The ACD Method

[Maverick74]

For the last few days I have been getting distinctly mixed signals from the Indices. Not quite sure what to make of it.

Mav, insights?

Well, we had a failed monthly A up in the ES and we ended up bouncing off the failed monthly A down as shown in the attached image. I still have confirmations in all 4 indices. However, the VIX number line has been breaking down for weeks now and is showing some damage. I would not call the market weak here nor is it as strong as it was a few weeks back. I would be looking for opportunities around the edges. I would NOT try to short this market this close to all time highs. But watch the VIX closely. We are going into usually a very seasonally weak time for the VIX, and by weak I mean small ranges and usually declining vol. So if you see vol catching a bid a people stepping up to buy vol, it would be a concern.

And to clear up the first part of the post, when I say the VIX has been breaking down, I should have said catching a bid. I track the number line on XIV so XIV has been breaking down. Meaning it's showing some concern in the market. Sorry for the confusion.

 

[Maverick74]

BTW I've just started tracking the number lines again for Cotton, Coffee, Sugar, Coco, Corn, Wheat and Soybeans if anyone wants to begin a dialogue on any of those products. I'm tracking everything but the sun now.

 

[trader31]

Quick question, does anyone know why in Fisher's book he scores the BBY and FRX trades on page 96 as a +2 and -2 respectively vs a +3 and -3? Seems like if you compare this to the +3 and -3 on page 91 it is virtually identical fact pattern (i.e. confirmed A failed C) except he said in the +3 and -3 on page 91 that the market closes in the opening range vs above or below it on page 96. For example, I would have thought following a confirmed A-up that the market closing above the opening range after a failed C down would be a higher score given the market has shown greater momentum off the failure. Any insight would be appreciated. Thanks

P.S. not trying to get too bogged down in technicalities here, but wanted to see if i was missing something on the concept of a confirmed A with a failed C (i.e. +/-3). Thanks again

 

[partha]

Dont have any data yet on Softs ... but NG 30NL confirmed down a while ago and monthly ADown on 7/10 and its still working.

 

[Maverick74]

Quick question, does anyone know why in Fisher's book he scores the BBY and FRX trades on page 96 as a +2 and -2 respectively vs a +3 and -3? Seems like if you compare this to the +3 and -3 on page 91 it is virtually identical fact pattern (i.e. confirmed A failed C) except he said in the +3 and -3 on page 91 that the market closes in the opening range vs above or below it on page 96. For example, I would have thought following a confirmed A-up that the market closing above the opening range after a failed C down would be a higher score given the market has shown greater momentum off the failure. Any insight would be appreciated. Thanks

P.S. not trying to get too bogged down in technicalities here, but wanted to see if i was missing something on the concept of a confirmed A with a failed C (i.e. +/-3). Thanks again

That's a good question. They look very similar. I've modified my number lines so I score things differently then him and I've tried to apply a little more "logic" as to how I score things. There is no magic in how he scores his or how I score mine. At the end of the day I try to ask myself this question, does my score accurately represent how the product behaved today? If it does, then my score is accurate. That's all that matters.

 

[Maverick74]

Dont have any data yet on Softs ... but NG 30NL confirmed down a while ago and monthly ADown on 7/10 and its still working.

Yeah same here. Nice follow through on the monthly A down.

Regarding the grains though, I was shocked at how accurate the A levels worked for the grains. Over the last few years the CBOT has tinkered with the opening times. And now it appears as though they have a true OR. In fact, dare I say it, they are ONLY products out there with a true OR and the A levels reflect it perfectly.

 

[justrading]

Quick question, does anyone know why in Fisher's book he scores the BBY and FRX trades on page 96 as a +2 and -2 respectively vs a +3 and -3? Seems like if you compare this to the +3 and -3 on page 91 it is virtually identical fact pattern (i.e. confirmed A failed C) except he said in the +3 and -3 on page 91 that the market closes in the opening range vs above or below it on page 96. For example, I would have thought following a confirmed A-up that the market closing above the opening range after a failed C down would be a higher score given the market has shown greater momentum off the failure. Any insight would be appreciated. Thanks

P.S. not trying to get too bogged down in technicalities here, but wanted to see if i was missing something on the concept of a confirmed A with a failed C (i.e. +/-3). Thanks again

I think you are asking about a logical inconsistency. Yes, there is an error in his book which nobody seems to talk about.

Draw up a table of scoring criteria for each of the charts. The error will be quite clear. Then score logically.

 

[trader31]

That's a good question. They look very similar. I've modified my number lines so I score things differently then him and I've tried to apply a little more "logic" as to how I score things. There is no magic in how he scores his or how I score mine. At the end of the day I try to ask myself this question, does my score accurately represent how the product behaved today? If it does, then my score is accurate. That's all that matters.

Thanks very much, makes sense. 2 quick scoring questions if you don't mind, when you score an A-up for example, if it confirms on minimum time but does not move in your maximum time (fisher uses 2x opening range, but that is not relevant) does that mean an A-up was not made from your perspective? Also, I know from the thread you are very focused on products relative to one another (understandably so), will you score further points to an A-up in ES for example if all the sectors confirm an A-up (or would that just be scored the same and perhaps increase you confidence to trade or inform a pattern you look at for a trade)? Thanks again.

 

[trader31]

I think you are asking about a logical inconsistency. Yes, there is an error in his book which nobody seems to talk about.

Draw up a table of scoring criteria for each of the charts. The error will be quite clear. Then score logically.

Makes sense, thanks

 

[Maverick74]

Thanks very much, makes sense. 2 quick scoring questions if you don't mind, when you score an A-up for example, if it confirms on minimum time but does not move in your maximum time (fisher uses 2x opening range, but that is not relevant) does that mean an A-up was not made from your perspective? Also, I know from the thread you are very focused on products relative to one another (understandably so), will you score further points to an A-up in ES for example if all the sectors confirm an A-up (or would that just be scored the same and perhaps increase you confidence to trade or inform a pattern you look at for a trade)? Thanks again.

Well, if something "confirms" it means it "did" stay above the A up for a certain amount of time. If it does not confirm then it's not an A up. The best way to think about this is that A ups ARE time confirmations, not price confirmations.

And no, sectors do not influence how I score the ES.