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March 27, 2020

MarketMap-2020 Issue #7 Spring

March 27, 2020

Event-Based Cycles (EBC)

The date of the peak – February 12 is near the demarcation of the winter season and the early spring season used to calculate this cycle. We anticipated the mountain to hit in what we call the late winter season with a cut off February 10, but the height hit on the 12th. Be that has it may the tidal formula we use has that peak nearly identical to the ones that occurred in 1906, 1934, and 1966. This does not throw any previous scenario based on EBC out the window as the peaks that happened in the early spring period produce similar-looking declines with a similar change of trend dates.

 

Here are two clear alternates for the shape of the decline.  In the previous Market Map, I suggested that the peak of 1937 and the decline in 1938 fits the character of a potential all-time high of 2020 in the early spring season February through March season

However, what is different about 1937 is it was not a new all-time high, whereas 1966 was. Plus, the tidal factor lines up near perfect with the top on February 12, 2020.

In either case, the market is in a brae trend into October, where 1937 has a low in June a recovery into August before a panic into October. The 1966 fractal is an ongoing downtrend, without much looking back.

MarketMap-2020 Scenario Map and Table.

I used the market map calendar to reveal in the last letter a scenario where a bounce would start around March 10, carrying prices higher into the next change of trend date (COT) dues between March 16 and April 1 for a near term perk before the trend continued lower. A segment of the calendar is shown again here.

 

If the scenario is in line with the 1966 bear market, a decline here will finish off the first leg of the bear market, followed by a S-T tradable rally into the April 14-28 time window expected to be a peak again, that fits the 1966 fractal leading to a panic in May. This month has the second most panics in history next to October.

The idea of panic or at least a one day fall that equals or exceeds the 13% range day decline on March 16 is expected.  To key in on the dates to expect that challenge, the table below on the long bar dates will be helpful.

Key Long Bar Dates

Gann had a thing about anniversary dates. I refer to them as significant splash dates that ripple throughout history.  The ten-year cycle provides the investor and trader with information that can easier be overlooked and had a tendency to repeat. The long bar range day that happened on March 16, 2020, is a prime example.

It is more than their occurrence in the first year of the new decade. Instead, they occur in the same mathematical calendar segment that runs from late winter to late summer and inside the last phase of TMT’s Tidal Cycle trading system.

In the table above, all of the highlights of the date in red occurred in the last half of the down cycle in the Tidal system. Therefore, a massive market pivot here in the 3/6 to the 4/1-time window should lead to a downtrend at least equal to the February 12-28 decline. Expectations are for climatic action in mid-May because that match’s the 1966 scenario and the long bar dates highlighted above.

Markets make lows, not on good news; they make meaningful lows of lousy news and climate action by the markets. So, while the bear market should reach into 2021, an I-T low is expected in mid-May.

Decennial Theory

Issue #1 of Market Map 2020 points out the recovery of the first year of a new decade as a year that contains the start of most year markets. Furthermore, from the year 1860, recessions have had their start all with an outside event trigger. In 1860 it was the civil war.

 

The above table shows the damage done in these years. I have averaged the number of profits taken – percent decline – and averaged the time spent in the bear mode throwing out the shortest and the longest.  These numbers are very much in line with all bear markets over the last 120 years.

 

Market Theme

Going into 2018, I said ” the theme of greatness should continue.” In 2017 it was the most significant low volatility year on record. From February 6, 2018, the extension of the bull market made it the greatest of all times in terms of time and price. That market motif will carry into the bear market cycle. So Contrary Thinker expected it also to be the greatest of all times.

 

Back Story

James Bullard of the St. Louis Federal Reserve has written a must-read conceptualization of the current situation.

The Federal Reserve has risen to the occasion.

The markets continued their rally for the third day.

If you like what we provide here, subscribe, includes “Volatility Reports.” this is critical as it provides the market background, its level of tension that precedes full-blown trends or dull choppy trading ranges. For all time frames.  

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

March 22, 2020

J P Morgan Update

 

JPM in long term support, no sign of a low yet. 

Published  2019/11/20 “JPM Play the Break or Fade the Break?”

Another way to say it, will the market continue to trend or will be correct. To dig deeper, will be a break to new highs and follow through with a similar rate of change as has been booked thus far since the 10/3/19 low?  Or, will it fail and sell-off, form an inverted “V” shape top and give back gains with a high rate of change?

CT’s featured chart shows JPM at an extreme. with the market in both L-T and I-T resistance zone. Plus the longer-term chart on the left reveals an uptrend that is old, feeble and persistent but due for a change, as well as the I-T basis in the weekly bar.  <more below>

The Short Term chart has the TEM model recycling to a fresh Techcnail Event #2, suggesting a high rate of change trend is back by the tension in the market. Like all volatility models, it does not suggest a direction, even in the face of the media’s bias of referring to stock market sell-offs as volatility.

However, the bigger picture of the JPM that divulges that a 13-year horizontal triangle was the springboard for this breakout. As such, a post triangle thrust is terminal trends, not the kick off of a new one.

Watch this space.

Plugin and ready to trade indicators and a full library of nine systems including all-time frames and markets, including specialized systems for hedging portfolio risk once or twice a year.

See our pricing table here.

Annual Winter Holiday Seminar. Complete library available with tutelage plus three-night seminar in Palm Springs California that includes the full library and training over the weekend on how to execute.

CT covers the financials, forex, stock index futures, commodities, ETFs, inverse ETFs, and long volatility ETFs and Algo strategies.

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2020

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.

 

 

March 20, 2020

We are not chart whisperers

Contrary Thinker’s the Debrief

March 20, 2020

“To know where you are going, you have to know where you have been”

“The idea of record-breaking will continue in the headlines in 2018. It is only common sense to know this.  In each bull/bear cycle since 1974, there have been record-breaking price events. Each bull market has been bigger, better, and greater than previously. Each new period contained record-breaking events from the number of consecutive higher close days to the most significant one-day advance in history.”  I sent on to say,

“The same has held for the bear market cycles… both fiscal and monetary policy has painted America’s economy into a corner, a corner that has no alternatives that are positive to bail out the market and the economy when the next down cycle occurs.”

Many investors, traders, and managers focus on the outside world, the exogenous shocks, the known unknowns like Convid19. It was on Homeland Security’s radar at the end of 2019.

Like previous virus emergencies, the market’s reaction was based NOT on the morbidity of the virus, instead the market’s action is based on the condition of the market when it hit.

If you look at the two worse in terms of S&P damage, SARS hit at the end of a three-year bear market, to accent the low and scare buyers away. Zika hit during the most significant correction of the “Great Bull Market” to put an exclamation mark on the end of the correction.

However, Convid-19 is different, not so much in its morbidity, that is not the judgment we can make. Rather, what we can say is that after the tax cuts in 2017 and the QE monetary policy over the last 3 to 4 years, there is nothing left in the trick bag of the authorities to soften the landing of the market – and the market drives the economy.

So, after the Dow Jones falling 35%, what are the various sets of opportunities and problems; and if you feel ill-prepared, it is not too late to get caught up. Read on

Contrary Thinker wants your business, to “cover your six,” make sure your clients get your best and the time they deserve.

“As you can see in our change of trend (COT) table, the market is in a cluster of time windows likely to lead to a high pivot price, confirmed by a sizable decline %5 plus – established by our big swing (multi-month) systems sell (taking profits) and sell short signals before the end of the month.”

Contrary Thinker stays hedged until our measures of volatility exited panic mode, the nominal price low has nothing to do with profitability.

Volatility Report
September 24, 2018

Contrary Thinkers is not a chart whisperer; we have mathematical tools that confirm what the bar charts are saying. They precede the market’s bar charts.

In the above 9.24.18 VR, I said, “The scenario was for the failed new high in late August-early September, but as the January COT date was early by ten days. Now it looks like the peak will come at the end of the calendar month leading to a sell-off into mid-November.”

I went on to say that along the way; traders should expect long bar day decline, declines that measure near the expected return a buy and hold investor can achieve in one year. To keep our group on the front foot, our models project dates for the long bar declines. I said, “Dates for the expected long bar decline are 12-Oct, 17-Oct, and 22-Oct.” the long bar day hit October 10, of 3.6% from open to close.

Volatility Report
December 3, 2018

Without boring you with all the reasons for this conclusion, our group was ahead of the curve: “Bottom line is if the market cannot break out early this week, get above I-T resistance, there will be a crash going into Xmas.”

What was surprising is how the bravado mentality became so entrenched in 2019, “buy the dip” was the war cry. Today, nearing the end of March 2020, it still is.

Yet, what has a so-called perma-bull gained by holding since the end of 2017, over the last two years? Without the use of market timing at pivotal highs, all they have now is temporary social media bragging when they were at the new highs? Hence their investment method is based on pride and the unprofessional badgering and taunting of advisors that were advising bear market timing.

Today all they can do is hold their client’s hands as they see their 401k or other long-term investments give away their profits to the tune of 36%.

Volatility Report  February 10, 2020,

it was pointed out that “Multiple non-confirmations to go along with extremely high levels of optimism by 100% of sentiment readings provide a peaking background.”

All of the major stock indices made climatic tops on panic buying. So  given the 50% risk and the brazen attitude of the bulls, it was clear it is not going to be a pretty ending.”

Which brings us to the chart on the right and the Volatility Report dated February 19, 2020. Where, among other market-based reasons, one can see that volatility was about to go into panic mode. A situation that hit home in 2011 and 2008.

Our bottom line was the following: Risk is off, like cash and algo strategies to hedge (profit) from decline is the status on. Over the weekend, Contrary Opinion published.

 

 Hedges on short only CL, EX, NQ and RTY plus long-only VX. CT’s volatility model of CBOE’s volatility index gave a buy signal the week beginning Sunday the 23rd.

We don’t need to show you the profitability of our strategies, because the simple act of just raising some cash – taking some profits – would have been a great benefit to the investor/manager.

Contrary Thinker has been waiting for this debacle since late 2017, it was not wishful thinking. Rather it was based on research that covers over 120 years of the market history and new aged volatility modeling that provided risk warnings.

The good news is over the next ten years is Contrary Thinker can now shift its focus from the avoidance of risk side and from profiting from bear market corrections and larger declines to the buying opportunities side as well. To be clear, the timing of market dynamics at highs and lows will be more important than managers and investors have experienced since the late 1960s into the early 1980s.
We are not gloating here

 

Contrary Thinker, its private group of programmers, traders, and fundamental analyst friends have been working to protect our members, show them ways to prosper during the downturn and working to provide transparency to potential new subscribers so they can gain the confidence to let us do the same work for them.

 

I guarantee my work based on your happiness.

 

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2020

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 760-459-4681 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.

 

March 18, 2020

Hedge the Notes and Bonds

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March 10, 2020

Hot Money Euro Dollar

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March 9, 2020

Gold Market “here comes the judge.”

The metal was rebuffed hitting 1,700/oz overnight while the share markets heave

Even if you are one of our newest members, it’s easy to read the “Volatility Reports Chronicle” menu above to find all gold comments or go to the “Volatility Reports” LinkedIn Group to do a speed search by keyword #gold to know we saw this most recent rally as the ending of a very large counter-trend, not the beginning of a new bull move to new highs and beyond.

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March 8, 2020

Volatility Report – Long bonds

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March 3, 2020

Media’s reason for bullish Gold, Market says no

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March 2, 2020

Volatility Reports 03/02/20

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