BS"D

Pivot Magic Trading Course
http://www.supportandresistance.com/Asher/index.html

MARKET IN REVIEW - LITE
Friday (06 February 2004)
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The extreme overnight reaction to the January Employment Situation
report (overnight chart - bottom left= F) had little net effect on
the morning session open, gap slightly up at the MidM.

1 = With decent Volume (middle chart), Price Action promptly dropped
to close the gap, stretching to tap the Pivot/Mid/Close PL complex.
This spikey, 2-bar/DT Double-bottom Reversal off the Pivot was
accompanied by a clear reversal in Volume (now green bars, of
increasing size!). With our only reservation the High/R1 PLs, we
gladly enter on the far side of the lavender line (repeating historical
S/R level), as the Reversing Price Action slices through them like a
hot knife on butter.

A = Assuming the R2 may well be the end of this move (even though
Momentum is still high), we gladly increase our security following
this giant white candle/second close above MidM. Move profit-locking
stop below MidM, reducing undefended at risk.

B = Price Action continues to soar (on high Volume), easily penetrating
the R1. As we approach the extreme R2/R3 we must move our
profit=locking stop ever more aggressively. Use the excuse of this giant
white candle to move profit-locking stop below the candle's low.

C = Similarly, with so much money on the table and the R3 looming, use
this giant white candle to move profit-locking stop below the lows of the
adjacent pair of DT Double-bottoms.

2 = 2-bar Reversal beyond the R3. That red Marubozu (full-bodied candle
without wicks) looks particularly ominous. Exit 7.5 points

Trading continues to trade sideways at R3 for several hours, constantly
applying upward pressure on the Support-turned-Resistance of the MidW/R3
(bright blue lines - ascending triangles).

Price Action finally breaks north with only slightly increased Volume.
(Did the BBs go home straight after their TGIF lunch time party?)

Of course, without incredible Volume, PMT, risk-conservative traders hold
off from entering north of the R3, Extreme PL.

Price surprisingly climbs to a Double top around 1142, closing EOD above
the R3.

MULTIPLE CONTRACTS

Today is an interesting day for discussing a variation on trading multiple
contracts. For ease of understanding, let's use 3 contracts in the example.
A = Many multiple contract methods fall in the category that I call
"split-contract" multiple contract trading. Split-contract methods
generally first set a target for exiting one contract. That target most
often is a price level whereat the net position pays for itself = "free
trade".

While in single contract trading, we normally consider a "free trade"
position to be held when our profit-locking stop defends our entry price
(actual entry), plus enough to cover the commission associated with the
trade. Multiple contract trading luxuriously expands that definition.
The first-contract exit can extract, in advance as it were, the total of
the loss position (of the current "profit-locked" two remaining contracts),
plus the commissions on all 3 contracts. Thus, the position holding is
converted to a 2 contract "free trade".

For PMT multiple contract traders, however, this approach must not provide
license to ignore the tape!

Momentum here is undiminished. The justification for multiple-contract
entry is still in force. Tape awareness here actually results in the same
Profit-locking stop move decision as for single contract. Move
profit-locking stops below MidM, reducing undefended at risk.
B = Faced with a similar decision, again tape awareness suggests the same
tactic as = A. Move profit-locking stops below the candle's low.

The immediate fall off in Volume would probably change this into an ideal
place to close that first contract. 5+ points
C = Again, same as for single contract.
2 = With the Volume fading and Lunch Time approaching, split-contract
trading suggests Exit 1 contract, 7.5 points, and let 1 remaining contract
ride. Aggressively seek an opportunity to lock in profits.

D = Call it what you want. Failed test of MA? This test is not
particularly frightening or threatening to the remaining 1 contract
position, especially when viewed on the 10-Minute chart (bottom right).
There, it shows up as two weak Dojis forming a DT Double-bottom.

Split-contract multiple contract trading is about letting one ride. This
is a great opportunity to do that with increased security. Move
profit-locking stop below the lows of this pair of Dojis.
Price action continues north, above R3. With the remaining single contract
position well defended, watch with curiosity.

E = Failed test of MA. Move profit-locking stop for the running contract
below the lows.

Use whichever maneuver works best, but per our rules, exit before the end
of the 4:10 candle. 10 points

Asher
=] ;-)>
Pivot Magic Trading Course
http://www.supportandresistance.com/Asher/index.html

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