Gold still is weak. The monthly levels are 1542 and 1608. The monthly number line is -3 as is the 5 day. The 30 day is still very weak at -16. With Gold you still want to be focusing on places to sell, not buy.
And then we have Natty. Sitting right at the monthly A up at 3.63. We have +4 on the monthly and +2 on the 5 day and +9 on the 30 day. So to make this simple, if we get a +2 day on Monday, all 3 number lines will confirm.
Let's not leave off Bonds. Bonds are really breaking down here. We currently sitting right at the QTR A down at 141'05. We already confirmed a monthly A down at 143. The 5 day is -7 confirming the momentum. The monthly is -4. And the 30 day is -9 and confirmed on Friday.
Alright, since I have neglected stocks on this thread a little bit, just to keep the dialogue going, I finally ran the number lines on AAPL and GOOG for those of you stock guys out there and going forward I'll provide some analysis on those two tickers. For AAPL, the 30 day is -3. It has been working off the negative values the last few weeks where it was -16 back on Feb 4th. The monthly line is -1 and the 5 day is +1. And this confirms what we see on the chart which shows AAPL trading in the middle of the monthly range with downward momentum subsiding. For GOOG, we have a 30 day of +16. The high was March 6th at +19. The monthly is +6 and the 5 day is +4. And as you can see, the monthly line confirms what we see on the chart that GOOG made a monthly A up at 820 and the momentum has been strong. Again, the idea here is to look for clues in the number lines that are NOT being presented to traders staring at the charts. You are trying to get in EARLY or trying to find opportunities others are NOT seeing. We are also using these number lines to CONFIRM what we see on the charts. Hope this makes sense.
They are legitimate buys right now in the Aussie, Dollar and Euro crosses. Ideally you have made coin well into this move. The number lines have been conformed for ages. Only the GBP/JPY did a re-set on the failed QTR A down.
Great analysis as always. What is the difference between the 30 day and monthly number lines you mentioned?
The 30 day measures more long term trend and plays a large part in timing the various cycles. It also measures the quality of the given trend. Think of the number line as your vitals in your body. And your actual outside appearance as the price chart. Many people look healthy on the outside when in reality they are very unhealthy on the inside. Price charts work the same way. Many times a chart will look smooth, trending and orderly when in reality, the internals of that trend are lacking. The number lines are the aggregate measure of the daily vitals of various products. It allows you to "confirm" what you are seeing on the chart as real and make sure it is not illusory. The monthly line corresponds to a "particular" cycle, in this case a segment of time of one month. It is married together with the monthly ACD levels. So when you get to monthly A level, you "check" the vitals. That's the monthly number line. If the monthly line confirms what the A levels are telling you, it gives you the confidence to take the trade. If it is not confirming it, then you reject the trade. The 5 day follows the same course. It also measures a part of the cycle, in this case, the most recent 5 days. Since momentum, like energy, is very short lived, you need to be very cognitive of when you are in a momentum phase. For example, you do NOT want to short something that is experiencing a burst of momentum. The thing with momentum is that because it's life cycle is so short, it's raw energy is very high. Much like energy in nature. Ideally you want to see this energy ignite at breakouts or the beginning of a trend. At the same time, the "lack" of energy is equally telling. If you are about to take a breakout trade and the energy is simply not there, then there is a very good chance you are chasing a false breakout or you are getting in at the end of a move vs the beginning. ACD works very much like the laws of nature. There are patterns and cycles, periods of equilibrium and periods of instability. This is why I stated before it's absolutely imperative that you recognize what cycle you are in as well as how far along in that cycle you are. Remember, ACD is three dimensional. It's price, time and volatility. Simply trading off price alone will not get you very far.
Great reply but sill not clear how the monthly is calculated. This is how I understand the number lines. 30 day- looks at the past 30 trading days, dropping the last day and adding the new day values. 5 day- same as 30 day just looking at the past 5 days. Monthly? Resets every month?
Right, the monthly re-sets to zero the first day of the month so it can track the monthly A levels. I like to see a 6 or 7 hit on the monthly confirmation. This tells me that we most likely had 3 confirmed A ups that led to the monthly A up. Again, measuring the health of the move. This will tend to negate large one day moves on news that ultimately will have no follow through.