Maybe I can help refine your questions to be more specific and prompt more discussion on this interesting subject. Spreads (in the context of trading one product against another) generally fall into one of five categories: 1) Seasonal, 2) Relative Strength, 3) Mean Reversion, 4) Volatility [options], and 5) Dispersion [options]. Seasonal spreads typically involve futures on products with seasonal cycles of supply and demand (e.g., agriculturals, energies). Joe Ross and MRCI specialize in seasonal spreads. Mean Reversion spreading is also known as pair trading or stat arb and is covered ad nauseum in books and online articles. Volatility and Dispersion spreading involves disparities in option premiums on correlated products. ACD lends itself more to Relative Strength spreads, so let's focus on Relative Strength and exclude the others. You can use ACD in conjunction with price action or other techniques to identify stronger vs. weaker markets and spread trade them in a long/short market-neutral way where you profit when the spread widens. With regard to ACD and Relative Strength spreads, some related topics that others may wish to comment on are: 1) the execution strategy using outrights or options, and 2) applying ACD analysis to the individual long and short components of the spread versus the spread ratio itself, and 3) references to any hedge funds or other major players who employ this strategy (a good indicator of its viability).
My SPY number line did not confirm this recent move to highs, I have a small short position on and will be looking to add on failed A ups. For guys following currencies what's looking interesting, hows USD/JPY looking?
Attached is the year end performance of the basic market ETF’s, along with their ending number lines. I’ve reviewed and recorded a number of samples from the daily, weekly, monthly and yearly A levels and how things played out (ongoing). M74’s thread coaching and insight proved right over and over. Take for instance the yearly levels. They proved to be major holding and turning points again and again. Here are a few examples from the broad market: DIA (Dow Jones 30): YAU and YAD were 171.87 & 155.56. The year’s low on 2/5 of 153.12. SPY (S&P500): YAU and YAD were 192.61 and 173.67. The year’s low on 2/5 of 173.71. IYT (Dow Jones Transportation): YAU and YAD were 141.68 and 121.90. The year’s low on 2/5 was 118.33. (The other ETF’s in the Broad Market had the same basic results.) A few examples from Growth and Value: IJK (S&P 400 Midcap Growth): YAU and YAD were 158.79 & 140.42. The first low on 2/5 was 140.52 and the year’s low on 10/15 was 139.15. IJS (S&P 600 Smlcap Value): YAU and YAD were 116.80 & 103.03. The 2/5 low was 103.50 and the year’s low of 10/15 was 103.01! These type of yearly A level patterns occurred in a majority of the attached. I never would have come up this type of thinking without this ACD thread and old what's his name. Thanks and Happy New Year Mav.
Hey now HomeGamer’s. As you all know, the week started weakly in many of the broad market ETF’s. Big guys like the DIA and SPY both had negative short term NL confirms and even one digit of -9 or less in each. However, many of them then bounced off their monthly A down and finished with strength. Some ETF’s showed strength from the beginning: GLD: Made a monthly A Up and ST NL’s confirmed. IEF (7-10 year treasury): Monthly A Up and ST NL’s confirmed and 30 day is confirmed. IYR (Real Estate): Monthly A Up and ST NL’s confirmed and 30 day is confirmed. SHY (1-3 year treasury): Monthly A Up. SLV (Silver) is very close to a MAU. TLT (20+ year treasury): Everything has been up here for a long time (hope you have this in your retirement MF’s). UUP: Mav has gone over this a number of times. (Note: I was asked to include A levels. Sure .... mine are as bad as anyone's
Real serious weakness in many of my number lines on the ETF’s listed above. In the broad market, the S&P Small Cap and Mid Cap are monthly and 30 day negative confirmed. If SPY is -9 or < tomorrow it too will be negative. In the Growth and Value ETF’s all except IVE (Large Cap Value) have negative monthly and 30 day confirmed. And so it goes.
Holy shit USD/CHF -27% at one point on increase in negative Swiss interest rates to -0.75% from -0.25% RIP to anyone short CHF
The Swiss removed their price floor. That is the type of thing you want to prepare the market for. That would never fly over here.
what do you think the Swiss central bank motivation was, I have my idea but curious what you have to say on it thanks
They were importing inflation from the EU. When you keep your currency artificially low, money comes in to purchase goods. Well the price of goods starts to go up and you have inflation. So you have to let your currency appreciate.