When did CMI become AAPL? This market is crazy.
The ACD Method
- Thread starter sbrowne126
- Start date
Someone e-mailed me asking about the number line and what it means when it gets really stretched i.e plus 15 or plus 20. I don't really believe in the mean reversion aspect of the number line and I'll tell you why. The way Fisher uses the number line, a rolling 30 day count, the number line can actually drop off values without the market actually reverting. For example, if the ES is at plus 20 and the data points from the first 4 days of the 30 day cycle are +4, +2, +2,+3 and let's say the ES trades sideways over the recent 4 day period, the number line will go from +20 to +9. It basically got cut in half without the market selling off. In fact, the market could be 25 handles higher over that period!!!!
What I like to do, and i have mentioned it on this thread is to re-set the number line at the beginning of each month to zero. I keep a running total for the entire month. This will solve part of the problem of taking that +20 number back to 0 at the start of a new month and will keep the data more fresh.
So my advice is do not fade a strong or weak number line thinking the market has to snap back. The number line is not an oscillator, it's not measuring how over bought or over sold the market is. It's simply reflecting the internal strength or weakness in the market that is not obvious to someone looking at a daily chart.
What I like to do, and i have mentioned it on this thread is to re-set the number line at the beginning of each month to zero. I keep a running total for the entire month. This will solve part of the problem of taking that +20 number back to 0 at the start of a new month and will keep the data more fresh.
So my advice is do not fade a strong or weak number line thinking the market has to snap back. The number line is not an oscillator, it's not measuring how over bought or over sold the market is. It's simply reflecting the internal strength or weakness in the market that is not obvious to someone looking at a daily chart.
Here you go. Here is the IWM/DIA spread. Nice and smooth.
Yup, buy anything against oil and make free money today.
Quote from kinggyppo:
just an incredible move down in zb today wow off two full points.
This is when I get on my knees and thank the Lord I am not on the other side of this!!
Front ran this move off the Fed announcement last week. While ZB moved initially, it came off hard Wednesday afternoon. At the exact same time the TBT made a failed weekly A down. Maybe today's move was finally the event necessary to get the short bonds trade moving? Who knows, but that failed A down last Wednesday sure gave you a great point of reference!
The Russell 2k is already up over 12% YTD!!!! Wow.