Mikula Forecasting Company

MarketWarrior: Million Dollar Pivot Finder

I would like to take a moment and discuss the MarketWarrior indicator Million Dollar Pivot Finder. This indicator will draw an upward arrow below the prices where it finds a potential bottom pivot, and it will draw a downward pointing arrow above the prices where it finds a potential top. This indicator is analyzing the markets for cycle points where the market appears to be over extended. When the market cycles over extend downward, the MDPF will pick a bottom. When the market cycles over extend upward, the MDPF will pick a top. The chart below shows the most actively trading interest rate futures contract which is the Eurodollar - symbol ED or the Globex symbol GE. On this chart the MDPF has identified two bottoms and three tops. Notice the MDPF identified the tops and bottoms with in a few bars of the actual top or bottom bar. The one limitation to this indicator is that it can sometimes go for an extended number of bars without finding a pivot point. For this reason the MDPF can not be used as the main indicator in a trading plan but makes a very good addition to another trading plan.


Below is a chart for the stock Canadian Natural Resources symbol CNQ. On this chart the MDPF has found six potential bottom pivots and two potential top pivots. There is one bottom pivot that I have labeled "B1" and one top pivot that I have labeled "T1". These two MDPF pivots failed to occur near a market top or bottom. Other than these two failures the remaining six MDPF pivots did occur near a market pivot. The successful MDPF pivots occurred from 0 to 2 bars away from the actual market turning point. If you look at the most recent MDPF bottom pivot it occurred just 2 bars ago at an exact market bottom.




Here is our third chart for the MDPF. The MDPF is designed to analyze market cycles. The chart below is an example of the MDPF in a market with a strong trend. This chart shows the August 2008 Crude Oil futures contract which is currently in a strong uptrend. In addition to the MDPF, I have added a 50 bar moving average. You can see the moving average is moving up with a very fast slope. When using the MDPF in a market with a strong uptrend, the MDPF will find the bottoms of the counter trend moves. When the market makes a downward correction, the bottom of the downward correction will often be accurately found by the MDPF. When trading in a market with a strong trend you should only trading in the direction of the trend and should never trade against the strong trend. The MDPF is a very good tool to help a trader buy into an existing bull market.




Intraday: Million Dollar Pivot Finder


One of MarketWarrior best proprietary indicators is the Million Dollar Pivot Finder (MDPF). I am now going to present an intraday 5 minute chart for the Dow Jones using the eSignal symbol $INDU. The first chart below is is a 5 minute bar chart for July 17. This chart displays local time CST. On this day there was two Change In Trend (CIT) signals from the MDPF. The first MDPF signal came just after 10AM local time and signaled a bottom. This is labeled "1". This CIT signal was just 1 bar off from the exact bottom. The second CIT signal from the MDPF also indicated a bottom and was 3 bars away from the exact bottom. Both of these CIT indicators were very good for short term swing traders.



The next chart shows the 5 minute chart for July 18. The time is local time and the symbol is the Dow Jones Index eSignal symbol $INDU. There were again two signals from the MDPF and both indicated a bottom. The first bottom signal came just before 9AM and the MDPF signal was just 1 bar away from the actual bottom pivot. This is labeled "3". Finally the second MDPF signal on July 18 was a failure. The CIT signal came just before 11AM but a bottom did not occur this time. This means that for July 17 and July 18 the MDPF found 3 accurate pivot points and 1 failure on the 5 minute $INDU chart.