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 (07 September 2006)
_____________________

Good morning,

Thursday was interesting!

Expecting a Bullish Friday with lots of traps.

TGIF!!!

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

Wow! Thursday morning opens gap-down just above the reinforced S2/powerful Historical
S/R (dotted line). There it hangs for the next half hour. Looks mighty bearish
(lots of long top wicks).

X = Study this classic look of the Bears putting on the brakes:

* Series of red Bull Dragonflies indicating that
forward Momentum alone is carrying Price Action south.

* Long-tailed white Bull Dragonfly, indicating the
the Bulls are now fighting for traction to reverse.

1 = DVS (middle chart) converts to a 2-bar reversal through the LT Sideways Channel
floor (light blue line). This would be a "P" except that Resistance at the reinforced
S2 is proven.

NOT A REAL TRADE - STUDY PURPOSES ONLY

A = Breakaway gap and second white candle closes above the light blue line. Move
profit-locking stop under the light blue line, for reduced Undefended At risk.

B = Failed test of MA. Per our rules, move profit-locking stop under the MA, "free
trade" plus.

C = Large Ascending Triangle formation (lavender lines) breakout with a giant white
candle and DVS (middle chart). Move profit-locking stop under the reinforced S2.

NOTE: This is a 123 "S". A second chance to enter the
ongoing move. Entry at 0.75 above the S2. Immediately
justified to move the inital stop under the S2.
Primary Objective is closing of the opening gaq.

Uh oh! Price Action stalls and heads back to retest the S2. Our stop is just about
2 points away. Some would jump following the12:05 Doji. Some would feel safe with
reinforced S2 support. This IS discretionary trading folks!

3 = DT Double bottom off reinforced S2. Good place to enter or to add contracts if
you are already holding an open position.

D = Volume snaps to life as the BBs come back from lunch. Giant white Marubozu sumo
opens a hole in the troublesome HighM defenses. With such a large candle, it is a
pretty sure thing that the troops will rally and follow the sumo's lead. Aggressively,
move profit-locking stop under the HighM.

Look at that Volume soar, and then get stronger and soar even higher. They're gonna
close that gap.

E = Large white candle through the Low. Lots of profits unsecured on the table, so aggressive stop placement choice is appropriate. Move profit-locking stop under the
Low.

F = If you used less aggressive approach to the previous stop placement, this second
healthy white candle closing above the Low permits you to move the stop up under the
Low.

3 = Gap is closed. Large red Marubozu reversal in range of the Close. Reversal is
very clear, although not so powerful, on the 10-Minute tape (bottom left chart).
No proven interference until the reinforced S2, so this is one of those times that
the Close is a Primary PL. Entry/Reversal seems appropriate.
(+/-4.0 points from = C or = 3)
Advanced traders are thinking Pivot Scalp exit probable.

G = Very healthy Marubozu assault on the S1 succeeds. Move profit locking stop above
the S1 (aggressive choice cause of the hard S2). The position is now well defended and
profitable.

H = Huge red candle resumes the S2 assault, ripping easily through the HighM. Per our
stop rules, move profit-locking stop above the HighM.

Almost exited when the next candle tapped on the reinforced S2. Proximity of stop and
fear that it was too late to cancel the stop in time on the other hand might well have
rightously keep you in the trade.

J = As soon as the tail of this red candle crossed the S2. Exit. +/-4.0 point

K = If it weren't so close to EOD hiccup Danger time, a good option, as it turns out,
was to continue to hold the position and to tighten the profit-locking stop either
above the failed test of MA, or more aggressively, above the S2. I'd go for aggressive,
especially at EOD hiccup time!

L = Large red Marubozu DVS (middle chart) slams against the light blue line, LT SW
Channel floor. One of the two TELLS of failure of a Marubozu assault (Marubozu
discussion has been added to the draft of the next version of the coursebook, BTW) is
met with the next candle:

"Should the candle following the Marubozu reverse direction/color
(retracing >51% after at least 3 minutes of the candle have expired)
...the advance will fail."

This time, I wouldn't even wait for the next candle to retrace 51%. Exit the second
it turned white:

* EOD hiccup time

* Marubozu slammed exactly to a full stop at the light blue line.
Almost could hear it!

* Take a look at the Daily (bottom right chart). The LT SW Channel
floor (light blue line) coincides with the LT Trend channel floor.
That's mucho Support.

EOD closed face-up against the reinforced S2. Seems like the Bulls will have to
overcome lots of Resistance here to even return to the front lines (Daily, bottom
right chart, dotted red line, which is also the SW Channel ceiling, light blue line).

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/PivotMagic090706.gif