MARKET MECHANIC BIG PICTURE REPORT, BROUGHT TO YOU BY ODYSSEY TRADING GROUP FOR 02/20/ 2013

Welcome to the Market Mechanic daily blog

TODAYS TALLY: $900.00 +        

TODAYS ACTION : The market opened steady and just fell apart, giving up 8 points in the morning trade. At 1:10 PM the Fed released minutes from the latest FOMC meeting indicating that the money printing will be slowed. The hawkish message hit the market hard as the market dropped an additional 14 points. Our software and system generated 7 profitable sell signals and one buy signal that was covered for a 5 tick loss.

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:

8:50 AM sell signal emini S&P price 1526.25.  On the 20 minute chart; the set up,  with a negative reading on the 10 minute DTI, the trigger : 20 minute TI agg crosses and closes above its 70 line and then crosses below and closes below its 70 line, a sell signal is generated. Subsequent low:1518.50.

9:40 AM sell signal emini S&P price 1526.25. The set up, with the 5, 10 and 20 DTI’s with negative readings and  the 5, 10 and 20 Chaikin Oscillators  with negative readings; the trigger; on the 10 minute chart with the cross and close of the 10 minute DMI from positive to negative a sell signal is generated. Subsequent low: 1518.50.

11:50 AM sell signal signal  emini S&P, price 1522.50. The set up: on the 20 minute chart, with the RSI below 50 and the 20 TIagg having a reading below 50, the trigger the 10 minute Chaikin Oscillator goes from negative to positive a buy signal is generated.  Subsequent low: 1518.50.

1:10 PM buy signal emini S&P price 1523.00.  On the 20 minute chart; the set up, with a positive reading on the 10 minute DTI, the set up: the 20 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 action: covered for a 5 tick loss, when a reverse sell signal is generated.

1:30 PM sell signal signal emini S&P, price 1521.75. The set up: on the 20 minute chart, with the RSI below 50 and the 20 TIagg having a reading below 50, the trigger the 10 minute DTI goes from negative to positive a buy signal is generated.  Subsequent low: 1506.50.

1:45 PM sell signal emini S&P price 1518.75. 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: 1506.50.

2:20 PM sell signal emini S&P price 1512.00. On the 10 minute chart, the set up; with the 5, 10 and 20 minute DTI’s, 10 and 20 minute Chaikin oscillator and 5 minute MACD all with negative 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 positive to negative generates sell signal. Note the closing price on the 10 minute bar cannot be below the 10 minute Keltner Channel Band. Subsequent low: 1506.50.

AFTER THE CLOSE : The news from the Fed reversed all our indicators today. All of the DTI’s finished the day negative. Only the 60 minute TIndex finished positive all others finished negative. With negative readings across the board, we will be looking to sell rallies and shorting the market will be the value trade.

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.