They are captured in the currency number lines. And they are also captured in the price action leading up to the gaps. Remember, the gaps are a byproduct of what is happening in the market. It's simply a result of what the number lines are giving you. So for example, my number lines are deeply negative and that tells me we are in an environment where the market is very vulnerable to gap downs. It also tells me should we gap up, that it is highly likely we fade it. Data can't hide. What is happening under the hood should be embedded somewhere in your number lines. And if we gap down big every day but then rally and close on the highs day after day after day, then you WANT the information coming from those A ups to guide your analysis not the gap downs.
The ACD Method
- Thread starter sbrowne126
- Start date
They are captured in the currency number lines. And they are also captured in the price action leading up to the gaps. Remember, the gaps are a byproduct of what is happening in the market. It's simply a result of what the number lines are giving you. So for example, my number lines are deeply negative and that tells me we are in an environment where the market is very vulnerable to gap downs. It also tells me should we gap up, that it is highly likely we fade it. Data can't hide. What is happening under the hood should be embedded somewhere in your number lines. And if we gap down big every day but then rally and close on the highs day after day after day, then you WANT the information coming from those A ups to guide your analysis not the gap downs.
Houston, we have a problem. Oil is going to get smacked next week. Iran sanctions lifted immediately. Will now add 500k new barrels a day of production immediately and anther 500k barrels a day shortly after.
Is it possible the lifting of sanctions was already priced in?
Sure. Sentiment wise though? Every little breeze seems to be able to push down another domino no matter how slight that breeze is. When sentiment is working against a product, nothing is priced in. Economically speaking....sure. We knew sooner or later it would happen. What was up in the air was the level of aggression they would sell at these low prices.
Just worked some levels for the Half-Year As.
CL - A Dn $20.00
ES - A Dn 1,600
USDCAD - A Up 1.5121
I can easily see USDCAD surpassing that, CL could hit $20 I reckon, but ES 1,600 would be pretty serious.
CL - A Dn $20.00
ES - A Dn 1,600
USDCAD - A Up 1.5121
I can easily see USDCAD surpassing that, CL could hit $20 I reckon, but ES 1,600 would be pretty serious.
Those all look like good levels. What I think a lot of people don't understand is that the final phase of these moves come with the highest amount of volatility. Do I think CL can trade to 15 or 20? Sure. It doesn't need to drop every single day. I think the "real" low in terms of say avg time weighted price is going be say $25. But the final wicks could easily see a 15 to 18 print. When oil gets down into the 20's you are going to see violent two way action (rip your head off type volatility). Same goes for USD/CAD and ES. I think the time weighted avg price of ES could see a low of 1750 but the low print? We could easily have a down 80 ES day where we even close positive but we print a few trades at 1600. I think what is lost on most traders and investors is that bottoms get formed by liquidations. Nobody is a willing seller at those levels in any product.
When lows get put in, it's because accounts are getting liquidated, in most cases by someone other then themselves. This is VERY important to understand. You cannot trade without understanding this. The guy/girl dumping their $15 crude will not be doing so under their own control. In the case of oil, it will probably be a creditor doing a forced liquidation. In the case of ES, it will be your broker. That's how market bottoms work. That's also the reason I have not jumped in on the "this is the bottom for oil" train yet. I have not seen any liquidations yet and we know they are coming. The two to watch out for are Glencore and Noble. I believe both are dead men walking. When they liquidate, and they will, pray to God you are not long.
Attachments
http://mrtopstep.com/opinion-fund-manager-whos-been-right-on-oil-has-a-depressing-new-prediction/
“I think the next three to six months are going to feel like our ’08-’09 again. I think the calamity in credit is going to be bad.”
“I think the next three to six months are going to feel like our ’08-’09 again. I think the calamity in credit is going to be bad.”
I think the pundits have been discounting China way too much. China has some serious issues going on as has been pointed out effectively by Kyle Bass. He has been spot on. I really think the destruction of this will be more on the commodity side then the equity side but the equity side will get the spillover effects from the extra volatility.