Using the Higher time frame to confirm the trend.

[Matt Bowen]

Many people have called and said: "How do I know what signal to take when the scanner is calling for a 3-minute SELL on the S&P and a 15 minute BUY on the NASDAQ...I can't tell which trade I should take"

At the beginning of the day I always look at my higher time frame chart and work from there. If your 60-minute direction is down on the S&P, then chances are both the NASDAQ and the S&P are going to be DOWN. The reason behind this is pretty simple: Intramarket Spreads (Buying Mar. S&P futures and Selling Mar. NASDAQ futures) for the most part trade in tandem with one another.

Here is a short signal from this morning...Notice the direction of the 60-minute on both charts before the trade alerts us on the scanner.

[Matt Bowen]

Here you can see the 60-minute S&P

[Matt Bowen]

Here you can see the 60-minute NASDAQ chart.

[Matt Bowen]

Earlier I talked about the correlation between Index products and how the Intramarket Spreads difference between (Buying March S&P futures and Selling March NASDAQ futures).

Well, here you can see the correlation between the Spiders (S&P 500) ETF and the NASDAQ QQQQ's ETF is better than 90%

[guff123]

When I am scanning for trade signals this weekend from Fridays closing and then check all charts I found quite a bit, where the daily signals state to go up with the trade on the daily chart yet the "weekly" is always to either the sell side or when the day chart signals a down the weekly is very bullish. Is this common with anyone of your scans??????

Thanks I fixed all 1030 charts to metastock/computrac format all my dates are good now.

Example: see attachment

[guff123]

Now look at this weekly where it is heading, I found this week alone was just horrible getting the "weekly" chart to agree with its "Daily" signals or visa versa. Steve in his instruction manual states he always checks the "Weekly" when trading the (2 or A) signals.

Thanks

guys

[Matt Bowen]

Guff123 brings up an excellent point (especially in the last few weeks):

Now look at this weekly where it is heading, I found this week alone was just horrible getting the "weekly" chart to agree with its "Daily" signals or visa versa. Steve in his instruction manual states he always checks the "Weekly" when trading the (2 or A) signals.

When you run a scan on Daily charts and the signal comes up as a buy, check the Weekly the chart... is it going in the same or opposite direction?
Simple solution:

Daily UP + Weekly UP = TRADE
Daily UP + Weekly DOWN = NO TRADE

Steve did an excellent chapter on this in "Part-2" of the MTPredictor trading manaul. Please read for more details: http://www.mtpredictor.com/members/documents/MTPredictorTradingCourse-Part2e.pdf

Thanks