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April 30, 2021

Volatility Reports 4/30/21

Trade the Break

Short Term the stock indices set up for a run, for a day or more. TEM on the three indices shown here provides the context for a forceful trend in the direction of the next break or trend following signal. To be clear, failures to break or to hold support should pick up selling as well.

The charts give an idea of where breaks, failures/reversals, and breakdowns would be triggered. The S-T tidal system is long, as indicated by the blue arrow. As pointed out inverted cycles are normally rapid affairs. So a breakdown here would be a long bar on the day, if not today then early next week. 

The next chart highlights Short Volatility Futures funds. They have just finished off a period of panic short selling. The VX inverse ETF – SVXY – goes up as the price of VX declines.

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April 28, 2021

Volatility Reports 4/28/21 World Index net the USA

Bears are trembling with fear and falling like flies. Bear ETFs are making new lows while their bullish counter ETFs are still 5 to 10% off their ATHs.

From our Contrarian vantage point, that is a good thing and supported by the rest of the world either not confirming the highs set by the S&P or finishing off their advances from the March 2020 low in Long Term (L-T) panic buying as highlighted in my first featured chart.

The chart helps the longer-term trader put the market into a completed cycle perspective. What started at a panic selling low from October 2008 to May 2009 to a panic buying high from January 2021 to date. The World Index, not including the USA, also by various ETW counts, has completed a cycle as well.

This top chart portrays it as an irregular topping process, which implies two things. One, the secular bull market is still intact once the correction is over. But – and you knew there was a but coming – the next leg down is a (C) wave, which is the same form of decline as the first quarter 2020 decline. Moreover, it is of a larger proportion with risk from the 2021 resistance zone shown from 504 to 578 to the support zone for 2021 that runs from 207 to 278 or 62%—a fib-ratio to boot.

The next featured chart shows an alternate pattern, an expanding triangle, which puts the market’s March low in a 4th wave position and makes the advance from the March 2020 terminal, the end of the secular bull from 1974, or the 90-year cycle low of the 1930s.

The post triangle rally was a neat 1.618 of the triangle’s width, putting it right on target today.

Lastly, the Technical Event Matrix (volatility modeling) provides the same clues that a panic – irrational – buying period is putting a major top in place. CT’s volatility of implied volatility shows that the background is at an extreme level of complacency, measured by %BB-VIX (left-hand window).

Not good if you are on a pub crawl with your trading buddies and caught up in the trend is your friend mentality.

The vertical lines highlighted when the last extremes were reached at both tops and bottoms and that the same setup is happening in the current time frame.

 

Regarding the “Time Factor,” MarketMap-2021 Issue #9 will be out by the end of the week. In the meantime, refer to the map shown below for members only.

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April 27, 2021

MarketMap-2021 Issue#9 Gold/USD

JG Wentworth Tells it like it is: “It’s My Money & I Need It Now.”

or

In Jerry Maguire’s words, “Show me the money.”

Immediate gratifications never go out of style. Everyone is a day trader, a scalper, even if they have a long-term investment time horizon. 

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April 25, 2021

Volatility Reports 4/26/21 Bitcoin

A top is in place, and a more decline is expected.

Volatility Report of 4/16/21 did not mix words when it said, “The volatility background provides a setup for a 30% to an 80% fall in the next 30 to 45 days.” That forecast was based on both our timing method and our dynamics model. Our current work expects the decline to pick up speed, not based on some wild guess to get publicity. Rather Contrary Thinker’s methods, which include the curation of social media content all of this is excited about the “new game” on the street and speculating about what it is going to do next and why. All of which comes across as “… throwing it at the wall to see what sticks.”

For the EWT petitioner, the decline unfolded in a nice and neat five-wave structure, calling the larger trend down. Thus far, the decline has only been 25% in a week, which is certainly not the makings of a currency unless the vendors have a wide bid/offer spread to cover their risk and dispose of the digital currency at the time of the transaction. That statement can be expended to all the cryptos as not being a substitute for money.

I would add that it will not look much like a hedge when the profit takers are done.

The breakdown level of 58k was taken out on the open. After putting in a near term now at 47.5k, the remainder of the initial targets remain 45k, 39k, 33k, and 25k. The legend of Bitcoin will not go away for the next 20 years. The smoke dream of pennies into tens of thousands was last born in the late 1920s, and the hat cycle is repeating. The question is how many banks – which to all accounts and headlines came to the game late, will have deep enough pockets to hold for the very long term and still maintain client reserves. 

It is worth repeating that Contrary Thinker sees BTC as the front runner of ALL “risk taker’s” markets. It is the bell-weather. So goes BTC, so goes the Dow Jones, the S&P, and the world indices.

The featured chart inserted below shows part of our time factor research. The 1 year and a quarter cycle – 65 weeks- began cresting back in January of this year. As with all bullish cycles, it is right hand translated, skewed to the right for its nominal price high, which gives it little time to make it to its cycle low due in June or July.

The bottom line in the face of all the sky is falling Hennypennies, the US dollar is the world reserve currency, and nothing will change that except that the alternatives will look even more fragile. Since the Plaza Accord, the death of the dollar has been the rallying cry for any publication trying to get a readership. After 40 years of neo-liberal currency debasement, the green back-ended its secular bear market in 2011. Today the USA is on the verge of real economic growth, and the demand for dollars for infrastructure will push the USD higher. Plus,  offshore currencies will find their way into this growth, into US capital.


Get the next three issues of MarketMap-2021 – for the time factor. Take the 45-day subscription trial, which includes the eBook of MarketMap’s 2021/22 cycles, the Special Report “Traits of a Market Panic” to make a Fortune PLUS eligible for a long-term discount when you subscribe. 


MarketMap-2021 Annual Scenario Planner provides historical parallelism based on 160 years of data, repetitive extra market events and their effect on markets, tidal cycles peaks and lows, market cycles for predicting time frames for lows, and astrological cycles to isolate cresting cycles. 
Volatility Reports fine-tunes MarektMap’s longer-term scenario planner for the implementation of hedges and long positions. The research publication uses advanced price-based systems buy and short bias signals, traditional Technical Analysis, and new volatility modeling for market dynamics timing, including sectors and newer ETFs.

Both publications share curated news media to add backstories that fit with the ongoing market-based research. 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker 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.

–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

April 22, 2021

Volatility Reports 4/22/2021 Aussie Buck

Signs of “reinflation” are clear. One of them is the Aussie buck leading the way.

What is also clear is the AUD had finished its first leg up in EWT terms, with a five-wave structure in a nice and neat ascending channel. That channel has been broken and a potential head and shoulders top is tracing out the right-hand side of the pivot.

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April 20, 2021

Volatility Reports 4/20/2021 Gold/Dollar

March 24 headline from our pages was “Gold entering a waterfall decline.”

No need to rehash the panic buying and double top. CT does not need to look at the charts that say gold pays no dividend; in fact, it has a cost of carrying in some cases. It would be remiss to ignore all the sales pitch briefs itemizing all the “whys” and “what for” backing up the new bull market in precious metals, like the following:

Getting Ready For Gold’s Golden Era

Click here to view the original web page at Getting Ready For Gold’s Golden Era

Authored by Matthew Piepenburg via GoldSwitzerland.com,

Worried about gold sentiment? Don’t be.

The mainstream view of gold right now is an open yawn, and sentiment indicators for this precious metal are now at 3-year lows despite the gold highs of last August.

Is this cause for genuine concern?

Not at all.

In fact, quite the opposite.

Most investors are totally wrong about gold, and below we show rather than argue why they are missing the forest for the trees.

Unlike trend chasers, speculating gamblers and gold bears, sophisticated precious metal professionals and historically (as well as mathematically) conscious investors are not only calm right now, they are biding their time for what is about to become gold’s perfect backdrop and, pardon the pun, golden era.”

Use the above link if you would like to read more, but a search through LinkedIn public stream you can find much of the same.

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April 17, 2021

Volatility Reports 4/19/2021 FANG+

The way the head goes, the body goes.

When I coached Jr. High School football in the states, one factor that was drilled into the offensive lineman’s behavior was to drive the head in the direction front-rower wanted the defensive player to move. The same holds in the stock market averages. The way the leadership goes in the market will follow in time.

Furthermore, as mentioned on these pages, the bigger the profits, the larger will they fall when trend-following systems kick in.  Contrary Thinker uses the Fang+ index as described here to keep track of the leadership in this cycle, the one that began on March 9, 2009.

The NYSE FANG+ index is equal-weighted. At launch, five core FANG stocks, including Facebook, Apple, Amazon, Netflix, Alphabet’s Google, plus another five actively traded technology growth stocks — Alibaba, Baidu, NVIDIA, Tesla, and Twitter.

The first chart in our featured gallery is the FANG+ index clearly showing a non-confirmation of a new high putting it out of gear with the ATHs by the Dow and S&P. Such a set up leaves the “Generals”  open to grave failure, and failures are dealt with harshly by investors and traders.

The middle window clearly reveals a similar top being made now on a Technical Event #3, like the primary high pivot 2/16/21 (a COT from MarketMap’s cycle’s table). Such a condition suggests the market background is feeble and due for a change. As you can see, the market’s potential secondary high is being rebuffed by Intermediate (I-T) (monthly) resistance starting at 7,023.00. Taking out last week’s lows of 6,862 would be a bearish sign.

Furthermore, the breakdown would gather a following because the I-T volatility modeling supports follow-through on new breaks or trend following signals. Tidal wave – without trend filters – has given a sell signal, as seen in the middle chart. The intraday chart on the right depicts a completed EWT pattern of a second wave rally irregular flat, which has ended.

The markets this week and into the end of April will be asked several demanding questions. For one “can you make a new high?” If so that event sends Contrary Thinker back to the drawing board; however, a new trend following cross under signal would be affirmative for the bearish camp. The same for a break below last week’s low at 6861.00.

Plus, a review of the components of the FANG+ index tells a story of pending weakness across them all, except for one or two on the outside.

To be brief, keep in mind the MarketMap-2021 longer-term scenario planner, if you are a visitor, Contrary Thinker suggests the eBook of MarketMap-2021.

Keep in mind that last week was an S-T change of trend time window where CT was looking for a change from up to down or sideways. Now the trend should turn decidedly lower,  with the next week or two to be lower.

An astute observation came across my inbox

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April 16, 2021

Volatility Reports 4/16/21

The topping of the cryptocurrency brand Bitcoin

The volatility background provides a setup for a 30% to an 80% fall in the next 30 to 45 days. The EWT count looks complete; furthermore, the long-term chart ran from 30k to 60k on panic buying as measured by our volatility model. The advance was all FOMC, which should be easy to flip without a logical base. The current L-T and I-T context call for breakouts or trend following signals to get carryover. Contrary Thinker’s bias is for BTC to signal lower prices. Hence trend following cross under, or breaks below the key level of 58,000 should get carry over. If so, the next stop is 45k, 39k, 33k, and 25k.

Contrary Thinker sees BTC as the front runner of the “risk taker’s” markets. So goes BTC, so goes the Dow Jones.

 

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April 15, 2021

Volatility Reports 4/15/21

Tidal cycles reached an extreme early this week and have flipped to a downward bias.

Obviously, nothing will ever be 100% efficient, nail top tick and bottom tick, it is all about being on the right-hand side of the pivot for your timing entry for control risk.

After the Dow low on the 25th, the uptrend was within the scenario. Contrary Thinker is long-term

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April 15, 2021

Trading Market Volatility

It is all about timing market dynamics.

%C is a proprietary indicator I created in the late ’90s as a setup to increase the odds of successful breakout trading. In the early part of the second decade of the new millennium, I created a historical measure of volatility that can predict the force of a move – direction neutral. Furthermore, when combined with %C (no longer free at the app store) into a four extreme matrix it provided more reliable information about pending changes of market conditions or dynamics.

All of which has to lead to the discovery, methods, and better use of this matrix as well as applying it to CBOE’s implied volatility to achieve Alpha.

The following is about one of our long volatility systems – iCahn Hedge; and why we feel it can be used as more than a robust day in day out trading systems but be used with outside timing rules, to avoid risk and enhance opportunity.

The easy way to describe the opposition to new ideas and change is how the idea of robust trading ideas like buy dips is so difficult to contradict. Because they work most of the time, but it is the aberrations that will bite you, and you miss opportunities.

It is the aberrations that are of interest here.

But if you have learned anything from studying and trading the market, is you know that declines come and go, and their velocity and rate of change are faster than the advances.

There should be no question that good traders and sophisticated capital managers take advantage of the available products, given the massive volume.

No matter if you are a system trader using a robust strategy trading for a daily average or use your own forecast methods and apply a trading plan, you can take advantage of long volatility trading while reducing risk.

There are two ways to take advantage of the spikes in volatility the market has every year, and in some years, they are monsters.  Trade like any other robust system, for the average trade only becoming aggressive when VX spikes. Or use rules of engagement to turn status on for the system.

iCahn Hedge system – has a Macro filter built-in and therefore misses a few trades playing defense. Every trade in the past year made $142,984.00 or made 35% on a $400k account, funded at six times max drawdown. A reasonable hedge against the average bear market, which is 36%.

This system among others is going onto the TradeStation Secure Server to be available via the TradingApp® Store. Our TEM set of indicators are uploaded now and the Tidal Wave two-week swing trader is available via this link.

Please be advised.

“As always when reviewing past performance of any nature, real-time executed or simulated, nothing can assure the outcome in the future will be the same or similar, even in the face of the most stringent testing methods.”

Taking every trade over the last 11 years long, only VX futures has good risk-reward numbers getting a high amount of slippage, which equaled $223,000, no including commissions. Sustaining a profit factor of 1.61 and an average win/loss ratio of 1.74. Both providing more than an adequate edge.


To assist traders and professional hedge fund managers, the Technical Event Matrix is provided to help you see the setups before the big breakouts in volatility. The worksheet below is just one example, and these two windows are included with the @VX strategy window on the same TradeStation™ page.

As part of our pursuit of excellence for our traders and capital managers, TMT’s publishing partner “Contrary Thinker” sents all of its clients with or without TradeStation, its MarkertMap-2021 with cycle timing Volaltity reports for market dynamics timing advisory.

Both provide more than an opinion about markets but insights into how the tools from TEM to all of our proprietary indicators are used and what they say.

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2021

Capital Managers and Professional Investment Advisors visit www.ContraryThinker.com.

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker 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.

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.

Keep ahead of the Mob today invest in the new bull market of Contrary Thinking. 
MarketMap-2021 Annual Scenario Planner provides historical parallelism based on 160 years of data, repetitive extra market events and their effect on markets, tidal cycles peaks and lows, market cycles for predicting time frames for lows, and astrological cycles to isolate cresting cycles. 
Volatility Reports fine-tunes MarektMap’s longer-term scenario planner for the implementation of hedges and long positions. The research publication uses advanced price-based systems buy and short bias signals, traditional Technical Analysis, and new volatility modeling for market dynamics timing, including sectors and newer ETFs.
Both publications share curated news media to add backstories that fit with the ongoing market-based research. 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker 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.

–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

 

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