MARKET MECHANIC BIG PICTURE REPORT, BROUGHT TO YOU BY ODYSSEY TRADING GROUP FOR 02/15/ 2013

Welcome to the Market Mechanic daily blog

TODAYS TALLY: $1,050.00 +   WEEKLY TALLY: $3,300.00    

TODAYS ACTION :The market gaps open higher, the software and system generates 2 profitable buy signals as the market continues its morning drift higher. The rally puts the market into an overbought condition and as we discussed yesterday in the AFTER THE CLOSE section of the blog that:  “The balance of our indicators tell us the market is bullish but the 60 minute DTI is negative and the S&P prices are in the upper half on the 60 minute Keltner Channel Band, this normally results in a at least a correction and prices moving into the lower half of the Keltner Channel Band.”  The Sell off materialized and our software and system generated 5 profitable sell signals as the market sold off and prices moved into the lower half of the Keltner Channel. At 2:40 PM the 10 minute DTI went positive setting the stage for a late afternoon rally and our software generated one profitable buy signal as the market traded higher.

The tallyis 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 :

8:50 AMbuy signal emini S&P price 1518.75. The set up; with both the 10 and 20 minute RSI’s with positive readings, and a above 50 reading on the 40 minute TI agg, the trigger: the TI agg on the 20 minute chart crosses and closes above its 50 line, a buy signal is generated. NOTE:  the 20 minute TIAggressive cannot be above 60 at the time that the signal is generated or the closing price of the 20 minute bar can be mid Keltner for the trade to be taken, if the ADX reading is below 50.  Subsequent high: 1521.75.

9:00 AM buy signal emini S&P price 1520.50. On the 10 minute chart, the set up, with positive readings on the 10 and 20 minute TIndexes and with positive readings on 2 out of 3 of the following, the 20 minute TI agg, the 10 minute RSI with a reading above 50 and or the 10 minute DMI with a positive reading, the trigger; the 30 minute TI agg crosses and closes below its 30 line and then crosses above and closes above its 30 line, a buy signal is generated. Subsequent high: 1521.75.

9:25 AM sell signal emini S&P price 1520.25.  The set up; with a negative reading on the 10 minute DTI; the trigger, the 15 minute TI agg crosses and closes above its its 70 line and then crosses below and closes below its 70 line,  a sell signal is generated. Subsequent low: 1511.25.

10:15 AM sell signal emini S&P price 1520.25.  The set up; with a negative reading on the 10 minute DTI; the trigger, the 15 minute TI agg crosses and closes above its its 70 line and then crosses below and closes below its 70 line,  a sell signal is generated. Subsequent low: 1511.25.

11:10 AM sell signal emini S&P price 1516.75. The set up with negative readings on the 5, 10 and 20 minute DTI’s and a negative reading on the 20 minute TI agg, the trigger; the cross of the 20 minute DMI from positive to negative generates sell signal. Subsequent low: 1511.25.

12:10 PM  sell signal emini S&P price 1517.75. The set up; with  below 50 reading on the TI agg on the 20 minute chart and a negative reading on the 20 minute Chaikin Oscillator and 20 minute DTI, the trigger; with the cross of the DMI on the 5 minute chart, from positive to negative a sell signal is generated. Subsequent low: 1511.25.

1:10 PM sell signal emini S&P price 1517.00. The set up; with  below 50 reading on the TI agg on the 20 minute chart and a negative reading on the 20 minute Chaikin Oscillator and 20 minute DTI, the trigger; with the cross of the DMI on the 5 minute chart, from positive to negative a sell signal is generated. Subsequent low: 1511.25.

1:20 PM sell signal emini S&P price 1517.25   The set up with negative readings on the 5 and 20 minute DTI’s and a negative reading on the 20 minute TI agg, the trigger; the cross of the 10 minute DTI from positive to negative generates sell signal. Subsequent low: 1511.25.

2:45 PM buy signal emini S&P price 1516.50. 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: 1518.50.

AFTER THE CLOSE : Of the DTI readings only the5 and 10 minute finished the week positive all others finished the week negative. The TIndexes only the 5 and 10 minute finished the week with positive readings all others finished the week negative. Certainly a mixed bag as far as our proprietary indicators are concerned but with the longer term DTI’s negative it looks like we are in correction mode for the time being. But with an overall market state as bullish any correction could result in a buying opportunity.

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.