Number of messages in the thread: 1
1. Date: 2008-11-25 15:47:12
Subject: Pivot Points - Repeating Intraday Pattern - PIC
From: Asher <
a...@n...net.il>
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BS"D
PIVOT MAGIC TRADING JOURNAL - EXCERPT
Good morning,
In yesterday's Pivot Magic Trading Journal, PERSPECTIVE Section, we
commented:
" . . . A test of the dotted plum line S/R, Support-turned-Resistance,
looks to be in the works for Monday."
Called that one!
We also mentioned that the BBs are carving out a daily profit from the
confused and drifting market, by
employing a recurring intraday pattern of sideways trading days,
ending with a giant Price Action blast.
"Make the most of it!", we said. Did it again Monday so I hope you
made the most of it!!!
The market has plunged over a very significant precipice.
Red flag warning remains in effect.
******************************
RED FLAG WARNING
NOTE A: The ABS has been bloated for several weeks. Should bloated
ABS conditions continue, high-wind
warnings, and precautions apply. To avoid getting stopped out at
every Price adjustment, expand the
Pivot Magic Trading Maximum Profit Giveback (MPG) and stop placement
spacings.
To reflect the ABS, and to avoid sudden-death Price Action swings:
* MPG limit needs to at least as large as, or larger than, the average
candle.
* Stop placement (still applying our PMT stop rules) spacings backs
off by to approximately 1/2 ABS.
NOTE B: The expanded spacings obviously make for greater risk
exposure. Of course, the profit-per-minute
potential increases as well.
* This represents an acceptable threat to well-funded Advanced
traders.
* Intermediate traders might wish to trade fewer contracts than
usual. Put less of your funds At Risk.
* Beginning PMTers might be wise to sit out the fireworks.
While the market is excited (ABS is large) and skittish (Price Action
is basically sideways, a minefield full of traps),
every small hiccup "scalp" travels a dozen points or more, in
minutes. Observe how careful application of the PMT
rules, nerves of steel, close attention to the tape (and our primary
indicator, Volume), together enable the
(well-funded and) experienced PMT trader to avoid traps, and to even
profit from the occasional "accidental" blips.
******************************
That said, let us proceed.
E-mini
Monday Nov 24, 2008
1 = Short trend down seems to reverse mid-air with a white Bull
Dragonfly (green arrow). A second Doji-type candle, and the reversal
converts to a
Double Doji Sandwich behind the R1.
A = Price Action tapes a 123 "S" Signal (for those who never heard of
a Double-decker Doji Sandwich). We are pulled in on high Volume (pink
arrow),
above the R1. Initial stop advances under the R1.
B = Large white candle (already it is a fine line distinguishing
between "average" and "large" candles). Per our rules, move the
profit-locking stop
under the low of the candle. Alternately, "free trade" plus a tik
feels right.
C = Somewhere in here is a judgment call on MPG violation. Our stop
is already at "free trade" plus, and the Volume is so healthy that we
don't really
want to jump ship. I'd call the middle candle (white Spinning top
Doji) a large candle and move the profit-locking stop under the low.
D = Our reading of the tape is justified, as Price Action tapes a
large white candle. Depending on your discretion, the MPG may or not
remain violated
with a normal PMT stop under the low of the candle. If it is, place a
mental stop at Giveback level.
E = Late-in-the-move DVS (pink arrow, Momentum exhaustion sign)
generates a white, inverted (Bear) Dragonfly spike (again a Momentum
exhaustion sign). Even as we place the profit-locking stop under the
low of the candle, the next candle turns red and takes it out. +/-
14.50 points
Price Action turns sideways and Volume is extremely confused.
[SNIP]
The BBs go back to lunch, Volume dwindles, and Price Action drifts
sideways, back and forth across the MA.
3 = If you stretch it and include the small red Spinning top to
comprise a minimum trend, this is a 2-bar reversal off the R2. Not
very inviting though.
4 = Again, if you include the white Spinning top to make a trend, this
is some sort of mid-air reversal.
J = Series of DVS pre-emptive attempts (blue arrows) form a Bull
TELL. The BBs have a plan for a late-in-the-day Bull run (once again
that pattern of
mostly sideways trading all day, with a large burst in the late
afternoon).
A protracted TTT battle at the R2 ensues.
5 = Now you see why = 4 was a key event. 123 "S" continuation through
the R2. Is this the Bull run?
K = Volume jumps to life (pink arrow), and we are pulled in on a large
white candle. Aggressively call it a failed test of the MA, and
advance the initial
stop under the MA.
L = Large white Bull Dragonfly. Regular stop placement will leave us
in MPG violation. Mental stop at Giveback level.
Price action stalls to catch its breath. The Bears don't seem to have
the will to push the Bulls back.
M = Giant DVS (pink arrow) blasts a giant white candle north. MPG
violation, so place a mental stop at Giveback level.
As we entered EOD Hiccup Danger Time Zone, you may have gotten jittery
and jumped when the next candle shows red. +/- 14.50 points
However, in light of the TELL, more experienced, advanced readers of
the tape recognized the red breather for what it was, yet another
proof that the
Bears are not prepared to mount a serious defense in order to push the
Bulls back. With most of our profits protected, they held on.
N = If you were brave/wise/greedy and held on, this large white candle
permits you to advance the profit-locking stop under the low of the
candle (or a
mental stop at MPG Giveback, whichever is closer in your strategy).
P = Humongous DVS (pink arrow, this is definitely it for the
Momentum!) blasts a giant white candle north, slamming to a stop at
the R3. Mental stop at
Giveback level. Prepare to exit if the Resistance persists.
The instant the Price Action is rebuffed at the R3 Resistance for a
second time (next candle is red and below the R3), recognize the EOD
Hiccup (it's right
on time!) and Exit Now! +/- 23.50 points
It is worthy of note that the Resistance-turned-Support at the dotted
plum line withstood a violent 3:50 test.
PERSPECTIVE
(Daily, bottom chart)
Could it be? Are we back inside one of the LT SW Channels again?
The opening of Monday's 24-hour session with a breakaway gap portends
well for at least a
partial, temporary, market recovery. I anticipate one more good Bull
day before a breather
or retest.
REMEMBER: Trade the tape, not my prognosis!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.tradingthingys.com/PMTJ/Commodity%20Day%2
0Trading.html
Monday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic112408.
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