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
Wednesday (23 August 2006)
_____________________

Good morning,

At least we got in one sweet trade Wednesday.

The pennant breakout seems to have been false, implying a
Bull attempt is coming soon. Be prepared, and be well,

*****************************

1 = Morning session opens at the Close and promptly tapes a Multi-top reversal. (See
also the 10-Minute, bottom left chart.) The signal issimply too far from the Close
to consider. No entry on a mid-air signal, as Price Action plunges to the Pivot.

2 = This is a second chance "S". Remember the 2-bar 123? Here's a perfect example
(spot on for the 10:00 Reversal Time Zone):

* First candle opens around 1303 and dips to tap on the Pivot (1).

* Price Action the pulls back (2), taping a red Bull Dragonfly.

* And (3) rips through the Pivot.

Entry as Price Action exits the "green fog". Per PMT stop rules, large red
entry/completion candle permits lowering inital stop to above the Pivot for nice, low,
Undefended At Risk.

A = Somewhat stubby Marubozu/2nd healthy red candle below the dotted line (recurring
Historical S/R). Will the troops rally behind this sumo push? Our rules say to
move profit-locking stop above the dotted line. The trade is now profitable.

Yes, the Bears do take advantage of the hole opened by the sumo Marubozu (with a red
Bear Dragonfly) and continue to the S1.

B = large red candle through the S1. Per our rules, move profit-locking stop above
the S1. Notice that this is also sort of a 123 junction and though it isn't enough
to consider "S" entry, it is a nice spot to add more contracts. DVS (middle chart).
Have the brakes been applied?

Yes. How to know? The next candle is a skid-candle, a small red bull Dragonfly.

C = Third and final DVS (middle chart), as forward momentum causes Price Action to
continue the slide. Large red candle. Per our rules, briskly move profit-locking
stop above the high of the candle.

Price Action reverses. Retest of S1 probable during lunchtime drift. Our stop is in
the path. Think and act fast or get slaughtered.
As soon as the next candle turns white and clears 51% of the body of this large red
candle, Cancel the stop (first,we don't want to enter accidentally here, reversing
into aforeshortened Price Window to the S1), and Exit! +/-5.25 points

The BBs apparently headed out to lunch in shifts, as the tape displays a long sideways
(slightly Bullish) drift.

3 = Mid-lunch tap on S1 forms a Doji Spike Sandwich, which never proves. Almost an
hour later (green arrow), another, small, lower high, signal off the S1.

This Signal is too small to consider (even though it takes off with a Marubozu).

On the other hand, ABS today is pretty small. Thought about a possible Pivot Scalp
with the obvious Primary Objective of S2. However, by the time the signal completes
and entry position is hit, the Price Window will not be open wide enough even for a
Scalp.

D = Just for fun and practice, I've marked the natural profit-locking stop movement
series for this brief move. Too bad there was not an acceptable trade here.

Note that the large (13:40) candle is a DVS (middle chart). If we were in a trade, we
would prepare to convert from Pivot to PMT Scalp exit. Not really too meaningful as:

E = Twin Towers DVSs (middle chart). Price Action will now stall/sag or Reverse
following this chunky, red, spinning top candle. Classic "Exit Now". As soon as the
next candle turns white was when to pull the plug.

Of course, we did not take this mini-scalp trade.

Price Action pauses, resting atop the S2 for the longest time!

4 = Healthy, white, Bull Dragonfly behind the S2 kicks off a bounce north. The Primary
Objective is S1 and that is a very tradable Price Window (Pivot Scalp). Green volume
bars (middle chart) confirm the move as real.

Sigh!

Too close to EOD Hiccup Danger time to even think about risk-conservative entry. This
time, by EOD the Primary Objective is easily achieved.

PERSPECTIVE
(Daily, bottom right chart)

Well, we got the expected pennant breakout, Bearish.
Seems however, that it was a false breakout, as the
day candle ultimately turned into a red Bull Dragonfly,
and closed just below the dotted black line. (Sorry,
I lost the pixel war on this one. Note that my dotted
line is actually a bit too low. Don't be confused.)

Implication is, a violent assault on the dotted red
line probably coming Thursday or Friday.

Be prepared.

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/PivotMagic082306.gif