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Posted by on October 24, 2006, 10:40 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
Monday (23 October 2006)
_____________________
In Friday's PERSPECTIVE we said:
"...the entire week tapes as an Ascending Triangle...
This confirms that the pressure going into Monday is
Bullish.
(Daily tape)
Daily Price Action has been breating and stairstepping
as we anticipated. Question for Monday is whether a
Bear trap/Retracement will precede the next assult on
the LT Trend Channel top (green channel lines).
"
"...we're due for a breakout any time now. Don't
overlook a feint south first though. Be prepared."
I like it so much better when I'm right! LOL!
*****************
Moveout/chickenout Monday it was. Even after the Bulls chickened out
following the brief
but violent overnight LT Trend Channel breakout (Daily, bottom right
chart), the day
session moved north for a nice, tradable range day.
1 = Anomaly off the S1. (Overnight, 5-Min, bottom left top left chart,
Double bottom, but
preceding trend is not visible.) (Overnight, 30-Min, bottom left top
right chart, Doji
Sandwich Reversal with preceding trend visisble.)
Luckily [sic], we didn't have to consider entry off a 30-Min chart
since the Price Window
to the Pivot is untradable per our rules.
2 = 2-candle 123, "S" Signal at the Pivot. Second chance to enter the
ongoing move.
PMT rules suggest to hold back entry till Price Action clears the
"green fog". Volume is
very supportive (middle chart) so advanced traders might have entered
on forward
momentum anywhere above the Close.
A = Breakaway gap and giant white candle penetrating the High and R1
(greatfully) pulls
us in. With three levels of aggressiveness open for advancing our stop
(below the large
candle, under the High, under the R1), I like a 4th choice, "free trade
and a bit". It
is after all discretionary trading!
NOTE: The huge DVS reversal (middle chart) generated only minimal Bear
Price Action.
Then, the Bull Volume resumed and "desperation" turned into "heroic".
Smile, that
means more profits to come!
B = Second healthy white candle closes above the R1, resolving the
dilemna. Per our
rules, move profit-locking stop under the R1.
C = Large white candle crosses the R2. Per our rules, move
profit-locking stop under
the R2.
D = Large white Marubozu (full-bodied, wickless candle)/failed test of
MA plunges
through the R3. Standard Marubozu question here is whether the troops
will rally behind
the sumo charge or yield the vigorously acquired ground.
Per PMT stop rules, move profit-locking stop under the R3 (aggressive
choice).
E = Momentum fade, and Volume drops off (middle chart, light blue
line). Lunchtime
drift is upon us.
F = Those more conservative students who use hard profit-locking stops
at all times
[Remember: Inital stops are always hard!] were taken out here.
+/-5.0 points
Those prefering the soft profit-locking stop method (especially during
lunchtime drift)
are vindicated here by avoiding having the trade choked by a single-tap
flicker.
Assuming that:
G = Failed test of MA. Even mid-lunchtime we follow the rules. Move
profit-locking
stop under the MA.
H = Ghastly mid-air stall. Eventual/imminent retest of R3 is
high-probablility.
When it comes, our stop is in the way . Had plenty of hits at the top
to jump
effectively. +/-7.0 points
Either way, nice clean trade!
PERSPECTIVE
(60-Minute, bottom center chart)
Monday taped the expected breakout from the week-long
Ascending Triangle. From the immediate stagnation of
Price Action thereafter, it is fair to assume a retest
of the Triangle base is coming.
(Daily, bottom right chart)
Price Action is still nose-up against the LT Trend
Channel top (green channel lines). All the Bull
pressure we witnessed building throughout the past
week seems to have spiked pre-emptively, as Price
Action returned to spend the day session inside the
channel. This mad foray may have expended too
much of the built up Bull pressure. If so, a dip
in Price Action will now ensue.
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/PivotMagic102306.gif
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