BS"D
Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
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PIVOT MAGIC JOURNAL - EXCERPT
Good morning,
Sorry, I copied the economic re****t calendar from the Net
without thinking, and for some reason they (and thus I)
neglected to mention the FOMC that we all knew was scheduled.
In a backwards way, this provided students of reading the
tape a great op****tunity. Soon as you spotted the Price
Action drifting sideways at the Close/Pivot, with no Volume
whatsoever (middle chart, lavender oval), experience (and
reading our Pivot Magic Trading course books!) immediately
rang the "Classic FOMC Behavior" bell, hopefully at least!
Be well,
=] ;-)>
******************************
BS"D
Pivot Magic Trading
First rule:
"...Any time you don't know what is happening, get out!"
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E-mini
Wednesday January 30, 2008
Following the early morning GDP, trading opens slightly gap down, dips
to S1, and
returns into the "green fog". There it remains for the entire day
leading up to
the Red announcement. Notice the classic sideways drift and depressed
Volume
(middle chart, lavender oval).
A = Fed drops the interest another 0.5% and folks at home get
excited. Volume
soars (middle chart) as does Price Action.
You'd think the market was actually surprised, or that this was good
news?!?
should be interesting to watch the longevity of their delight.
.. . . .[SNIP] . . .
G = Large white candle and again a single candle puts position is in
Maximum Profit
Giveback violation. Mental stop at Giveback level. Notice the DVS
(middle chart)
implying that we are nearing Momentum exhaustion.
Small, inverted (Bear) white Dragonfly stops cold at the R3. That's
two signs of
exhausted Momentum.
With the position once more in Giveback violation, we search around
for an excuse
to move the stop. None apparent. Since Volume on this candle is
still apparently
healthy, the smallness of the candle implies Pivot Scalp exit. Put
together we
are forced to exit. We exit with positive slippage as a higher-high-
turns-red spikes
desperately (middle chart, DVS) north and reverses, = H. +/- 13
points
3 = Red Bear Dragonfly/Doji spike, a weak "P" signal, converts to a
powerful Doji
Sandwich. Our aggressive reversal entry technique is obviously
invited here, BTW.
J = Breakaway gap and a large red candle puts the position in instant
violation of
Maximum Profit Giveback rules. Per our rules, move profit-locking
stop above the
high of the candle for instant and secure profits!
K = Large red candle rips through the R2. Move profit-locking stop
above the R2.
L = R2 retest (that's a 123 AND an op****tunity to add contracts) as
large red
candle continues south.
M = Gap (pre-exhaustion gap it turns out) and Large red candle through
the R1.
Per Pivot Magic Trading stop rules, move profit-locking stop above R1.
N = Giant red candle closes slightly through the Close. Really don't
like
hovering in the "green fog" Ambush Zone! Severe violation of Maximum
Profit
Giveback rules. Mental stop at Giveback level. We are now threatened
by EOD
Hiccup danger as well. Preparing to exit.
P = Lower-low-turns-white, spiking through the Pivot and stalling in
the fog.
Exit Now! as soon as the candle turns white (experienced traders
perhaps exited
as soon as Price Action crosses back above the Pivot). +/- 9.75
points
To our dismay, Hiccup and Price Action continues Bearish for another
dozen pointe.
Sigh! Better safe than sorry though.
PERSPECTIVE
(Daily, bottom chart)
Red Bear Dragonfly day candle. We sure called that one!
So there you have it. Just as we suggested repeatedly; even
though Fed dropped the interest rate dramatically once again,
the excitement was short lived. Ultimately, the Fed's action
had a reverse effect. It was seemingly interpreted as an
alarmist reaction to the flailing economic situation. Closing
Price was even lower than the opening Price, from before the
bolstering announcement! But let's give it a few days to
settle out before we make a final judgment.
By the way, notice that I have added dotted red lines to
indicate the previous Bull run. I never mentioned that we
had completely retraced the entire run back mid-month. We
expected this once Price Action was consistently below the
62% Fib retracement level (dark red line). As you can see,
Price Action has pretty much settled just under the low of
that run.
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/PivotMagic013008.gif
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