THE MARKET MECHANIC for 05/03/2012

Welcome to the Market Mechanic daily blog
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 7 distinct, high probability set ups that are used to day trade the e mini 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 7 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 7 set ups are designed to profitably and consistently exploit these market scenarios.
Markets are opportunity generating machines; my 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.

TODAYS' ACTION: market opens steady until the release of the ISM number at 9:00 AM, the negative report sends the market lower and our system generates a couple of sell signal to take advantage of the sell off. Three Fed governors give speeches in Santa Barbara, starting at 10:00 AM, with the third and final speech given at 1:00 PM. I don't know the full extent of their remarks but obviously their remarks were less than friendly and our system continues to generate sell signals through out the day.

TODAYS' SIGNALS
9:10 AM sell signal emini S&P price 1393.75. 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 1384.50.

9:15 AM  sell signal emini S&P price 1393.25. 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 30 minute TI agg have negative readings and the 15 minute TI agg is below its 50 line; the trigger: the 15 minute DMI crosses from positive to negative, a sell signal is generated. Subsequent  Low 1384.50.

10:45 AM sell signal emini S&P price 1395.25. The set up, with the 5, 10 and 20 TIndexs all with negative readings and 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. Subsequent low 1384.50.

10:50 AM sell signal emini S&P price 1392.00. 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 1384.50.

12:10 PM sell signal emini S&P price 1391.00. The set up; on the 10 minute chart the DTI and the TI agg both have negative readings, the triggers, when the 5 minute MACD and the 5 minute RSI and the 5 minute Chaikin Oscillator turn negative, a sell signal is issued. Subsequent low 1384.50.

12:35 PM sell signal emini S&P price  1390.00. On the 5 minute chart; the set up, with the 5,10 and 20 minute DTI’s all reading negative and a negative 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.  Subsequent  low 1384.50

1:10 PM sell signal emini S&P price 1386.00. On the 10 minute chart, the set up; with the 5, 10 and 20 minute  DTI’s and 5 minute MACD all with negative readings, in conjunction with a plus 25 reading of the ADX on the 10 minute chart, the trigger, the first cross of the 10 minute fast stochastic from positive to negative generates  a sell signal. Subsequent low 1384.50.

1:25 PM sell signal emini S&P price  1386.75. On the 5 minute chart; the set up, with the 5,10 and 20 minute DTI’s all reading negative and a negative 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.  Subsequent  low 1384.50.

2:30 PM buy signal emini S&P price  1388.25. The set up; on the 20 minute chart with the cross of the TI agg above and close below its 30 line, the trigger: the cross of the TI agg back above its 30 line and a positive reading on the 10 minute DTI, indicating the market coming out of an overbought area, a sell signal is generated. Subsequent high  1389.50

AFTER THE BELL: The TIndex on the 5 through the 60 minute charts all finished in negative territory./ The DTI"s on the 5, 10 and 20 minute chart all finished in positive territory. So we end the day with conflicting readings, I am confident tomorrows unemployment number will sort things out.
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TODAYS' CHART