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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by on October 19, 2006, 9:36 am
BS"D
Daytrading Course
Pivot Magic Trading
RULES AND CAVEATS
First rule:
"...Any time you don't know what is happening,
get out!"
http://www.TradingThingys.com
MARKET IN REVIEW - LITE
Wednesday (18 October 2006)
_____________________
Decided that the market's somewhat rangy "continued
breathing at the LT Trend Channel top" might be more
appropriately called "gasping for breath". Price
Action may be accumulating here for a while. Don't
mind that one bit, as long as the daily range keeps
offering us a decent Price Window to trade!Be well,
******************************
Following active overnight trading, day session opens gap-up well above
the R1.
Looks like the Bulls landed running, then stopped, reversing just in
"P" Signal range
of the R2.
1 = Double (both wicks and bodies) - DT Triple-top converts to a
Double-Doji/Bear
Dragonfly Sandwich. Take a look on the Overnight as well (bottom left
chart).
I call it Ken's Krown!
Over six point Price Window to close the opening gap (first objective),
plus another
couple to retest the Pivot (second objective).
Breakaway gap, and we're in!
A = Marubozu sumo (full-bodied candle with no wicks) slams against the
R1. No real
rule here, but with >2 points profits At Risk, it seems wise to move
the stop to "free
trade".
2 = Large red Marubozu through the R1. 123, "S" Signal, but it is not
certain that the
troops will in fact rally behind Marubozu sumo assault with anywhere
near enough force
to achieve the Pivot. Wouldn't like to enter here, but it is a lovely
place to add
contracts.
B = DVS (middle chart) generates a large red candle through the High.
Per PMT stop
rules, move profit-locking stop above the High (medium aggressive
choice).
C = Large red candle through the Close. Volume looks a little like our
friend the
Twin-towers (red bars, middle chart). Nothing overly suspicious? Try
this:
C = (10-Minute, bottom center chart) Starting with = B,
the brakes have been applied. From this Time Frame
perspective, we notice that although the candles are
healthy and red, they also are skidding,
i.e. red Bull Dragonflies.
Moving the profit-locking stop above the high of the candle risks
giving back more
than 2 points profit, thus we make the more aggressive choice and scoot
the
profit-locking stop down above the Close.
3 = Back on the 5-Minute tape, the Bulls are similarly struggling for
traction, a
white Bull Dragonfly. BTW, ideally this was a classic Pivot Scalp
exit at the
"Pivot when touched". For less advanced students, quick-draw exit was
as soon as
this candle turned white. Less advanced students probably got taken
out at our stop.
6.75-9.00 points, depending on your draw.
NOTE: Absolutely no Volume support (middle chart) for this
pre-lunchtime Bull Reversal
signal, so reversing is out of the question.
4 = "P" Signal off R1. Even though it is fair to assume a more
substantial retest of
the Pivot is coming, there is equal likelihood of sideways lunchtime
drifting. Not
enough trading going on to count on momentum through the "green fog" at
this juncture.
NOT A REAL PMT TRADE - DISCUSSION PURPOSES ONLY
Assuming we're pulled in by the red 12:05 candle: The pain begins
immediately as Price
Action continues to slide sideways on the underside of the High.
Somewhere in that
mess must be a "second red candle closing below the High" giving us an
opportunity to
move the stop tighter.
D = Anyhow, here are a couple of failed tests of the MA. Each
presented a chance to
tighten the stop a drop. Not yet free trade, but almost no Undefended
At Risk.
E = Lunchtime ends as Volume wakes up (middle chart). Very large
Marubozu slams through
the Close. Not taking any chances in the fog, especially after such a
nerve-jangling
wait. Move profit-locking stop above the Close. Will the troops
rally behind the
daring sumo Marubozu?
Yup! Pivot is breached!
F = Second healthy red candle closes below the Pivot (almost a large
red candle itself).
Start thinking Advanced PMT Scalp exit rules and move the
profit-locking stop above the
Pivot.
G = Momentum is failing. More Volume (middle chart) generated less
Price Action.
Is this move over? Hey, this is also the second red close below the
Mid. That buys
us time. Move profit-locking stop above the Mid.
H = As soon as this candle turned white was time to exit. Even though
the strong Bull
Volume (middle chart) didn't generate much Price Activity, a Pivot
retest is
super-likely, and our stop is in the path. This Bear move has clearly
bled out
(10-Minute, bottom center chart). Exit Now situation.
J = Interesting learning: Here's is a rarity, a bi-polar Twin-towers.
Not infrequently,
the tower's DVS pair may include a black bar/Doji, giving a two-colored
Twin-towers
pattern. A complete DVS Momentum reversal, followed by sudden silence
(or it's not a
Twin-tower) is not too common. The normal reading of a Twin-towers
warning either a
stall/sag or a reversal becomes ipso facto, a stall/sag.
Well, Price action sure did stall/sag this time! And the rest of the
session traded
sideways atop the Close for a Doji 24-hour day (Daily, bottom right
chart).
PERSPECTIVE
(Daily, bottom right chart)
Nothing much to add to yesterdays observations. Price Action is
gasping against the top of the LT Trend Channel (green channel
lines). Looking back on the trend, dipping and stair-stepping
might easily be predicted.
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com
Wednesday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic101806.gif
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