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July 26, 2021

Volatility Reports 7/26/21

Signs of geopolitical change – no more gridlock; and social unrest bubbling up worldwide has investors and traders on edge.

In the face of pushing through congress the “build it back better” infrastructure program on a bipartisan basis, and the best real -middle-out – economic growth not seen since the late 60’s both political opposition and social unrest look convoluted.

Can the social unrest be based on “give me liberty or give me death?” What happens when tail risk arrives and this period of prosperity ends? Will all these protesters change their names and get vaccinated?

I’ve been called a fear-monger by some in social media. But the above are facts and valid questions. Along with the query that if the Fed has used all its tools to assure the next recession is a soft landing, will massive fiscal spending overkill the financial markets?

Venus conjunct Mars (August 24, 1987)

The big picture of the Dow & Co is in a near-vertical uptrend into a Geo-cosmic time period that correlates with major secular turns.
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July 20, 2021

Volatility Report Fang Index

The Fang’s days are over, traders see low-risk high-reward short selling here.

Almost a year ago I pointed out that Tesla was: “From a risk management point of view, the type of L-T buying for the last eight months is FOMO, panic buying, see the left window of the monthly chart, as easy to flip as the gold markets flip recently.

Contrary Thinker will be looking at the S-T charts for a sell signal. The I-T to L-T risk is 600, where it began its panic buying.”

Today the Fang+ index is looking at a double top that happens to be at predicted COT dates. The 2/19/221 dates were astrological and set a theme of corrections for the year and the COT on the 14th was a Solar-Lunar COT, an Astrological COT date, and the exact date of the secondary peak of the Nasdaq dot com peak in 2000, which is also in gear with the 45-year cycle (22 1/2 year).

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July 16, 2021

Why Join Contrary Thinker? Because Chance favors the Collective Mind.

On three different media!

It is just not about the services. The two market analysis newsletters meld into a system and actionable ideas. It’s just not about getting ETF and Option trade ideas on your phone. Plus, it is singularly just not about systems and indicators available on TradeStation’s TradingApp Store. It is about Collaboration in our private group in the space LinkedIn provides me.

Back in 2003, I read a magazine article, “Why Collaborate?” It pointed to the trend of sharing as nothing more than a meaningless fade and something only used for sales/marketing, aka social media marketing (SMM).

Today, collaboration remains widely doubted when it comes to trading, investing, and risk management. The aftereffects of WFC linger. Plus, the “Great Bull Market” has created a cottage industry of “do it yourself” types with little or professional know-how, all caught up in the work-a-holic “hustle culture of social media. Where the trend bails them out of mistakes, at least it did until twice in 2018 and 2020 in a big way. The decade of market timing has started, only a few have noticed.

The point is being open to “teamwork” because it is essential. The internet has broken down the bastions of Wall Street to allow groups outside the boardrooms to develop ideas and methods that can compete with the big boys.

All of that is simply anecdotal evidence to support the notion that collaboration is worth investing your time in. The fact that so many new software apps and add-ons are coming to market that support collaboration spaces and direct messaging – confirms this notion. But to assume that it is all available for free via the public stream of Twitter or Facebook is naïve, which will become clearer as the market becomes more dominated by experienced market timers.

While it is a historical FACT that collaborating in teams, groups, guilds, associations, or corporations historically and today spearheads our capitalistic system, cynicism remains.

Nothing has been invented without group collaboration independent of the abstract model of capitalism of Ann Rand’s Fountain Head.

So, the question is: HOW do you want to leverage your time? And WHO do you want to collaborate with?

If you are a professional advisor (RIA) or a private capital manager, a family capital manager, or a trader, Contrary Thinker provides you with a professional private group to participate in.

Thus, providing you with just not static and isolated ideas in newsletter format or on a blog that the analyst group thinks is good for you and your people. Rather, you have access to good analysis for your people, fits your objectives, fills gaps, and assists you in leveraging your time by allowing you to do what you do best. How? By collaborating through feedback, questions, and request.

Thank you for visiting with us in the private space LinkedIn provides my team and me to communicate and support new friends and existing members.

Please accept this letter as a friendly reminder not to let your visitors pass run out and become a full member to Contrary Thinker today.

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. 
Includes all of the ETF trade recommendations! and CT will be adding Options and Futures shortly.
If you are a systems trader with TradeStation™ renting any of my products from the  TradingApp™ Store is the same as becoming a Contrary Thinker membership. Check them out here.  All the same bennies plus the system from the App Store. 

On the go, most of the time?  Would you like an inexpensive way to get the trade ideas published here on the blog but on your phone? Get the Trade Exchange app for free, use this URL to sign up for free to have access to Contrary Thinker’s trading ideas, and if you take a trade idea(s), you only pay for the ones that are winners. You’ve got it, only if it is a winner; and Jack is a low-risk trader who swings for the fences 10 to 1 give to take.

Membership benefits and services
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 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
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July 13, 2021

Volatility Reports 7/13/21

A long-time mutual fund type said Monday there is no “bell ringer” of excessive optimism by the markets that would give a “risk-off” signal.

That in and of itself is a bell ringer because it’s not the train you see that will kill you, it’s the one you don’t see.

I’ve written in these pages that the panic pandemic sell-off was not a black swam. It was a known unknown because it was news in the public domain in 2019 hence the 19 in Covid19 yet the market in its blithering way advanced into February 19, 2020. Just like the run-up by Enron in 2000, where the news was out regarding its accounting practices, yet it climbed to all-time highs on August 23, 2000. Here again, a known unknown, what I think of as dump risk assessment.

I am sure that many will think I am simply projecting. However, a “known unknown” is the risk a person or organization is aware of but is unaware of the size and effect of the issue. As I have pointed out along with several United States Senators my advisory told my people to raise cash, gave “off risk” advice in the early part of 2021.

“Hmm, potential pandemic, what risk?”  Yet the media and the administration downplayed it for a time.

For example, my Father founded a raincoat company in the 40s “Aligator Raincoat Company,” as in the overcoat that William Faulk adorns in the Columbo TV series of the 60s, and never took off. For my Dad a rainy day was a good day, for him, drought was a risk, a known unknown regarding when, where, and how long, and so on. A known unknown risk.

Today there is a clear risk to the markets and not the ones that we all hear streaming in social media. Since the Trump election, I am more aware of the Geo-Political problems that face the markets. From the internal issues in the USA to the international issues that exist with Russian hacking to China’s competition.

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July 7, 2021

Bitcoin A Leading Risk Asset

Back on May 8, 2020, Contrary Thinker stated that “… Bitcoin is a risk asset and leads the stock market direction. It is not a hedge.”

While the coin supply is controlled, everyone is a crypto coin miner, creating new digital assets. So Bitcoin is a brand like Coke or Kleenex and a leader, but many, many, many more on the market and many on the way.

The sentiment is over the moon on BTC. Calling for $50,000.

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July 6, 2021

Volatility Reports 7/7/21 US Dollar

Demand for the USD from all corners of the world is expected to increase with economic opportunities created by Biden’s “Build it Back Better” plans.

Contrary Thinker is bullish on the buck since its double bottom in 2014. Along the way, I have pointed out that the Euro was a farce based on numerous sovereign nations forming a union because their proximity would not overcome their differences in culture and language and leadership. The central bank for the EU has its own QE issues to deal with and a lack of economic recovery hangover because of the austerity measures they took after the WFC. To date, they are still trying to catch up.

But that is the speculation behinds the bearish Euro bullish Dollar outlook. What is more important is what the market is saying.

The features three window screen grab shown here moves from left to right, long term monthly bar to intermediate-term weekly bar to short term daily bar.  The red shaded area is the sell-off into August of last year, reaching a panic extreme. When TEM hits Rule#1 like that, it calls for a flat, choppy period to follow. The proverbial dead cat bounce after a panic sell-off. When TEM hits rule#1, 90% of the time or better, expect a low to be in place, and the market builds a new base.

Like a panic top, it is a change of trend, and the emotional pain that short positions are in will give them the impetus to flip out of their positions. The emotional selling started at 94. Thus the market will move to this area now without much problem. Why now?

My volatility model – TEM – for both the weekly and daily bar have cycled to new extremes that suggest a trending move will pick up a following on the next breakout or MA crossover. The latter has happened on the weekly bar, and my AlphaTracking MA gave a standalone buy signal three weeks ago.

However, what is more, important is the S-T daily bar is on a fresh and leading TE#2, setting up the spring for a breakout. I have included the data window in the chart so traders can see the breakout levels. A move above 92.80 is bullish, and as stated above, a move to 94 should be easy.

While the relationship between Gold and the USD has typically and very publically been one of negative correlation, it is not a necessity. Furthermore, a strong dollar does not put the bash on commodity-based inflation. Regarding the latter, the demand for raw materials priced in dollars is not the same as monetary-based inflation, which all the gold bugs and inflationists can talk about.

Bottom line and current working positions and suggestions.

I am bearish on emerging growth markets, bearish on gold, bullish on inflation, bearish on the local stock indices, and bearish on bonds. I would call that right-hand tail risk.

CT is long the USDJPY since 01/27/2021 at 11:40 am and plan to add the longs in the current time frame.
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July 5, 2021

MarketMap2021 Issue #12

Brutal Reality Check Expected

If you believe in Technical Analysis, your working assumption has to be that form (the market) precedes substance (media rationalization or the extra market news). No, the market is NOT a discounting mechanism. News event – hundreds are being presented daily via social news feeds to community blogs from Zero Hedge to Seeking Alpha. Contrary to Thinker’s looks at price context and the time factor, everything else is a “Back Story,” the sizzle, not the steak.

Today social media pundits and providers of market data are in utter amazement. They have never seen their event-based analogies break so many records. The headlines are streaming ” never have we seen…”  For example, no dips quarterly, monthly, weekly, and daily exceeding all previous extremes among every observer that provides content in the social domain, but they remain optimistic. For the economic and media event-based bears, their story is the “same old same old,” with accessive debt being the primary issue and a crashing dollar and a gold rush. The bulls pointing to a reflation after the pandemic shut down will grow the market out of any problem.  The news background has not changed much over the last four years.

Overvaluation, no fiscal or monetary tools to assist in a soft landing when the next downturn happens to the competition coming from China.

The debate seems to be over inflation. Is it a problem or not, is the relation trade-off, or will it get out of hand? The messages are confusing to investors.  Here is an example:

Inflation May Have Peaked, Killing The Reflation Trade

“The reflation trade may have just died a horrible death on June 10. The CPI reading came in at 5% year-over-year, ahead of estimates for 4.7%. But despite the hotter than expected reading, bond yields continued to slide. Despite months of hotter than expected inflationary data points, bond yields have been moving lower, and breakeven inflation expectations are now plunging as well.”

Smart money is talking with their pocketbooks with a concern about either tail risk, both deflation, and hyperinflation—more on that below.

In the  LinkedIn group space, I pointed out last week how the market tipped its hand from the beginning of 2021 as irrational in the same way that it made its peak in late January 2018 and late February 2020.

I understand that many Technicians base their work on the premise that all market activity – is irrational (aka fear and greed), excluding the lone Technician. However, I have found that many technical analysts are heard, thinkers. As a rule, they are social animals. Be that as it may, my Technical Event Model (TEM) provides a clear insight into the buying and selling motivation: TEM tells me if market action is rational or emotional and when it reaches an extreme. With the irrational signals being rare on the long-term bars, they are more important when they do happen, at both tops and bottoms.

As stated from the beginning of the year, near 30,000 Dow, the buying became irrational and, on that basis, will be easy to flip as it is grounded in fear of missing out, aka greed. Hence these buyers will be guided by their account balances as they drawdown instead of a rational technical reason to be an owner.

From the start of the year – see the eBook “Time Factor” I have outlined the big cycles that have crammed themselves into this period 2021-2022, and the point they are cresting as this publication is being written over the 4th of July holiday weekend. With the background, the context of the market primed for a reversal of trend in the first six months of 2021 is now all about the critical Time Factor. The 245-248 years of the beginning of this glorious country, which by the way, is a critical returning cycle as well.

One of the primary large cycles is the 90/45 year cycle, which I will not rehash here. But there is no coincidence that when the numbers 1 through 9 are added, as in Pythagorean theory, they add up to 45 or that the 360 degrees in a circle are eight 45 degrees.

The current time window is the same as 1931-1932 and 1975-76, one period of deflation and the other of stagflation, the former left-hand tail risk, and the later right-hand tail risk.

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