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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by on November 15, 2006, 9:47 am
BS"D
Daytrading Course
Learn to Read the Tape
http://www.TradingThingys.com
Pivot Magic Trading
RULES AND CAVEATS
First rule:
"...Any time you don't know what is happening, get out!"
MARKET IN REVIEW - LITE
Tuesday (14 November 2006)
_____________________
Welcome back!
Usually the first day back from a holiday break is
large range. This time it (Monday)was a dud, but the
second day (Tuesday) was lovely. A bit hard to
trade, but lovely.
Be well,
*****************
1 = Morning session opens gap-up with a 123 continuation at the
R1/Historical S/R
(pink dashed line).
NOTE: Although the minimum definition criterion has been filled for LT
Sideways
Channel, twice, it has immediately been tested and failed on the next
candle, twice.
Thus, the boundaries have been relegated to "Historical" S/R status.
(See Daily, bottom right chart, pink and blue dashed lines)
The reason I even mentioned this meaningless (to PMTers; we don't take
"S" Anomalies)
"S" Anomaly signal was to draw your attention to the power behind the
plunge. First
look at the Overnight tape (bottom left-top chart). The Resistance at
the top was
massive, as was the breakout south. For 45 minutes or so before the
day session open,
the Bears ruled.
On the 10-minute (bottom center chart) the opening (123 completion)
candle is a
massive red Bear Dragonfly.
Volume (middle chart) is high and not erratic, virtually all Bear.
This has all the markings of a powerful assault on the Pivot.
2 = Second Chance to enter the ongoing move! "S" 123 through the
Close/Pivot. Entry,
below the Pivot, obviously. Breakout is a large red candle through both
the Close and
the Pivot. Per our stop rules, this permits us to advance Initial stop
to above the
Pivot, for extremely low Undefended At Risk.
A = Gentle tap on S1/white Bull Dragonfly. Fearing a Pivot retest
with more than 2
points unsecured:
* The most risk-conservative of us (blush) exited immediately.
+/-2.25 points
* Following such strong Bear Price Activity, a gentle tap on
the S1 sure seems anti-clamactic. Advanced traders spotting the
dramatic falling-off of Volume were well justified to take a
"wait and see" attitude here. Move profit-locking stop to 1386
area, securing "free trade" and a bit (2-Point Maximum Profit
Giveback rule).
B = When the Bears could only acheive a second higher-low, it became
clear that the
trend is nominally Bullish. Those who took on the additional risk, now
go flat too.
+/-2.25 points, plus an ulcer
Volume dies. Looks like an FOMC day (remember that on Thursday!).
Price Action drifts
sideways with several more higher highs (lavender line). Not much
pressure, but what
there is, is Bullish.
3 = Note on the 10-minute tape that this morning-to-midday drift has
formed a large
"W" double-bottom formation. The second low is higher than the first.
Again we notice
Bull pressure.
Got quite a ways to go to cross the Pivot and "green fog" ambush zone
though.
4 = Couple of Volumeless (middle chart) 123's, one at the Pivot, and
one at the Close.
Nothing for us to trade.
C = In light of the miniscule Volume and long lunch break, these
pre-emptive Bull DVSs
(middle chart, left circle) are a TELL. Just like on a long-lunch
TGIF day, the
over-eager have given away the late afternoon plan to assault the
R1/pink dashes:
* First a boost up
* Then a bit of drift
* Last, desperate, DVS-based stretch
* Return to sideways drift mode
5 = Now there's something. A second, self-confirming signal off the
Close. This
time it's actually a "P" Signal (because the preceding 3 red candles
define a trend
it is a 2-bar instead of a 123). This time Volume (middle chart) is
very supportive.
On the 10-Minute (bottom center) this is a powerful 123 with a killer
Bull Dragonfly
kickoff candle to boot.
D = Large, white, Marubozu wannabe, breakout candle. Initial stop can
thus be slipped
up under the low of the candle for greatly reduced initial Undefended
At Risk.
E = Giant white candle (DVS, middle chart) through the pink dashes/R1
and HighW.
Following a DVS (Momentum exhausting), tend to expect a R1 retest.
PMT stop rules
suggest to move profit-locking stop under the R1 (medium aggressive).
F = Large white candle. Twin-towers DVS pair. That means stall/sag or
retrace is next.
Move profit-locking stop to 1394.25. That reduces the Undefended At
Risk to
(approximately) a 2 point profit giveback.
Brief stall/sag drift.
G = Large white candle though R2 ahd HighM. Last, desperate, DVS-based
stretch. It's
a whopper on the 10-Minute (bottom center chart)! Soon as the next
candle turns red.
This meets our "Exit Now!" criterion. Do so!!! +/-7.75 points
The thin-line trend crashes and Price Action returns to sideways drift
mode.
C = Note the exact parallel of the late afternoon execution of the BBs
plan (right
circle, see middle chart too) vs. the TELL (left circle, see middle
chart too).
Amazing! They must have read my draft for the new version of the
coursebook! Gonna
have a small section on TELLs. Have to use this as an example of a
mid-week (non-TGIF)
TELL!
PERSPECTIVE
(10-Minute, bottom center chart)
Notice the repeating influence of the
Historical S/R from Monday (pink dashes).
(60-Minute, bottom left-lower chart)
Even more striking, notice the extreme
influence that this Historical S/R level
(pink dashes) has had on Price Action for
the last couple of weeks!
(Daily, bottom right chart)
Price Action has driven north to new highs
and is holding mid-LT Trend Channel (green
channel lines). Non of this matters much because:
Thursday is FOMC minutes release day.
Don't get caught standing in front of a moving train!
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com
Tuesday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic111406.gif
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