Market was definitely a wild ride this week and with all of the tension coming out of the Ukraine and even with IBM and GOOG falling short and falling down the markets moved up out of a perfect flag. The flag was so perfect in the way it was formed I had to go with the break out of the flag. We broke the flag to the upside leaving 1800 untested below us, and unless we see a definite failure in this latest move  there is actually a great chance we take out the recent highs. I will be watching for a cross back down on the stochastics on the daily time frame to measure that failure. 

The watch list is lighter this week because I have been focused on more shorter term trades. I would like to continue that next week and have made some adjustments to the Tradeometer to time those trades. Lets look deeper into the Tradeometer and the indicator pack.

The Tradeometer is unique indicator I developed for the HPS Methodology. It is used in conjunction with 5 of the core indicators on a short time frame trading the S&P 500, ES mini and/or any related trading vehicle that tracks the SPX. The alerts are generated by tracking the multiple time frames of the $SPX and signaling a visual and audio alert when an overbought or oversold criteria met by the multiple time frames at the same time. Below is what you will see when you open up the pack.

A fast description on what is you get with the tradeometer

Trading Algo X is a 3rd party premium indicator from our partners at Trading Algo X Their proprietary algorithm performs analysis on the underlying 500 stocks of the S&P500 index in real-time, looking for topping and bottoming patterns in each stock. The aggregated results are displayed as real-time over-bought and over-sold oscillators, marking the high-probability reversal areas in the market with vocal alerts.

The Breadtholizer is a gauge to measure Breadth which is  advancers of a session minus the decliners.

The Tickometer is similar to breadth, tick is a simple idea, showing traders the number of stocks on the up-tick minus the stocks on the down tick. Uptick is observed if the last sale of the stock is higher than the previous sale, and vice versa for the downtick. This Lesson will be directed toward the Tradeometer This alert should be considered a indicator and used like one. and with the HPS Methodology a HPS tradeable zone is where 3 or more indicators line up at the same time. I give a constant class each day in the markets so you will see these areas outlined live on the chart.

The Rules to keep you out of trouble:

The Tradeometer is my favorite way to identify tradeable zones in the market especially related to the S&P, But I have back tested it enough to see the obvious results are staggering when the alert is combined with the Trend or channel lines, Volume Profile areas (Which are always identified on the chart) Market support and resistance areas which are also plotted on the chart.

Any of those combinations of indicators are always a HPS Setup. But I would consider the Tradeometer and Channel or Trend lines and the Volume Profile areas to be highest on my list personally.

The Tradeometer is timing tool and works best in an environment that has no news that could push the markets to a extreme bullish or bearish zone. These are where most automated trading systems that use a counter trend strategy start to fail.  The Tradeometer is not an auto pilot buy and sell signal, it is a confirmation or an additional HPS  indicator added to any of the other 5 indicators and should be used in conjunction with them.

This is an entry and short term scalping tool  for both longs and shorts. Exits will not identified and those depend on market environment and longer term outlook and chart..and when i mean longer term I a still very short term but 5 min chart will mostly be used to capture more of a extended move. 

The Chart below shows how each buy alert was followed by a move but each move varied in distance and follow through. Remember this chart because you will see this market reacts to those moving averages 20,50, and 200 time and time again. These moving averages will be key in your exit strategy.

In each case I only took the trade  when the Tradeometer signals on the trend line. Each case will be different and in some cases the market will be pressured up or down past any alerts. If that pressure seems obvious or feels looming then paper trade it and add it to your statistics and save that tums for the next time.

Just noticed on my chart i renamed the Algo x to Algo z. I don't know why LOL But its Algo X and you get it with the IPack and it makes a great signal with the Tradeometer at level 6-7.

I will be updating more about this in the future so stay tuned and watch the show early next week as I will be taking some trades off the Ipack but I will be following my guide lines posted above

This weeks Watch List Video can be viewed here

Have a Happy Easter/Passover

DTRS