 Alright folks, welcome to the webinar. It is Thursday, June 20th and we are looking at the SPX and we are looking at the custom indicators for intraday training of the SPX itself. When I say SPX, you can also do the ES, you can do the options on ES, you can do the SPY, you can do the mini ES futures that has just been released by CBOE. You can do any of this, but if you do the spiders, just be aware it's just like a stock, so it is assignable if you do get into a credit spread situation which is in the money. So other than that, we can use any of these instruments to trade. Alright, so we are coming on the heels of yesterday's FOMC announcement which seemed to indicate that the rate cut is coming and so markets are jubilant today. Yesterday also it went up slightly, so today's reaction is a little surprising to me that such a reaction did not happen yesterday. Well yesterday it was negative and then it climbed positive to about eight points or so, but not a whole lot, but today's action is pretty intense. So what we are looking at here is two indicators. We got the tick SPX which is a measure of the tick itself. So now here, I need to change this to on the study because the dollar tick is a Dow Jones study and what we want is the tick SPX. So on this indicator itself, you have the ability to customize all of this stuff. There are various ticks available in the market. I'm going to choose tick SP, apply. So now we are looking at the tick SP here and I'm just going to save this tick SPX so I don't have to do this every day. So the tick is a measure, so out of the 500 SMP stocks each stock ticks up or down all the time at a micro second level and so at any given time the tick is calculated in a cumulative sense and so if we go back to yesterday's and this is a one day one minute, let's go back to yesterday's trading action here just show you what happened during the trading hours. Obviously this indicator only works when the markets are open. So not in the pre-market, not in the aftermarket. So yesterday you can see so what happens is there's some pent up demand that comes in and then finally and then the tick started moving up a little bit but then it lost ground and then it meant negative up until the 2 pm hour eastern time and that's when the tick started going positive and you can see this is the 2 pm hour and then the FOHC announcement comes and from then on the tick goes, I mean the tick never really crosses zero and that's really surprising to me but obviously it was on an up to a trend all the way into the close and so this is a cumulative calculation so all the ticks that are happening before it and all the ticks that are currently happening and it gets added and so it gives you a true sense of the market internal, the strength of the market internals and so that's really extremely important because when you are day trading in a stock you don't have this kind of information but with the SPX you do and so you want to take advantage of this deep internal market data that's available and so the best way to do that would be to is to make a cumulative total and have that as a running total there. So that's the tick and once we start here you will see the tick starting to develop and then we want to know this is a one minute chart so you want to wait for at least you know five to seven minutes to see what's going on unless there's you know huge momentum coming in and it's very clear that markets are going up then you might want to take a trade in at the open itself but in general there can be some fakeouts at the open and so you want to be careful of that you also want to also just let the market settle in because there is pent up demand you know right now coming in from the pre-markets especially with the futures up about 28 points there's going to be some pretty heavy movements already you can see it went up to 2964 now it's come down to 2961 here and so the RSI the RSI is also a custom indicator as opposed to a regular RSI which tells you when something is overbought or oversold this indicator has also been customized to the point where when it enters you know what I call this as a bullish zone and a bearish zone it actually means that you know you can stay in the trade for this long so we here you know you can start trading as it goes up itself and based on the ticks as well the RSI is only a confirmation indicator it is not a primary indicator so you do want to watch the ticks for the primary indicator but the RSI can provide this custom RSI can provide some pretty serious pretty serious confirmation and so that's what we'll be looking at both of these both of these indicators after the markets open we'll do that and then let's see how it goes so right now there's a little bit of a pullback I'm not surprised I think it's a fake out and the markets want to go up for sure so basically we'll be looking at all trades now if you look at the option chain itself now these are you know very I want to say quick day trades and so we can even go to this you know today's expiry and my sense is that when you do this when you use these kinds of indicators on trade you're getting a pretty reliable signal so if something falters in that then you're better off just closing the trade for a small loss so in general I would say your reward to risk on any trade is going to be about three is to one and so if you need to just lose one trade that's okay because you're going to make a lot more on the winners than you lose on the losers and so if that's really what we are going to be trying to do and therefore even though this expires today nobody's you can still go into this now these option prices you can see now SPX is going to open around 2960 something okay so here we are 2930 this call is deep in the money and that's why you see option price like this whereas on the put side you know 2930 put you know those option prices here but you know so what I'm saying is the the line that separates in the money and out of the money is not correct and that will only adjust after the markets open so here we are looking at and at the money is somewhere here okay somewhere here maybe 2955 to 2960 somewhere there is is really the at the money and so today if we wanted to take a trade on on the SPX on the call side what I would say is you know somewhere near somewhere near the 2965 that would be approximately a 20 delta but these deltas are going to change so let's just watch the market and see and see where it goes all these things is going to adjust now okay 2952 that's where it is so I would say if we want to go we would go to a 30 delta right there okay and let's just watch the ticks coming I'm just keeping the call option ready so that we can get in when we want to all right you can see that this is moving ticks are moving started out at 150 but let's just give it a little time here make sure there's no fake out in fact the fake out should be to the upside given this little pullback here so in that sense we may be okay but let's just give it a minute or two and let these tick ticks also develop as you can see the RSI is coming from a bearish zone based on this price action right here so let's just watch it that was the first minute I'm going to zoom in a little bit here so you can see clearly so the the second tick is opening at 267 so what it means is the number of up ticks minus the number of down ticks is 271 so this number actually doesn't mean anything because the tick level can go to anything it can go to 1000 it can go to 1500 it can go to any any value so there's no real what to say intrinsic information there except if the ticks are going positive then it's a bullish thing if the ticks are going negative it's a it's a it's bearish and the magnitude of the positive and the magnitude of the negative is what we are going to be looking at all right those are some sweet rates that I've you know that I've done so it can be that alone all right looks like a down tick there but you can see pent up demand is still driving the ticks higher so there is pent up demand and that is driving the ticks higher but what we will want to see is just wait for a couple of bars this is exactly why we need to wait for a couple of bars to do this and once we get the confirmation that it's looking to go higher because on a day like this it would definitely be looking to go higher all right now you can see some ticks coming down but once again I really think this is a fake out and the fake out can last anywhere from five minutes to ten minutes so and it's actually going to give us a better entry you know for this for this trade because ultimately I don't think the futures will drive up the I don't think the futures will drive up to 25 and 29 points if the if the big players want to take it down all the way from there they're just taking it down so they can get a better entry point here all right definitely looking a little bearish the first you know the first few minutes after the open but we are just in our fifth bar here so if if there was a fake out then it'll be it'll be coming out sometime soon in the next minute or so we should see the market start just saw that a big huge volume burst that went into you know that went into it yeah there you go so let's see if this has any change but we would need to see yeah the ticks have moved up we would need to see see an uptick on the RSI as well that would be a good confirmation so on a day like this we are coming in with the bias we are coming in with the bias that you know the markets are going to go up because I mean it's up 30 points in the pre-market so that that is an obvious bias that I think anybody will have and therefore why we could have said that oh you can take a put trade on this but that's really you know you wouldn't want to do that I think so okay the ticks drop to 179 all right let's just wait but the thing can happen anytime though I mean the you know the turnaround and the turnaround will be quite vicious here if we see a sudden burst to the upside that's really when you want to get in so I think at this point if we were to go in we can go in on the 2960 also so I'm going to put 2960 here so I've got the today's expiry okay so 2960 call getting that ready all right now you can see something happening RSI is moving higher there we go that burst seems to be coming let's see we would want to wait I'm just getting this ready okay just getting this ready so this is going for between 480 and 5 so all right the ticks are moving up the RSI is moving up okay so if this bar now if we can see some improvement especially in the RSI and in the ticks also after this bar I think it would be yeah you can see the option price is also moving higher and you can see this is like a bottom bottoming out pattern when you have a couple like couple like formation that is a bottoming out pattern but it's fully not developed yet so I'm just waiting it's okay to get a slightly later entry might be a 10 20 cents more for the option but now you can see it's charging high guys okay 480 there we go 490 you can see the option price also moving I'm going in 490 okay they are in at 490 on this now let's just watch this here all right so SP exposition right now it's just about flat RSI you can see and whenever the RSI crosses this you'll get an arrow from the indicator also so that tells you now you can see the ticks are moving higher the RSI is also moving higher now you can see some persistent ticks coming in to the upside got about four or five here now all right looking pretty good ticks are moving up 352 and also the RSI what would really be comforting is if the RSI goes into the bullish zone okay that would be that would be very good but as of now let's just see what this is there we go we're up 125 well these are my custom indicators question you don't use too many indicators just RSI and tick SPX yeah so so these are custom indicators and so you really you know if you if you have the faith in these then you don't need anything else I know I can put you know some moving averages this that and there's no harm with that there obviously but you don't want to get into too many indicators also you don't want to get paralyzed by too many things going on all right a couple of ticks there but you don't want to get shaken out of it because you want to keep the keep the number of ticks to because it's a one-minute chart so you want to keep it at least five to seven bars before you get shaken out once you if you move it to a five-minute chart yeah two bars is good but we are looking at a we are looking at a one-minute chart here so we do need to give that but the ticks are still positive which is you know above the zero it's 126 just it's been coming down a little bit so let's see we and as I said you don't want to let this thing run too much and so if it does not want to go up too much then we'll just get out of the trade that's that's better than trying to do anything with the trade like trying to adjust it and things like that so all right there comes a nice big push there we go you can see the volume also just coming in nicely there we go that's the kind of push I was looking for earlier but I think it's coming in here now you can only on the one-minute chart it's actually quite interesting because you can see the volume bars just jump with the huge move whether it's to the upside or downside you can actually see the big volume jump are happening there so it gives you a gives you a good clue there all right rsi is moving towards the bullish zone which is encouraging moving up now it's gone into the bullish zone so once it goes into the bullish zone what we want to do is see if it can stay there or rather as long as it stays there that's telling you to stay in the trade let's just see okay three hundred bucks not too bad question would you be doing a trade tomorrow with the stock on the new indicator this indicator works only on the indices that's it it doesn't work on any stock you could try to use the indicator to trade on a correlated highly correlated stock but that's also your your you know you're taking a it's not a risk but you know you're taking a small chance because that particular day the stock might not correlate very well all right you can see a little bit of a down tick and also the rsi is slowly just dipping in there but that's not enough you don't want to get shaken up now the when I say hang in there for five six bars that is a general guideline but when we have a profit you know then you know if you are if the profit is pretty good you can at least peel off some of some of this maybe three out of the five contracts I don't think we are at that stage yet it's still looking pretty bullish so we'll just let it let it hang in there for some more time and let's see how it goes yeah it's moving up nicely and now you can see the rsi moving into the bullish zone nicely the tick calculation just went well let's see what the what the latest tick is I think it's gone over 400 for the last for the last bar here went over 400 yeah 457 and now it is 545 so the ticks are improving and as you can see it's going well my always my philosophy is okay you know these are day trades things can change and so you know I would if it's things are moving in your way I would periodically try to just peel off some not a whole thing let the trade run but here we go it's moving even higher now so I'll just peel off one contract actually and because it's looking good the rsi also is telling us that okay we are in the bullish zone right now and the ticks are moving higher so let me see where we are it's not executing five okay we should get executed maybe put it at six all right there we go sold one you can trade a question is what are the index you can trade with this stick you can take you can trade any of the indices so the Dow Jones the Russell Nasdaq as well as the S&P so my view on that is my view on that is is that the S&P gives you the broadest picture of of the US markets and US companies in general it's the 500 largest US companies the Dow Jones just gives you a snapshot of 30 I mean the index is calculated based on 30 stocks the Russell goes to 2000 but those 2000 are very small stocks so they are the real small cap of of the US markets the Nasdaq is a highly concentrated set of stocks between technology and biotech so as you can see they're not a broad reflection of the market like the S&P is and that's why I like the S&P the most thought maybe on this after these two bars there might be a lower tick but no the tick is gone up to 642 now but I think it'll come down on this bar okay we have a profit of about 490 500 is coming down in a hurry so I would want to take I would want to take two off this is strictly from a profit management in a standpoint because when you have a nice profit you don't want to leave it okay so I took two contracts off so which means that we are left with two total profit is about 480 dollars on this trade and open is 170 so we have booked about 350 dollars somewhere close to that already you can see the ticks are coming down and you can see the RSI also dipping but let's wait for this bar and then we'll take the call on this trade because at some point these trades will run out of momentum so no this you can you can trade at any time with the with the index okay I mean you can trade all through the day I trade only at the open for my for this is my service that I provide I trade only at the open I mean it's not possible to give this commentary and manage the software and do all of that and do the analysis and talk and everything for our day so I picked my one hour and that one hour is best at the market open so just like we saw a bottoming out pattern here this is a potential topping out pattern still not developed fully and you can see the RSI just dipped below the bullish I'm getting out I'm getting out 460 or whatever it is is perfectly fine because you can always get in right I mean the only cost of the cost is the commission and for five contracts your commission will be maybe seven or eight bucks so whereas even two ticks down will you lose 50 bucks in that all right 510 dollars on this trade folks 510 dollars okay you can see some ticks coming in and I did not exit by the way let me explain my my philosophy I did not exit because I saw these two or three bars I exited because I have a good profit and I don't want to give it up okay so that's that's the that's the principle behind exiting this trade it's like you know the profit is there why do you want to give it up because I said right don't get shaken out by three or four or five bars but when you have a profit take it you can always enter again you can always enter again so if you want a free trial of this day trading signal service you can go to this bitly link it's bitly slash day hyphen signals now the day and the the d and the s has to be capitals and once you go there you can get a free trial you can you need to sign up there and you'll get a free trial and at the end of one week if you don't want to continue you can just send us an email at info at option tiger.com and we'll give you a full refund so once again the bitly link is bitly slash day hyphen signals with the dns in caps thank you