The ACD Method

XLV

Healthcare looking strong lately. I have a 7 on the numberline for the XLV stretching back to the beginning of Nov. In the space, look at MRK, best price action in the group, and decent intra-day price action over the past week or so despite the market weakness.

(that said, I'm waiting for Dec levels - but just noticed the strength in healthcare as something to keep an eye on)
 
You guys might want to read this. PIMCO's prediction for Crude if we strike Iran.

http://www.zerohedge.com/news/pimcos-4-iran-invasion-oil-price-scenarios-140-doomsday

Here's an excerpt:

Pimco's Greg Sharenow has released a white paper on what the Newport Beach company believes are the 4 possible outcomes should Iranian nuclear facilities be struck as increasingly more believe will happen given enough time. The conclusion is sensible enough "Whenever the global economy is in a fragile state, as it is today, geopolitical concerns such as the possibility of a strike on Iran’s nuclear facilities become much more exaggerated. Although we cannot (and will not) predict whether an attack is imminent, or even likely, our experience and research tells us that any major disruption in the supply of oil from Iran could have either subtle or profound global repercussions – especially as excess capacity is virtually exhausted and we doubt that other OPEC nations would be able to compensate for a reduction in Iranian oil production." As for those looking for numbers associated with the 4 scenarios presented by PIMCO here they are: i) Scenario 1: Exports minimally effected. Concerns would drive initial price response; Oil could spike initially to $130 to $140 per barrel and then settle in a higher range, around $120 to $125; ii) Scenario 2: Iranian exports cut off for one month. In this case, we would expect prices could reach previous all-time highs of $145/bbl or even higher depending on issues with shipping; iii) Scenario 3: Iranian exports are lost for half a year. We think oil prices could probably rally and average $150 for the six months, with notable spikes above that level; iv) Scenario 4: Greater loss of production from around the region, either through subsequent Iranian response or due to lack of ability to move oil through Straits of Hormuz. This is the Armageddon scenario in which oil prices could soar, significantly constraining global growth. Forecasting prices in the prior scenarios is dangerous enough. So, we won’t even begin to forecast a cap or target price in this final Doomsday scenario. Needless to say, even the modest Scenario 1 is enough to collapse global economic growth by several percentage points to the point where not even coordinated global printing will do much.
 
Quote from Maverick74:

You guys might want to read this. PIMCO's prediction for Crude if we strike Iran.

http://www.zerohedge.com/news/pimcos-4-iran-invasion-oil-price-scenarios-140-doomsday

Here's an excerpt:

Pimco's Greg Sharenow has released a white paper on what the Newport Beach company believes are the 4 possible outcomes should Iranian nuclear facilities be struck as increasingly more believe will happen given enough time. The conclusion is sensible enough "Whenever the global economy is in a fragile state, as it is today, geopolitical concerns such as the possibility of a strike on Iran’s nuclear facilities become much more exaggerated. Although we cannot (and will not) predict whether an attack is imminent, or even likely, our experience and research tells us that any major disruption in the supply of oil from Iran could have either subtle or profound global repercussions – especially as excess capacity is virtually exhausted and we doubt that other OPEC nations would be able to compensate for a reduction in Iranian oil production." As for those looking for numbers associated with the 4 scenarios presented by PIMCO here they are: i) Scenario 1: Exports minimally effected. Concerns would drive initial price response; Oil could spike initially to $130 to $140 per barrel and then settle in a higher range, around $120 to $125; ii) Scenario 2: Iranian exports cut off for one month. In this case, we would expect prices could reach previous all-time highs of $145/bbl or even higher depending on issues with shipping; iii) Scenario 3: Iranian exports are lost for half a year. We think oil prices could probably rally and average $150 for the six months, with notable spikes above that level; iv) Scenario 4: Greater loss of production from around the region, either through subsequent Iranian response or due to lack of ability to move oil through Straits of Hormuz. This is the Armageddon scenario in which oil prices could soar, significantly constraining global growth. Forecasting prices in the prior scenarios is dangerous enough. So, we won’t even begin to forecast a cap or target price in this final Doomsday scenario. Needless to say, even the modest Scenario 1 is enough to collapse global economic growth by several percentage points to the point where not even coordinated global printing will do much.
More...
I own some PIMCO and it hasn't been doing shit here lately.



With over 200 pages of this thread, where would one go roughly if he was interested in a quick and dirty jest of this ACD thingy without having to read the whole thing.
 
When Mark Fisher did his trade for kids thing, he discussed being long US refiners instead of long crude under that scenario. I suppose if you have real assets, say in the millions you may want to have a strangle on some of the risk assets gold, oil, etc. There are a gazillion ways to structure that.
 
I have read through quite a bit of this forum. Lot's of very good stuff (especially for ET).

I am working through the book. Doing some simulated trading, re-reading, etc. This back and forth process seems like a good way for me to absorb these concepts.

One thing that I keep running up against (and I apologize if I missed this in earlier posts on this forum). There is a big emphasis on trading the primary market to get the opening range. With the advent of ICE, Globex, etc., there are very few contracts that you can really identify an opening price. That would seem to make many of the examples in the book less relevant in today's market. Does this suggest that the strategy has to be modified a bit to make it work these days? Has anyone experimented with 'estimated opening ranges' by taking more of a volume weighted average of trades pre-open? I have noticed Maverick talks a lot about much longer time frames. Since he appears to have good staying power here, is it safe to assume that the most of the ACD method has to be applied differently (as in longer time frames) than was the case 10-15 years ago?
 
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