The ACD Method

Apollonius said:
Why do you keep implying I don't want to do any work?

I am just puzzled why you say I am using other indicators and mention volume.
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I am not saying you are using other indicators, if I gave that impression, I apologise. That was meant for others who have posted recently.

My point is if you want to trade intraday and find levels, TPO Market Profile is far superior to assorted ORs. You will get true levels that are not too far from Volume Profile levels. I spent months studying both, the difference is less than 5%, maybe significant for day trading, irrelevant for longer term.

I mention volume because it is not available in FX, which I trade, but many here don't trade FX and if their instruments have volume, then Volume Profile is preferable to TPO.

I'm implying you don't want to do work because in response to two links I provided, you referred to the volume bars below you chart. Market Profile is on a different planet.
 
koolaid said:
https://www.bloomberg.com/news/arti...-p-500-options-as-put-call-ratio-baffles-pros

Any opinion guys?
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Sure. Losing money day after day eventually gets people to stop doing it. The fact of the matter is, this market is not moving up enough to stay long and hedged at the same time. It produces zero return. Being short leads only to losses. It's the hot pan theory. How many times are you going to grab it and say "ouch" before you stop doing it. Markets are adaptive. It learns from it's previous mistakes. Right now historical vol in the SPX is near the 6 handle. That implies a forward return of about 3% using a historical .50 sharpe as our benchmark. At 3%, there is no room to hedge without creating a negative expected return.
 
Maverick74 said:
Sure. Losing money day after day eventually gets people to stop doing it. The fact of the matter is, this market is not moving up enough to stay long and hedged at the same time. At 3%, there is no room to hedge without creating a negative expected return.
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If I am understanding this correctly...SPY is not moving up enough to pay for the premiums of these bear hedges....so people are abandoning their hedges...which should bring about more volatility?
 
koolaid said:
If I am understanding this correctly...SPY is not moving up enough to pay for the premiums of these bear hedges....so people are abandoning their hedges...which should bring about more volatility?
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Yup, you got it. And yes, it "should" bring about more volatility. The problem I keep seeing is that this market is so one sided in it's thinking. Everyone was sure Trump was going to lose. Then, if Trump won, everyone was so sure the market was going to tank 10% which never happened. Then everyone was so sure we would dip right after the new year since there was a strong benefit to hold capital gains into the next year. Then everyone was so sure we would sell on the inauguration. Now everyone and their in laws are saying Feb is the month. EVERYONE wants to the market to go down including people who are already long. Because they are not long enough. The bears obviously want it to go down. And all the people sitting in cash want a long entry. Nobody wants the market to go higher and so that is what it's doing. LOL.
 
Maverick74 said:
Yup, you got it. And yes, it "should" bring about more volatility. The problem I keep seeing is that this market is so one sided in it's thinking. Everyone was sure Trump was going to lose. Then, if Trump won, everyone was so sure the market was going to tank 10% which never happened. Then everyone was so sure we would dip right after the new year since there was a strong benefit to hold capital gains into the next year. Then everyone was so sure we would sell on the inauguration. Now everyone and their in laws are saying Feb is the month. EVERYONE wants to the market to go down including people who are already long. Because they are not long enough. The bears obviously want it to go down. And all the people sitting in cash want a long entry. Nobody wants the market to go higher and so that is what it's doing. LOL.
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Ralph Vince also talks of a similar scenario in this link.
 
Maverick, what your thought on the 2&10 and how this relates to overall earnings and related NPV of money w/ rates moving higher?

Does Renaissance Medallion fund use ACD ?
 
ETFoption said:
Maverick, what your thought on the 2&10 and how this relates to overall earnings and related NPV of money w/ rates moving higher?

Does Renaissance Medallion fund use ACD ?
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I'm long the 2/10. I like it a lot. As long as the Fed stays behind the curve this will keep steepening. This will be accreative to bank earnings.
 
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