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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by on July 25, 2006, 12:40 pm
BS"D
RULES AND CAVEATS
Pivot Magic Trading Course
First rule:
"...Any time you don't know what is happening, get out!"
http://www.TradingThingys.com
MARKET IN REVIEW - LITE
Monday (24 July 2006)
_____________________
Good morning,
In Friday's PERSPECTIVE, we mused:
"From the close of Friday's candle it is pretty
clear that Price Action isn't very interested in
the old L-T Sideways channel floor..."
Well, yes and no. Price Action was in fact very much interested
in the old floor, just seems the floor was/will now be a drop lower!
Next question:
In the LT SW Channel or out?!?
***************************
1 = Moveout Monday opens with a 5-point gap-up inside the old (?) L-T
Sideways Channel
floor (dashed lavender line). WOW!
It's definitely a 123 "S Anomaly", but there's no such thing. LOL!
2 = Beautiful "S", 123 Continuation through the R1. Second chance to
enter the
ongoing move and we grab it!
A = Giant white candle charges north, though defenses at the MidM, to
all the way to
the High. DVS (middle chart) could mean exhaustion, so we are
thinking aggressive.
Per our rules, move profit-locking stop under the MidM.
Be prepared for a MidM or R1 retest.
Hah! Turns out to only retest the High. Very small Price Action
candle resulting
from so very much Volume (red DVS, middle chart, = A). No worry as
Price Action
123's off the High and continues to climb.
B = Second (very) healthy white candle closes above the High. Rules
advise to move
the profit-locking stop under the High. With about 3 points of profit
on the table
Undefended, one might even call this a large white candle, and more
aggressively move
the profit-locking stop under the low of the white candle.
C = Price Action stalls at R2 Resistance. Momentum appears spent, but
Bears don't
seem very interested. In fact, a rather weak looking Bull pressure
(ascending triangle,
sky blue lines) continues to be exerted on the underside of R2.
Lots of money Undefended on the table again. About time for lunch, and
there's not any
Bull activity. Money management considerations may well have advised
you to take your
profits and run. Not a bad choice at all.
Alternately, experienced Advanced PMT traders, reading a good chance of
ultimate R2
penetration, but being not too anxious to re-enter above the R2, sought
to defend profits
and hold on to the position. They could perhaps have used their
discretion and applied
some variation of the thinking behind the 3-5 Scalp stop rules and
jumped the
profit-locking stop under the low of the white candle, keeping mouse
hand poised, ready
for immediate exit!
D = This is it. Either it will or it won't. Failed test of MA.
Promptly move
profit-locking sto under the MA, securing another couple of points
profit.
Price Action has crossed the R2, but look at the Volume picture (middle
chart).
Twin-towers Volume pattern. This move has not got long to live before
lunchtime drift
takes over completely.
E = It's a large Marubozu sumo candle (full-bodied candle with now
wicks). Another
sign that we've discussed many times of probable pending Momentum
failure.
That's two strikes.
And, ladies and gentlemen, it's a gigantic DVS (middle chart).
Three strikes.
Jump profit-locking stop under the low of the candle. BE WARY
And we're out! As soon as the next two/three candles formed a
reliable Doji Sandwich
"P" behind the R2.
Decisive:
Cancelled stop and jumped.
+/-10.00 points
Less Decisive:
Too slow. No time to cancel stop and surely
do not want to enter Bearish, behind the R2,
during lunchtime! Got taken out at the stop.
+/- 8.50 points
3 = BBs are coming back from drinking lunch. Notice how much healthier
the candles
start to appear on the tape! This is actually a Doji/white Bear
Dragonfly Sandwich
behind the R2. Volume is doing nicely and the move takes off in time.
It does tape
out as a Classic Double-bottom reversal (pair of rounded bottoms, BTW)
on the 10-Minute
tape (bottom center chart).
Only two problems:
* Price Action is moving kinda slow to go anywhere before
EOD hiccup Danger Time; foreshortened Time Window.
* Never too keen about entering north of the R2.
Surely not without lots of strong and consistent Volume
confirmation!
NOT A RISK-ACCEPTABLE TRADE; NOTABLE DISCUSSION ITEMS ONLY
F = Not sure if the first, breakaway candle through the R2 is large
enough to call a
large white candle. But surely this second white close above
R2/failed retest of R2
Support is most encouraging. Per our rules, move profit-locking stop
under R2!
Very controlled Undefended At Risk.
G = Once again, having traversed much of the open field, we have way
too much unsecured
profits on the table. DVS (middle chart). Is Momentum exhausting?
For experienced,
Advance PMTers, viewing the rapidly closing Time Window (instead of the
closing Price
Window, which generally sets the scene), 3-5 Scalp stop rules come
instantly to mind.
Jump the stop up to "free trade", plus some.
H = DVS turns heroic with two more strong Volume Bull bars (middle
chart), but then we
get a DT Double top "P" Reversal off the L-T Sideways Channel
ceiling!!!
EOD hiccup time cements it. Exit Now!!!
Our pretend daredevil lucked out. This time!
Don't try it!!! The odds stink.
PERSPECTIVE
(Daily, bottom right chart)
The Daily tape has shows us an officially re-established (with a
drop bit lower floor) L-T Sideways Channel (lavender channel lines).
With a nose up TTT in process against the lavender ceiling, Tuesday
might be interesting. (By the time I get this out, Tuesday will
already be off and running, so you already know the next chapter.
Sorry.)
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com
Monday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic072406.gif
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