Acme Market Internals Pack
It’s all about context. In the markets. In trading. In life. Everything.
No matter your trading time frame, it’s a sure bet that you can better time your entries and exits by understanding what the markets as a whole are doing when you are considering pulling the proverbial trigger. The studies and indicators in this pack are designed to help you do exactly that, quickly and at-a-glance. Often, market internals contradict price action in the instrument you are trading. Other times, they confirm. Before placing a trade and literally every couple of minutes throughout the trading day, it can be important check the state of the broader market.
We liken it to driving a car. As you cruise down the road, every now and then you need to be looking in your mirrors. And you should always be aware of the cars and trucks that surround you, bicyclists next to you, pedestrians on the corner and the color of the stoplight ahead. What’s that? Yep. You guessed it – context.
Essentially, market internals are a trader’s rear- and side-view mirrors. Check them every so often, and certainly before you change lanes (make a trade), and often they can keep you out of expensive trouble (and avoid bodily harm?), or confirm that it’s all clear to make your move.
Available in the following editions:
Acme Market Pressure
And now for something completely different. Or is it? Either way, chances are you’ve not seen anything quite like this before.
The Acme Market Pressure (AMP) is a true gauge-style display which measures movement of a symbol relative to a configurable period of time. It is specially designed to resemble a dashboard-style gauge in a car, which is something virually everyone knows how to read at a glance. Might seem a little gimmicky at first, but keep reading, give it a try and then make your call.
So what is it measuring? Volatility, pure and simple. Though you can use the AMP with any symbol, it is specially designed to be used with market internals which, by definition, are transient, real-time market measures. For example, you can display any symbol as a bar chart… but what does it matter what level the NYSE TICK was at an hour ago? Or what about the US Dollar index? Can what happened yesterday in those symbols help you decide whether to take action in the markets right now? Nope. If you want to study correlations between internals and your favorite instruments… then bar charts are your friend. For real-time monitoring, they are really overkill.
That’s where the AMP gauges come in. They are real-time displays that are extremely space-efficient. How do they work? What exactly are they measuring? There’s no secret here – they are effectively another way to display the same information you’d see if you were using the Acme Sigma Channel study on a bar chart. What’s more, the AMP gauges display real-time and historical readings. A picture (or two) is worth 1000 words:
Here are the main features and capabilities:
- Can be used to monitor any symbol or instrument, not just market internals.
- Measures +/- 3 sigma of volatility relative to a configurable period of time. Positive readings on top, negative on bottom.
- May be attached to one of 6 positions on a chart on the left or right side of the cart, allowing up to 6 gauges per chart.
- Audio alerts can be set to sound when the upper and lower extreme segments are touched. The upper and lower extremes can have separate alert sounds, and each can be turned on or off individually.
- Gauge display “rewinds” to view historical readings as the chart is scrolled back in time. By default, the gauge records the past 255 bars on the main chart, but can be set to record everything for infinite rewind capability.
- The longer, outer needle displays the current reading, and the inner, shorter needle displays the reading where the needle was at the previous bar close for short-term comparison.
- An mini LED and text status indicates when the gauge is ready to or is displaying real-time data (RT = real time), is displaying historical data (H = historical) or is past the point where readings where recorded (ND = no data). The needle will return to the zero position when the status is ND.
- Gauge height is adjustable from 50 to 250 pixels.
- Gauge proportions can be set to either wide or tall, depending on your needs and preferences.
- Gauge segment, needle, text, text size and display colors are configurable.
Internals to Watch
Below are some examples of what internals, indexes and other symbols we recommend watching, depending on market conditions. Note that if you are a Zen-Fire user… they do not offer market internals as part of their feed.
NinjaTrader Symbol: ^TICK
IQFeed/Kinetick Symbol: JTNT.Z
CQG Symbol: DJTIC
NinjaTrader Symbol: ^VIX
The CBOE Volatility Index. It’s designed to show the market’s estimation of volatility in the next 30 days. It’s an effective measure even on much shorter timeframes, though.
IQFeed/Kinetick Symbol: VIX.XO
CQG Symbol: VIX
NinjaTrader Symbol: (Custom)
The Dow Jones Transportation Index is a weighted average of 20 transportation stocks. These are the companies that move goods around the country and the world, and they often lead moves in the senior indexes too, even intraday.
IQFeed/Kinetick Symbol: AI2T.Z
CQG Symbol: DJTIC
NinjaTrader Symbol: (Custom)
The NYSE Advance Decline Ratio is a pure market breadth index. It shows the number of stocks trading higher divided by those trading lower at any given moment.
IQFeed/Kinetick Symbol: IRNT.Z
CQG Symbol: DJIUP-DJIDN (delta, not ratio)
NinjaTrader Symbol: 6E ##-## or DX ##-##
The Euro or the Dollar futures. In recent times, these two currencies tend to trade inversely to one another as well as the market. When the Dollar is weaker, US markets tend to rally. Vice-versa for the Euro. Pick either one… just depends on which way you like to see the needle on the gauge move, so to speak.
IQFeed/Kinetick Symbol: @EU or @DX
CQG Symbol: EU6 or DXE
NinjaTrader Symbol: NQ ##-##
Nasdaq 100 technology stock futures. The NQ tends to lead the ES up or down during the day, providing valuable clues to potential moves and magnitudes.
IQFeed/Kinetick Symbol: @NQ
CQG Symbol: ENQ
Adding New Symbols to NinjaTrader
If it says (Custom) above, it’s not a symbol that NinjaTrader supports out of the box. But you can create new instruments in Ninja pretty easily. Watch the screencast here to see how.
Acme Tick Guides
This is a volatility-adaptive study designed especially for the market TICK indices. What are those? The are simply a real-time measure of how many stocks in that index are trading on an uptick or down tick (net) at any given moment in time. Each of the major indexes has one (NYSE, NASDAQ, etc.) and some data providers even have one especially for the stocks in the S&P 500.
In today’s market environment, much of the volume is transacted by large, automated trading algorithms. When one of these begins churning inventory, it’s very often enough to move a whole index or exchange up or down for a period of time. These programs, if they are accumulating positions are called buy programs. If they are in distribtion mode, they are called sell programs. These institutionally-executed programs leave plainly-visible tracks on the price action of the day – if you know what to look for.
And as you’ve probably guessed already, the tick index for the exchange you are trading is one of the clearest ways to see when a buy or sell program is beginning, peaking or winding down.
- Unlike other tick studies that use static lines or fixed thresholds for evaluating market-wide buying and selling, the ATG is adaptive. Depending on market conditions, there may be far more buying than selling pressure (or vice-versa) for hours, days or weeks at a time. The ATG adapts to changing volatility at a rate of your choice as appropriate for your exchange, style and needs.
- Provides a total of 6 levels of measure, 3 to the buy side and 3 to the sell side, each one sigma apart.
- Provides a trend line that shows you at a glance whether the recent pressure as been to the buy side, sell side or is balanced.
- Records new tick highs and lows for the day, and marks them on the chart for later study.
- Automatically records all excursions to or past the 3rd sigma to either side for later study.
- New! Has optional and very configurable audio alerts for when the tick values breach the 2nd sigma to either side as well as for a 3rd sigma breach.
Don't Get Tick'd Off
It is critical to realize that you might not be able to directly compare TICK values from one data provider to another. In the case of the NYSE TICK, many providers source the values from the exchange itself, and those values are updated several times per second.
But that’s not always the case.
Some data providers and some large brokers calculate the TICK values in-house. So if you decide to compare TICK values for any given time with someone else, please make sure you are both using the same data feed. Generally, based on our testing, even though the absolute values of the TICKs may vary, the values tend to be self-consistent. Meaning that if Provider A says the TICK was +1254 at 8:54AM, and that value was the session high so far, Provider B’s TICK may only be +1162 at that same minute. But Provider B’s data should also be the session high. It’s all good, it’s just that it’s all relative and not absolute.
Acme Tick Accumulator
The tick accumulator is a companion to the Acme Tick Guides above. Much like the volume cumulative delta study with which so many traders are familiar, when using this study on the ^TICK it will accumulate the values of the tick and help visually confirm broader market sentiment for the day. This method of looking at the TICK index was popularized several years ago by Dr Brett Steenbarger. For more detailed information on the rationale behind it, please see his blog post on the topic.
- Has configurable colors for positive (above zero) and negative (below zero) accumulations.
- Can use any of the built-in NinjaTrader plot types, such as bars, lines, dots and hashes, etc.
- Can be used either as a lower pane indicator, or as an overlay. Both modes are shown below, and are available as pre-configured chart templates as well.
How-To: Setting up the Acme Tick Guides
Setting up your tick study is pretty painless, though it does require one step some Ninjas out there may not find familiar. In this example, we’ll set up for the NYSE TICK index. If you trade the index futures, the TICK is the one to watch. And even though many data providers have TICK indexes for all the exchanges, the NYSE is the big daddy (or momma!).
So here we go…
- Make sure your data provider actually supplies the TICK index. Not all do, and we know at this time that Zen-Fire does not. Contact your provider if you’re not sure.
- Connect to your data provider.
- From the Control Center, click Tools > Instrument Manager.
- In the Name field, type TICK, then click Search.
- Select the TICK from the list, then click the left arrow below to add it to your Default instrument list:
- Once you confirm it’s in your list, then click OK.
- Create a new chart. Select the ^TICK as your instrument, and choose 1 minute bars. Note that all index symbols in NinjaTrader start with a caret ^.
- Choose OHLC or HiLo bars for this chart. You can use candles, but the bodies and wicks are basically meaningless. It’s really the highs and lows that you want to be looking at.
- Select something neutral as the colors for your up and down bars, such as Gray. This is personal preference, and depends on your chart background color. Either way, you can always change them later.
- Choose US Equities RTH as your session template. You should be looking at something very similar to this right about now:
- Click OK to create your chart.
- Since the TICK is on an essentially fixed scale of about +/- 1500 (though it can go beyond that), you’ll probably want to make this particular chart wide and not very tall.
- Click the Indicators button on the chart toolbar, find the AcmeTickGuides study and add it to the chart. You should now be looking at a chart that closely resembles this:
- You’re basically done. You should probably play with the settings some to adjust them to your liking, but this study is pretty well tweaked for the NYSE TICK right out of the box. The Period setting is 120 by default, which means that it includes 2 hours of TICK movement in its volatility calculations.
- Save your new chart as a template, and it’ll be ready to go with just a couple clicks.