MARKET MECHANIC BIG PICTURE REPORT, BROUGHT TO YOU BY ODYSSEY TRADING GROUP FOR 12/14/ 2012

Welcome to theMarket Mechanic daily blog

TODAYS TALLY: $1050.00 +         WEEKLY TALLY: $ 4,462.50 +

TODAYS ACTION: Water torture to the downside that is the synopsis of the trading action today. It was basically a sideways move with a downward bias. Volume and momentum were both low, indicating a market with little or no conviction. Six of our eight trades were triggered by overbought or oversold conditions, so we were basically in a downward sloping channel. You sold when the channel was overbought and bought when the channel was oversold.

The tally is determined is by taking the trade at the closing price of the 5 minute bar when the software and system generates a trading signal. We will trade 3 contracts per signal with the profit goal of 4 ticks or 1 point per trade. This profit goal is a minimum.  The system will employ a 4 point disaster stop or a loss can be booked when the software and system generates a trade that would reverse our outstanding position. There will be times when the software and system generates what can best be called overlapping trading signals, in this case there will be only one trade booked.

TODAYS SIGNALS:

9:15 AM buy signal emini S&P price 1411.25.   The set up; on the 15 minute chart when the TI agg crosses and closes beneath the 30 line and then trades above and closes above the 30 line and both the 15 and 30 minute TIndexes are positive and 2 out of 3 of the following have positive readings: the 30 minute TI agg, the 15 minute RSI is above 50 and or the 15 minute DMI is positive, a buy signal is generated. Subsequent high: 1412.50.

10:20 AM sell signal emini S&P price 1410.00. The set up, with the 5, 10 and 20 TIndexes all with negative readings, on the 5 minute chart with the cross and close of the TI agg above its 70 line and then the cross and close of the TI agg below its 70 line, the trigger: the first red bearish 5 minute bar, generates a sell signal. Note: If the ADX is below 30; the reading of the 5 minute TIAggressive cannot be below 40 at the time that the signal is generated.  Subsequent low: 1407.25.

11:15 AM buy signal emini S&P price 1411.00. The set up; on the 15 minute chart when the TI agg crosses and closes beneath the 30 line and then trades above and closes above the 30 line and both the 15 and 30 minute TIndexes are positive and 2 out of 3 of the following have positive readings: the 30 minute TI agg, the 15 minute RSI is above 50 and or the 15 minute DMI is positive, a buy signal is generated. Subsequent high: 1412.00.

12:10 PM sell signal emini S&P price 1410.50. The set up, with the 5, 10 and 20 TIndexes all with negative readings, on the 5 minute chart with the cross and close of the TI agg above its 70 line and then the cross and close of the TI agg below its 70 line, the trigger: the first red bearish 5 minute bar, generates a sell signal. Note: If the ADX is below 30; the reading of the 5 minute TIAggressive cannot be below 40 at the time that the signal is generated.  Subsequent low: 1405.75

1:30 PM sell signal emini S&P price 1410.00. The set up, on the 10 minute chart if 2 out of 3 of the following: the 10 minute TIndex, the 20 minute TIndex and or the 20 minute TI agg have negative readings and the 10 minute TI agg is below its 50 line; the trigger: the 10 minute DMI crosses from positive to negative, a sell signal is generated. Subsequent  low: 1405.75.

1:50 PM sell signal emini S&P price 1409.50. The set up; with both the 10 and 20 minute DTI’s with negative readings, the trigger: the TI agg on the 20 minute chart crosses and closes below its 50 line, a sell signal is generated. Subsequent low: 1405.75.

2:00 PM sell signal emini S&P price    . The set up, with the 5, and 10 DTI’s all with negative readings, the trigger; on the 15 minute chart with the cross and close of the 15 minute DTI from positive to negative a sell signal is generated. Subsequent low: 1405.75.

2:50 PM sell signal emini S&P price 1407.75. The set up, with the 5, 10 and 20 TIndexes all with negative readings, on the 5 minute chart with the cross and close of the TI agg above its 70 line and then the cross and close of the TI agg below its 70 line, the trigger: the first red bearish 5 minute bar, generates a sell signal. Note: If the ADX is below 30; the reading of the 5 minute TIAggressive cannot be below 40 at the time that the signal is generated.  Subsequent low: 1406.25

AFTER THE CLOSE : The TIndexes all closed negative for the week. The DTI’s finished positive on the 5, 10, 15 and 20 minute charts and negative on the 30, 45 and 60 minute charts. With all of the TIndexes negative and the longer term DTI’s with negative readings the market wants to head lower. With the weekly DTI negative and the price of the S&P in the upper portion of the Keltner Channel Band on the weekly chart, this market is overbought and due for a correction. That being said, I have to beat the dead horse; we are in a news event driven market and until this Fiscal Cliff nonsense is resolved it will remain that way. Have a great weekend. Let’s all have a drink for the Cliff.

TODAYS CHART:

ABOUT THE MARKET MECHANIC :

The Market Mechanic has developed 3 proprietary indexes and oscillators: the Trend Index Aggressive (TI agg), the Delta Trend Index (DTI) and the Trend Index (TIndex).  These 3 proprietary indicators combined with the Directional Movement Index (DMI), the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) give us over thirty, high probability set ups that are used to day trade the emini S&P market. These indexes and oscillators are applied on time frames from 5 minutes to 60 minutes (5, 10, 15, 20, 30, 45 and 60) and these set ups are traded on all time frames. The final product of the combination of these proprietary and non proprietary oscillators and indexes is a mechanical system and methodology for identifying entry points into the market that completely sidelines emotion and allows its user to concentrate on the money management part of the trading equation.

The philosophy of the Market Mechanic is not to predict the market but to anticipate likely market scenarios that the market will produce on a daily basis and the best way to exploit these opportunities. These set ups are designed to profitably and consistently exploit these market scenarios.

Markets are opportunity generating machines; our software and methodology strive to take advantage of these opportunities as they arise and provide its users a consistent and reliable profit making trading set ups.