragonfly is a healthy "P" Signal, so we reverse on the next candle (blue
arrow). Initial stop advances under the low of the candle. Noting that the top wick of our
entry candle has already retraced almost 2 points, we use a mental stop.
SCRATCH on the next (red) candle. Yuk!
3 = A 2-bar "P" completed a Double Bottom off the S1. We are pulled in on the next candle (blue
arrow). The candle turns into a red Bear Dragonfly, which is even worse than the previous entry
candle. Initial stop under the low of the candle.
The following candle is healthy and white, so we relax.
Confusion reigns. The MA Support holds, but the tail of this white Bull Dragonfly (green arrow)
suggests the Bulls haven't got enough juice to recover. SCRATCH!
In fact, Price Action continues to scramble back up, into the green fog.
4 = A Double Bottom at the MA is a mighty inviting Signal, but even were there any Volume (which
there is not), the Price Window to the proven Pivot-Close is too small for comfortable entry.
5 = Nice Double top at the Pivot-Close.
C = White Bear Dragonfly kickoff, and we enter as this healthy red candle breaks free of the
D = An immediate S-trap scares us into calling this white inverted Dragonfly a failed test of
the MA. Move the stop tighter, above the MA.
E = Every other candle today is inverted. Move the profit-locking stop above the high of this
red Bull Dragonfly.
F = Just as the stall has us ready to go flat, Volume comes to life (pink arrow) blasting a large
red candle southward. Per our stop rules, gladly (no rule for gladly) move the profit-locking
stop above the high of the candle.
G = Small gap and a red Bear Dragonfly. Feels like a good opportunity to use my convention of
moving the stop into the gap for safety sake.
H = Another exhaustion gap, and another inverted Dragonfly. Once again, we apply my convention
and move the stop into the gap for safety sake. Prepare to jump ship.
* Twin Towers (pink arrow) indicates stall/sag.
* Gap indicates exhaustion.
When the tail of the next candle (again an inverted Dragonfly) spikes the S1 and retracts, we
are prepared, and respond instantly with a Pivot Scalp exit. +/- 4.75 points
Price Action bounces, tests the MA, which holds, and EOD closes at the S1.
(Daily, bottom chart)
Tuesday taped a healthy Bear Dragonfly day candle, but
overall it effected almost no change in Price Level.
The tape appears ominously poised for bad economic news.
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
REMEMBER: Trade the Tape, Not my Prognostics!
Tuesday's PMT Chart: