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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by on June 16, 2006, 9:39 am
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
Thursday (15 June 2006)
_____________________
Good morning,
As we noted yesterday:
"[Wednesday's] Daily tape shows a small rebound off the
62% Retracement (red line). Not enough to get optimistic
about though."
Well it is now!
We also noted:
"The L-T Weekly tape reminds us that although the market
is far from crumbling, Price Action is still [dangerously]
outside the outer Regression channel (light blue dots)."
Not any more!
Breather/retrace or keep pushing?
With Fridays one never knows.
One thing's for sure:
WATCH OUT FOR TRAPS
******************
NOTE: The candles on Thursday's tape look deceptively small due to
the shortening effect of charting large-range Price Action.
1 = They're off and running from the opening bell. High Volume (middle
chart) Bull
Triple-Doji Sandwich Anomaly (Overnight 10-Minute, bottom far-left
chart) off the R1.
A = Second healthy white candle above the LowM. Move profit-locking
stop under the
LowM for minimal Undefended At Risk.
B = Failed test of MA. Per our rules, move profit-locking stop under
the MA, "free
trade" plus.
C = Failed test of MA. Again, per our PMT rules, move profit-locking
stop under the MA.
D = DVS (middle chart). Large white candle off R2. Move
profit-locking stop under R2.
Vigorous DVS Reversal (middle chart) doesn't generate much Price
Action. First shift
then goes out to lunch.
A long lunchtime tapes the usual sideways drift. Sadly, at 13:30,
when the BBs start
coming back, we get taken out at our stop. +/-3.25 points
Now here's the test of you mettle!
2 = Doji Sandwich off R2. Normally hesitant to enter above R2, and
shaken by the
misfortune of just getting stopped out, but:
* Primary Objective is clearly the 50% L-T Term Trend
Retracement level (blue line).
* It was clearly the Bull's morning and this is the
continuation of an ongoing trend.
* Volume confirms (middle chart).
It's inevitable! How were your reflexes here?
NOTE: The various colored arrows, = 2 (middle chart), point out
some of the many DVS bursts that generated the ensuing, classic,
stair-stepping trend (see red lines on 5-Minute, top chart).
DVS (middle chart) and large white candle pulls us in, nicely
permitting immediate
placement of the profit-locking stop under the R2, for very low
Undefended At Risk.
E = Failed test of MA. PMT stop rules advise to move profit-locking
stop under the MA, "free trade" plus.
F = Giant DVS (stair-stepping continues) generates a large white candle
through the R3.
You might chose to aggressively move profit locking stop under the R3,
or less
aggressively (after the earlier disappointment at R2) under the low of
the candle.
G = Another DVS (stair-stepping continues), which this time generates a
large white
candle. You can move the profit-locking stop under R3 if you didn't
yet.
NOTE: This is a 123 "S" continuation. Although it is not
advisable to enter here (too small a Price Window to the
blue line), it's a great place to add contracts.
H = Another stair-step DVS. Large white candle penetrates the Primary
Objective, the
50% blue line. Move profit-locking stop aggressively under the blue
line.
J = Large white candle through the MidW. Either move profit-locking
stop under the low
of the candle or aggressively under the MidW. The first green arrow is
second healthy
white candle above the MidW. If you took the less aggressive choice
earlier, now move
profit-locking stop under MidW.
Both of the green arrows indicate 123 "S" continuations. Heading into
unclear topography,
it's nice to get confirmation!
Interesting to note how the entry and the stair-stepping
"coincidentally" occur spot-on
at our PLs (and, of course, the 50% S/R).
EOD hiccup Danger Time. DVS (middle chart) produces a large, almost
sumo Marubozu candle.
Not a good combination of signs. Briskly move profit-locking stop
under the low of the
candle.
Next candle/bar is a Doji DVS (middle chart). That's a classic "Exit
Now" signal folks,
especially at EOD Hiccup Time! +/- 16.50 points
Nice!
PERSPECTIVE
(Daily and L-T Weekly charts,
bottom center and right)
X = YOU ARE HERE!
Price Action has rebounded back above the 50% Retracement level
of the current L-T Trend, and is now also back inside the
outside/swing-range (light blue dots) Regression channel.
(10-Minute, bottom near-left chart)
Z = Note that the Double Bottom Formation at EOD Wednesday,
which was too large to be of use for intraday trading, was
indeed quite a powerful signal for longer term traders.
TGIF!!!
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com
Thursday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic061506.gif
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