MARKET MECHANIC BIG PICTURE REPORT, BROUGHT TO YOU BY ODYSSEY TRADING GROUP FOR 01/10/ 2013

Welcome to the Market Mechanic daily blog

TODAYS TALLY: $ 1200.00+        

TODAYS ACTION: The market gapped open higher but at 8:50 AM the 10 minute Chaikin Oscillator turned negative a yellow flag and at 10:00 AM the DTI turned negative confirming the yellow flag and our software and system generated 2 profitable sell signals as the market sold off and filled the opening gap. This sell off put the market put the market into an oversold condition, the system generated a buy signal as the market moved out of the oversold state. At 11:20 the 10 minute DTI went positive setting the stage for the afternoon rally that eventually took out the gap opening high. Our software and system generated 5 profitable buy signals as the afternoon rally unfolded.

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:

10:00 AM sell signal emini S&P price 1457.75. The set up; on the 10 minute chart the DTI and the TI agg both have negative readings, the trigger; when the 5 minute MACD, 5 minute DTI,  5 minute RSI and the 5 minute Chaikin Oscillator all align negative, a sell signal is issued. Subsequent low: 1455.75.

10:10 AM sell signal emini S&P price 1458.25. 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: 1455.75.

10:45 AM buy signal emini S&P price 1457.75. The set up, with the 5, 10 and 20 TIndexs all with positive readings,  on the 5 minute chart with the cross and close of the TI agg below its 30 line and then  the cross and close of the TI agg above its 30 line, the trigger: the first green bullish 5 minute bar, generates a buy signal. Note: If the ADX is below 30; the reading of the 5 minute TIAggressive cannot be above 60 at the time that the signal is generated.  Subsequent high:1467.50.

11:30 AM buy signal emini S&P price 1459.75. The set up; on the 10 minute chart the DTI and the TI agg both have positive readings, the trigger; when the 5 minute MACD, 5 minute RSI, 5 minute DTI and the 5 minute Chaikin Oscillator all align positive, a buy signal is issued. Subsequent high: 1467.50.

1:20 PM buy signal emini S&P price 1461.25. On the 5 minute chart with the cross of the TI agg below its 30 line and then back up above and close above its 30 line, indicating the market coming out of an oversold condition in a bull market and with positive readings on the 5, 10 and 20 minute TIndexes and a positive reading on the 10 minute DTI a buy signal is generated. Subsequent high: 1467.50.

1:30 PM buy signal emini S&P price  1461.00. On the 5 minute chart with the cross of the TI agg below its 30 line and then back up above and close above its 30 line, indicating the market coming out of an oversold condition in a bull market and with positive readings on the 5, 10 and 20 minute TIndexes and a positive reading on the 10 minute DTI a buy signal is generated. Subsequent high: 1467.50.

1:45 PM buy signal emini S&P price 1463.00. The set up; on the 10 minute chart the DTI and the TI agg both have positive readings, the trigger; when the 5 minute MACD, 5 minute RSI, 5 minute DTI and the 5 minute Chaikin Oscillator all align positive, a buy signal is issued. Subsequent high: 1467.50.

2:20 PM buy signal emini S&P price 1465.00. On the 10 minute chart, the set up; with the 5, 10 and 20 minute DTI’s, 10 minute Chaikin oscillator and 5 minute MACD all with positive readings, in conjunction with a plus 25 reading of the ADX on the 5 minute chart, the trigger, the first cross of the 10 minute fast stochastic from negative to positive generates buy signal. Subsequent high: 1467.50.

AFTER THE CLOSE : It’s unanimous! The DTI’s and TIndexes are all positive on all time frames. It has been a while since we have had across the board agreement. This puts us into buy the dips and the value trades will be to the upside. Keep in mind that it is earnings season and the market has the potential to turn on a dime.

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.