BS"D
Good morning,
On Monday, Market Makers executed a Surge-Slide, thereby making
trading range in a dead market.
One of our fellow students commented that Monday was, "picture
perfect". I guess so, but the run up was a mother to hang on
to! We got a few bites and paid the bills, but it was a very
tough bucking ride all day long.
FOMC Today!
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 H2
Monday 02 April 2012
1 = DVS (pink arrow) pumps the final massive white candle north, completing a 2-bar off the Pivot.
This 2-bar, in turn, completes an Anomaly (Overnight, bottom left chart) Double Bottom, which
qualifies as a self-confirming pair of Signals, through the Close.
A = Our entry candle develops an elongated top wick. Advance the initial stop under the low of
the candle.
B = Small breakaway gap, and a large white candle rips through the High on its way to the Primary
Objective, R1. Per our PMT stop rules, move the profit-locking stop under the High/Free Trade plus.
C = Average sized white inverted (Bear) Dragonfly tail spikes the R1 and retracts. That's a Pivot
Scalp exit signal. +/- 2.5 points
2 = Even should we argue that the spike-through (= C) is not definitive, our position is now in
PMT Maximum Profit Giveback (MPG) violation and we have no appropriate excuse to move our stop.
So, once red = 2 spikes and retracts, we have 3 concurring readings. Nu?!? Exit!
Volume has dwindled, and the small red candles generated do not inspire.
3 = The MA holds with a "P" Reversal, which qualifies as a PMT "S" Signal. R1 Resistance is
proven however, effectively closing the Price Window. Pass.
4 = A 123 Continuation saws through the R1.
D = Volume leaps (pink arrow), and we are pulled in on a small white candle with a snaggly top wick.
Price Action painfully stalls through a set of small, snaggly top wicked candles.
E = Volume rebounds, driving a healthy white candle; another elongated top wick. The bull Momentum
is never going to overrun R2 like this.
Nervous, I'd utilize a variation of the pre-emptive 3-5 Pivot Scalp Special Stop rule and jump to
Free Trade and a tik (good ole risk-conservative me!).
F = When the tail of this small red Bear Dragonfly spikes and retracts, most of us rightly call it
a Pivot Scalp Exit and pull the plug. +/- 2.25 points
5 = The Bulls continue in force, with a massive, high-Volume, aggressive entry, 123 through the R2.
G = Long top wick and Twin Towers (pink arrow). Not good. Maximum, pre-lunchtime drift will get
nudged up to R3, where we will Pivot Scalp exit.
The green Twin Towers, out of character, recovers immediately bullish, and with a series of tiny
white candles Price Action wafts uninspiring north. We would do well to once again apply the 3-5
Scalp Stop approach. Move the profit-locking stop to Free Trade and a tik or two.
H = A Late-in-the-Move DVS (pink arrow) exhaustion signal pumps a large white candle to stretch
with the last bit of Momentum, tap on the R3, and retract. Pivot Scalp Exit signaled.
+/- 3 points
Lunchtime starts in an instant, Volume dies, and Price Action slides uneventfully along the
underside of R3 till very late in the day.
6 = A Lovely rounded top breaks into a pounding dive and retrenchment at the R2. Too late for
the PMT entry clock, and not really a classic EOD Hiccup setup either.
PERSPECTIVE
(Daily, bottom right chart)
Healthy (can you really ever call a Spinning Top
"healthy"?) white Spinning Top day candle on Monday.
That is just another form of Price Action continuing
to breathe.
The LT tape seems to be in a low angle Trend Channel
(green trend channel lines), painfully waiting in
anguish for Tuesday's FOMC minutes.
REMEMBER: Trade the Tape, Not my Prognostics!
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
Asher
=] ;-)>
Monday's PMT Chart:
