MARKET MECHANIC BIG PICTURE REPORT, BROUGHT TO YOU BY ODYSSEY TRADING GROUP FOR 01/15 2013

Welcome to theMarket Mechanic daily blog

TODAYS TALLY: $ 750.00 +        

TODAYS ACTION: The market gapped open lower, what was notable during this early morning trade is that the Chaikin Oscillator on the 5, 10 and 20 minute charts remained positive, in spite of the lower prices. This told us that the market at some point was likely to reverse. Our software and system generated 2 profitable sell signals before the market rallied.  At 10:40 the 10 minute DTI went positive, signaling the end of the selloff. Our software and system generated 4 profitable buy signals during the subsequent rally.

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:

9:25 AM sell signal emini S&P price 1460.75. The set up; with the 5, 10, 15 and 20 minute DTI’s all reading negative and a negative reading on the 5 minute MACD, the trigger; on the 5 minute chart a yellow neutral bar is followed with are bearish red bar, a sell signal is generated. NOTE: this trade will not be taken if the ADX is below 25 and the reading on the 5 minute TIagg is below 30. Subsequent low: 1459.75.

10:10 AM sell signal emini S&P price 1462.00. On the 5 minute chart with the cross of the TI agg above and close above its 70 line and then back below and close below its 70 line indicating the market coming out of an overbought condition in a bear market and with the 5, 10 and 20 minute TIndexes and the 10 minute DTI all with negative readings a sell signal is generated. Subsequent low: 1461.00.                                                                     

10:50 AM buy signal emini S&P price 1463.75. The set up; with both the 10 and 20 minute RSI’s with positive readings, the trigger: the TI agg on the 20 minute chart crosses and closes above its 50 line, a buy signal is generated. Subsequent high: 1468.25.

11:30 AM buy signal emini S&P price 1463.50. The set up, on the 15 minute chart; if 2 out of 3 of the following: the 15 minute TIndex, the 30 minute TIndex, and or the 15 minute TI agg have positive readings and the 15 minute TI agg is above its 50 line; the trigger: the 10 minute DMI crosses from negative to positive, a buy signal is generated. Subsequent High: 1468.25.

1:45 PM buy signal emini S&P price 1464.75. The set up, on the 15 minute chart; if 2 out of 3 of the following: the 15 minute TIndex, the 30 minute TIndex, and or the 15 minute TI agg have positive readings and the 15 minute TI agg is above its 50 line; the trigger: the 10 minute DMI crosses from negative to positive, a buy signal is generated. Subsequent High: 1468.25.

2:20 PM buy signal emini S&P price 1466.75. 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: 1468.25.

AFTER THE CLOSE: The late afternoon rally put all DTI’s into positive territory with the exception of the 5 minute.  The TIndexes all finished positive on all time frames. We have agreement between our indicators, so the value trades should be to the upside. One note of caution, the MACD on the 60 minute chart is reading negative, with the price of the S&P in the upper band of the Keltner Channels. This condition will need to be resolved; either the MACD goes positive or the S&P prices move lower. We will keep an eye on this during the trading day tomorrow .

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.