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February 27, 2020

Volatility Reports 02.27.20

No sign of a low, only the chance of a pause

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February 27, 2020

Crude Oil from dinosaurs into an industrial dinosaur

As Oil Nears $50 Again, is Now the Time to Buy?“What I find peculiar, what contrary thinker finds peculiar, is how analyst aka content providers – when in doubt themselves lead with a subject line that goes like this, “As Oil Nears $50 Again, Is Now the Time to Buy?”

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February 25, 2020

Volatility Reports 02.25.20 Risk Markets and Hedge Tactics

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February 25, 2020

Gold as Safe Haven and Algo Trading Dunn’s Deal

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February 24, 2020

The Outside World Febrary 24, 2020

There is no outside world, there are only people, a society, and the market

Everyone knows why they just don’t know when. Except for Contrary Thinker that knows when the “fragility” of the market exist and warns its clients; every day since Contrary Thinker’s MarketMap-2018 said the first risk-off signal on January 26, 2018, the finger was firmly pointed at no ability to foster a “soft landing” when the time comes.

Fed watchers put it this way that the Fed recognizes their ongoing monetary interventions have created financial risks down the road. The Fed must be aware that most of the policy tools are spent; they are likely ineffective at mitigating financial risks in the future.

This leaves them being dependent on expanding their balance sheet as their only weapon, leaving them at the whim of social unrest, which is also the case in China, where the results will be massive.

No matter how much of a Pollyanna you want to be, the earth is starting to move regarding social unrest. the wealth gap is not an imaginary thing; I heard about it in an econ 101 class in Australia years ago.

Hell, since 2007 – if not longer – the group that has seen an increase in net worth is the top 10% of the population. Like everyone knows this is not economic prosperity

It is a distortion of real economics out of fear instead of the intestinal fortitude required to save the system for everyone.

From 2009-2016, the Federal Reserve held rates at 0%, and flooded the financial system with 3-consecutive rounds of “Quantitative Easing.” During that period, average real rates of economic growth rates never rose much above 2%.

Leaving the Fed with inflation targets above 2% because inflation at 1% is too unstable, too hard to fine-tune, and keep inflation from collapsing into a deflationary spiral. Also, econ 101.


Here are two Underwater Equity curve charts. This notion was popularized by my friend Jack Schwager. It presents a unique way of evaluating equity performance because you can view the relationship between time and magnitude of drawdowns as they relate to previous and new equity highs.
The top chart is the underwater of the buy and hold since 1997 for the a one lot of the ES.

The next chart is a volatility breakout system, short only scalping for the day with the Turtle contract sizing strategy being used.

These types of charts enable the trader to look at the performance from a pessimistic viewpoint. It pinpoints how much percent risk occurred and how long it took to rebound back to hit a new equity highs.

A traditional equity curve plots the closing equity value, or account balance, for a trading system bar-by-bar in relation to time. The underwater equity curve focuses on losses bar-by-bar in relation to time. Now you can inspect all the drawdowns through a visual chart of drops in equity.

Here are two addtional screen shots. The more comon way of looking at the P&L. The top equiry curve is the one lot of the S&P being help since 1997.  Its clear since the March 2009 low the bull market taking hold.

The next chart is the equity curve – net 53.50 a trade – since 1997 of the same volatility breakout system as described above.  The big take away here is the profit run the strategy is happening since the initial change of regime peak January 26, 2018. So volatility has been increasing without much fanfare.

The best advice and most insightful vision are not curated from the social media space, they are right here and as anti-social as the market.  Become a Contrary Thinker today

Great and Many Thanks,
Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
Copyright 1989-2018
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-6183820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice, at any time.

— Contrary Thinker does not refund policy; all sales are the finale.
Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

NO WARRANTY / NO REFUND. Contrary Thinker MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, On ITS PRODUCTS AND At this moment EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL CBI BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OR USE OF ANY PORTION OF ITS PRODUCTS.

February 24, 2020

Short Trading Strategies and Volatility Update

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February 24, 2020

February 12 Historical Top

Early bear market decline or a correction?

A peak here in mib February has its own pattern, as discussed in the previous MarketMap. I will comment on the future as the market extends its decline past the first full week of March if it retains the character of a bear market beginning, not a correction in an ongoing bull.

The featured three window chart seen here demonstrates many signals for a thinking manes trader. The weekly chart shows our OB/OS set of oscillators out of gear at the peak, a sell signal.  NOTE: I have seen research on this idea to its merits and will be working with my TLO partners to program up the concept for testing over a longer period and across markets.

The middle chart highlights in red the  Dow futures inability to hold a breakout. Such failures are almost always dealt with harshly by the market. Hence a decline to the I-T support zone beginning at 28,053 is the minimum expectation. Lastly, the Globex Dow Futures going into today’s top has a new TE#2, a set up that suggest trend-ability is forthcoming.

The bottom line is a decline in MarketMap’s next calendar COT date of March 9-10.

A number of our good traders have been waiting for the chance really turn on the heat of profit-making in a fast unfolding decline. This is based on the potential of an irregular top, in EW terms.  Such topping processes end with a new high that is part of the correction, leaving way to a “C” wave decline that is a five-wave fast and furious event.

Previous publications have shown the idealized price structure, but in real terms, its target would be below the pivot of December 26, 2018.  According to Elliott, this chart allows for such a trend event to happen, with the clear triangle in the middle of the three-wave advance, which is corrective, not in the same direction as the larger trend.

Supporting the premise that the recent historic highs by the majors, the Nikkei\, and the FTSE were the end of the bull, is the NK action, which peaked 12.16.2019. Over the last two months, it is acting as the start of a bear, and As we go into a new week, the Nikkei has provided us with a new Technical Event #2, suggesting that it should test and beak below I-T support that runs from 22,026 to 22,550.

Get ahead of the curve, subscribe. Thanks! 

Jack F. Cahn, CMT

Contrary Thinking Since 1989,

Copyright 1989-2020

Jack F. Cahn, CMT ContraryThinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. www.ThinkingMansTrader.com, 800-618-3820

— ContraryThinker does not assume the risk of its client’s trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.

— Pricing is subject to change without notice.  My indicators and strategies can be withdrawn for private use without notice at any time.

— Contrary Thinker does not refund policy all sales are the finale.

–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options

 

 

February 18, 2020

Set up by the mini Russell provides engagement today.

Engage FastEddie ( named after the character in the movie “Hustler.”) on the mini Russell futures

The Russell futures chart on the right provides a clear set up that is zero to low risk – because a move above the most recent high to close there would put FasstEddie off signal and back on “off status.” Plus, since the strategy is “trend” following” or breakout following, it will take a moving train lower to get us on. Not the picking a high to enter – like buying a dip in reverse- leaving the position open to being stopped.

I have a more significant – 25 year – picture of the equity chart on the left, which I will post in the LI group today for comments. However, given the “Great Bull Market” of the last three years, look at the equity curve from trade 800, which is 2015. One can see how well the “short only strategy” has done in the face of the bull but more of that in the Group.

The background is near ideal for the Rusell to begin a rapid decline into March. The long and intermediate-term volatility background is fearless TE#2, supporting a break or trend following a move that will get carried over. The daily bar shows last Friday being a failure to hold its breakout on the regular bar and a close below “new support.”  Such negligence is a sell signal, and its background supports an expansion of the high to low range.

With the open today Feb 18, Fast Eddie will be engaged for the RTY, a close above 1696 would suggest to status-off the strategy.

The Crude oil Scalper remains engaged with only one trade that caused a loss of $775 per contract on the 13th. The middle chart reveals the Globex market breaking below day trader’s support after the market last Thursday hit S-t resistance – highlighted in red on the daily bar.  Plus the TE#4 supports a period of range days and our bias is a downtrend.

NOTE:  if you have other systems from me or anyone else and think it’s going into a period of optimal trading and would like to get across reference with me, never hesitate to ASK.

Copyright 1989-2020
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 8006183820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.
— Pricing is subject to change without notice.  My indicators and strategies can be withdrawn for private use without notice, at any time.
— Contrary Thinker does not refund policy; all sales are the finale.
Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options.

NO WARRANTY / NO REFUND. Contrary Thinker   MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, On ITS PRODUCTS AND At this moment EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED   WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. IN N capital should be used when trading futures or options.

 

 

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