I like to keep an eye on US $ for context.
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The ACD Method
- Thread starter sbrowne126
- Start date
Quote from Quon:
Most of the stuff I was looking at last week and some nice swings I had this week. Took in natty, XLP, and ITB this week, (had natty from last week, and the others were swings off their respective weekly A downs). Great week.
Now I'm short bonds via the TBT, (getting a tiny bit hairy up here) and long some LULU off the monthly A down. Consumer sentiment seems to be putting a nice bid under select retail names despite the so called "bad" JWN call, and strength is in all the stuff that's levered to the average Joe, (that's gotta be a good sign).
I tend to think we go higher because everyone I follow is so bearish! Not to mention how the JPM thing is being treated like the end of the world. For me XLF was able to climb back above the monthly A down today, (not that I'm bullish banks mind you). I'm bullish because its been the hardest trade to stay in, but seems to be the right one.
So if you recall about a month back when the market was making fresh new highs and I kept talking about how the number lines were deteriorating. We kept going back and trying to test the highs, each time looking like were about to break out, but the number lines kept getting worse. Well, eventually, the market rolled over.
What we are seeing now is exactly the opposite. The market keeps testing the lows but the number lines are actually getting stronger. These number lines are forward looking. Now obviously the number lines could fall apart, but we need A downs for that to happen, and we just aren't getting them...for now.
Just as a reminder for everyone, let's look at what the number lines actually are. They represent two things, price action and time. As time goes by, the old data drops off. In order for a move to sustain itself in either direction, you need to see confirmed A moves. If after a large move up or down, you start to see more failures, what happens is the old A confirmations start to drop off. This is essentially a base forming.
When we get sustained moves with a very high or low number line, what's driving that number line are A confirmations. That's important to remember. It's not simply price making a higher high or lower low but actual strong or weak price action being represented through A ups and A downs.
When people ask me about a market whether it be natty gas, oil, or the ES, my feel from the price action is coming from looking at the A levels and asking myself some very simple questions. If in an uptrend, are we making A ups? If in a downtrend, are we making A downs? If price is drifting lower and we keep failing at the A levels every day, I start to become bullish and vice versa.
My current 30 day number lines are as follows:
QQQ -7
IWM +13!
SPY +2
DIA +7
My 5 day rolling numbers are:
QQQ +3
IWM +5
SPY +5
DIA 0
Quote from Maverick74:
So if you recall about a month back when the market was making fresh new highs and I kept talking about how the number lines were deteriorating. We kept going back and trying to test the highs, each time looking like were about to break out, but the number lines kept getting worse. Well, eventually, the market rolled over.
What we are seeing now is exactly the opposite. The market keeps testing the lows but the number lines are actually getting stronger. These number lines are forward looking. Now obviously the number lines could fall apart, but we need A downs for that to happen, and we just aren't getting them...for now.
Just as a reminder for everyone, let's look at what the number lines actually are. They represent two things, price action and time. As time goes by, the old data drops off. In order for a move to sustain itself in either direction, you need to see confirmed A moves. If after a large move up or down, you start to see more failures, what happens is the old A confirmations start to drop off. This is essentially a base forming.
When we get sustained moves with a very high or low number line, what's driving that number line are A confirmations. That's important to remember. It's not simply price making a higher high or lower low but actual strong or weak price action being represented through A ups and A downs.
When people ask me about a market whether it be natty gas, oil, or the ES, my feel from the price action is coming from looking at the A levels and asking myself some very simple questions. If in an uptrend, are we making A ups? If in a downtrend, are we making A downs? If price is drifting lower and we keep failing at the A levels every day, I start to become bullish and vice versa.
My current 30 day number lines are as follows:
QQQ -7
IWM +13!
SPY +2
DIA +7
My 5 day rolling numbers are:
QQQ +3
IWM +5
SPY +5
DIA 0
Totally agree here. Take a look at the values I'm getting on this multi-week number line:
NG - week of 4/30 value was -4
NG - week of 5/7 value was 0
NG - week 5/14 value is now +2
XLU - 4/30 1
XLU - 5/7 -1
XLU - 5/14 4
I should note that my average line value is 0, so +2 is better than average.
On the weak side, weakness isn't getting weaker:
XLK - 4/30 0
XLK - 5/7 -2
XLK - 5/14 0
XLF - 4/30 -2
XLF - 5/7 -4
XLF - 5/14 -4
Again, wouldn't be bullish tech, just saying it didn't get weaker this week despite the vocal bears proclaiming their extensive historical evidence that it's 2011 all over again and the market is about to swan dive, (maybe it will, but I wanna see more weakness before I start deploying bearish strategies).
Financials? Didn't the world come to and end there this week? Jeez, sure sounded like it on my TV... Number line didn't even budge!
http://finance.yahoo.com/news/investors-losing-faith-commodity-hedge-094815366.html
Interesting article. It's tough out there.
Interesting article. It's tough out there.
Quote from Maverick74:
http://finance.yahoo.com/news/investors-losing-faith-commodity-hedge-094815366.html
Interesting article. It's tough out there.
What about currency funds? Why are there not more currency hedge funds? I suspect that funds cannot do what individuals can do, is that correct?
http://www.mcoscillator.com/learning_center/weekly_chart/is_jpm_the_burning_loh/
An interesting article by Tom McClellan suggesting a top in bonds and bottom in equities on May 14 +/- a day or two. I'm looking for a test of the March 6 ES low next week and if successful a good tradable rally. My number line is a little different, but still shows QQQ to be the relative laggard and IWM relatively strong.
An interesting article by Tom McClellan suggesting a top in bonds and bottom in equities on May 14 +/- a day or two. I'm looking for a test of the March 6 ES low next week and if successful a good tradable rally. My number line is a little different, but still shows QQQ to be the relative laggard and IWM relatively strong.
Quote from RCG Trader:
What about currency funds? Why are there not more currency hedge funds? I suspect that funds cannot do what individuals can do, is that correct?
Currency funds are horrible. Currencies can go years and years without any meaningful moves and then in one year explode, usually during a crisis of some sort. You need to spread your money around. That could be stock, commodities, debt or currencies.
Why miss a mega move in Gold trading a range bound currency? Why trade stocks when the VIX is at 13 when grains are going limit up every day? The best funds spread out there bets. If they don't, they will fall victims of 1 good year followed by 2 bad years of performance. All you have to do is look at the performance numbers of CTA's that focus on only market or hedge funds that focus in one small area.
Quote from RCG Trader:
What about currency funds? Why are there not more currency hedge funds?
Possibly because there are less exploitable trends in the currency markets and the need for more leverage to generate returns. Oil, gold, etc. can easily go up 20% without leverage, but that kind of move is rare in currencies. Gold has averaged something like 18% annual increase in past 11 years, an easy one way bet for anyone long in that time.
This is a lesson in choosing the right markets to trade. Choose the easier ones.