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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 (02 November 2005)
_____________________

Wednesday we chose to let the opening Anomaly trade
slide due to our risk-conservative rules. Turned
out to be 4-5 points missed. Don't be dismayed.
Once in a while being conservative causes us to miss
a trade, but in the long run it saves us from lots
of false starts and losses.
Way better for Money Management!

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

1 = Morning session opens with an Anomaly off S1 (Overnight, bottom
left chart).
Massive Volume supports this move (middle chart). With all that it has
going for
it, only our risk-conservative rules keep us on the sidelines. Price
Window to
the Pivot (always considered proven) is just too small, and entry into
the "green
fog" is too dangerous to chance.

Price Action easily clears the fog and the Pivot. Oh well. Perhaps
we'll get a
second chance to enter an ongoing move.

2 = Sort of a complex "S" 123 continuation test of
Resistance-turned-Support at
the Pivot. First crossing holds strong. The TTT attempt at the Pivot
fails with
a "just barely big enough" white Bull Dragonfly. Failed Bear TTT
usually means
a Bull attempt is coming. Volume surges (Middle chart and we are
pulled in. I
call this Volume pattern a heroic attempt assault. Don't confuse it
with a DVS.

A = Failed test of MA. Per our rules, move profit-locking stop under
the MA,
greatly reducing undefended At Risk.

B = White Bear Dragonfly. Along with what at first glance seems to be
a DVS
(middle chart), this second white candle above the High looks like the
imminent
end of Bull Momentum going into lunchtime. Briskly move profit-locking
stop
under the High.

Strong Bull Volume continues, once again turning the DVS into a heroic
effort.
The climb continues!

C = Failed test of MA. Move profit-locking stop under MA.

Price Action drifts sideways at the R2 for lunchtime. The morning was
strongly
Bullish and we have a profitable position with profits locked in. We
hold.

D = Lunch should be about over and the test of the MA fails. Price
Action is
above the R2. Move profit-locking stop under MA.

E = Large white Marubozu sumo (full-bodied candle with no wicks) slams
north.
Move profit-locking locking stop under the low of the candle.

F = Sudden large DVS (Desperation Volume Spike, middle chart) reverses.
It is
not likely that the Bulls will give up this close to the R3 without
another
attempt.

On the other hand, particularly at this time of the day, this could
well be a
trap and the BBs plan a retest of the R2 first. That makes this a 2.5:1
R:R.
Our stop is about 2.5 points away (potential lost profits) and the R3
is about
1 point away (potential additional profit). Good ole risk-conservative
me
screams, "JUMP SHIP!" 6.75 points

3 = Price Action does indeed make another try for the R3 (without an R2
retest,
alas). Clear DVS reversal (middle chart). The R2 is well-proven, so
the Price
Window once the signal completes is very small. No entry here. Just as
well as
it turns out, as Price Action finally dips to retest the R2!

EOD closes just above the R3.

PERSPECTIVE
(Daily, bottom chart)

Price Action has clearly left the Long-term Sideways
Channel (powder blue lines), but is nose-up against
a pretty strong historical S/R level (green dashed
line). Put that together with the old unfilled gap
(60-Minute chart, = G) pulling the Price Action down,
and expect a bit of wobbling and jockeying before
setting up the troops for a serious Bull offensive.

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/PivotMagic110205.gif

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