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August 26, 2021

Volatility Reports 8/27/21

Unknown Unknown (Black Swan) or Known Unknown (Events Considered by Smart Money)

I’ll put it this way, the presidential race in 2024 will be Harris Vs Cheney. But first what is the market saying. For one, a panic buying signal was registered on 23 and 324 of August. The volatility background revealed an extreme of irrational buying on these two dates. 99% of the time they are events rather than conditions, the latter is normally witnessed on long bars, like the monthly chart, and used for risk and opportunity management. However, in the daily bar, it is almost always a “V” bottom or inverted “V” top, leading to a change of trend.

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August 26, 2021

Volatility Reports Bonds,USD and EUR 8/26/21

On the 16th of August VR said: “The set up for a big move by the bonds is now; only time will tell if it’s valid” August 26, no change.

While some may argue that a major double top is not in place, and from an EWT point of view, there are only three legs in the current sell-off, two down with an intervening rally. An A-B-C zig-zag, fair enough.

As a sidebar, I think this is where many advisors and capital managers get off the train because they feel they will look like an idiot telling their clients they are bullish on bonds because of it’s a zig-zag and not an impulse or motive wave.

Maybe one just needs a nose for change, see the handwriting on the wall, or get that minor necking pain in your neck (the later à la George Soros.) Be that as it is, the pressure is mounting for higher rates from all quarters, including the most important factor, the market itself. Leaving aside that South Korea was the first major country on the Pacrim to hike rates, both US 30 years and 10 years have the background for a dynamic trend to unfold at any time.

The monthly bar and the daily bar of the ten years have the Volatility Model signaling a Technical Event #2, a set up that 

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August 23, 2021

Volatility Reports 8/23/21

At the end of the first week of August, the expectation was, “The change of trend windows hit on the 8th and are pointing lower for four to 6 weeks.”

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August 22, 2021

What Happens to Afghanistan’s Gold Reserves?

What Happens to Afghanistan’s Gold Reserves?

The Taliban captured Kabul on August 15 and gained access to the headquarters, main vault, and cash reserves of Da Afghanistan Bank (DAB), which is the country’s central bank. The country’s central bank had an estimated value of $10 billion. This has prompted early fears that Afghanistan’s new rulers could seize the money for themselves. Unfortunately for the Taliban, the bank’s cash reserves—consisting of hard currency, gold, and a […]

August 16, 2021

Volatility Reports Bonds 8/16/21

The set up for a big move by the bonds is now; only time will tell if it’s valid

Last Friday, I hinted that the rally was a selling opportunity in the bonds, the government sector. Here I can go into a little more depth.

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August 12, 2021

Volatility Reports 8/12/21

To play the break or fade the break?

Put another way, is the most recent breakout the final break?

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August 6, 2021

MarketMap2021 Issue #13

The market has loved gridlock, but that is about to change.

For trends to occur, they must break the cycle. Tidal forces tend to keep the low and highs trading in a two-week span from low to high and two weeks back to a low.  HERE, the COT table purports that a high pivot is setting up today, with the 8th being a high probability date for a COT***. So today or Monday would be the interference.

September is

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August 2, 2021

New Way to Measure Risk

Playing defense is key to Alpha, in other words, risk management.

It’s simple math if your investment or portfolio experiences a drawdown of 33% for it to get back to even the investment needs an 50% advance, full stop. So why take a risk for an average or a  below-average opportunity?

Way too many professionals and self traders use the trailing P&L as an indicator for on/off risk. In reality, the market does not care about the size of your account that determines the size of your stop loss. Much of this “post hoc” logic puts the advisor/manager/trader behind the eight-ball because being stopped out does not tell you if the position was wrong, it just tells you the account was not big enough or the amount of emotional stress was too large being forced to sell. Worse yet, holding on into a low where the media – be it network or social – has a clear rationalization of why the market is in dire straights and dumping shares just in time for the bottom.

The featured charts in this issue show how risk is seen today, August 2, 2022, and my experience calling peaks since 1987 is my downside expectation has been understated. The timing is right on but the target is surpassed, which is fine as Contrary Thinker has tools to manage that and see the panic bottom.

However, today my methods have advanced since 1987 – and I am proud to say I still work with some of the same professionals. Back in the late 80’s Fibonacci retracements and EWT wave relationships were used. Today it is the volatility model I have developed – TEM- speaks loudly about the emotions or rationale behind the market.

Procuring shares for no underlying reason except the motivation of great profits is not a solid foundation. All of the US indices in the five chart windows shown here peaked on “poor buying,” as the old-timers call it. Today it’s called FOMO or irrational buying.

For that reason, it’s a fact that if bought on an emotional basis, it will be sold on the same. Hence when the shares go underwater for the “emotional buyer” and hit the trader’s pain threshold, they will dump the shares and stop listening to the perma-bull tunes promoted in the media.

On the charts, the “Red” shaded areas show where panic buying began and where it ends. CT measures risk to the price level where the panic buying started. The percent risk projected is annotated on the charts. I also highlight in blue the annual support zone for this year as the max level thus far. This max risk level is based on ratio projections from last year’s high/low action, which are visually clear zones for reversals or breaks.

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August 2, 2021

Volatility Reports Quantifiable Risk

Playing defense is key to Alpha, in other words, risk management.

It’s simple math if your investment or portfolio experiences a drawdown of 33% for it to get back to even the investment needs an 50% advance, full stop. So why take a risk for an average of a  below-average return?

Way too many players use the trailing P&L as an indicator for on/off risk. In reality, the market does not care, and it puts the advisor/manager/trader below the standard 200-day MA with their exits, following their fear into forced or panic selling.

The featured charts in this issue show how risk is seen today, August 2, 2022, and my experience calling peaks since 1987; the downside expectation has been understated. Today my methods have advanced since 1987 with Fibonacci retracements and EWT wave relationships where used. The volatility model I have developed – TEM- speaks loudly about the emotions or rationale behind the market.

Procuring shares for no underlying reason except the motivation of great, of profit. All of the US indices in the five chart windows shown here peaked on “poor buying,” as the old-timers call it. Today it’s called FOMO or irrational buying.

For that reason, it’s a fact that if bought on an emotional basis, it will be sold on the same. Hence when the shares go underwater and hit the trader’s pain threshold, they will dump the shares and stop listening to the perma-bull tunes promoted in the media.

In the charts, the “Red” shaded areas show where panic buying began and where it ends. CT measures risk to the price level where the panic buying started. The percent risk projected is annotated on the charts. I also highlight in blue the annual support zone for this year as the max level thus far. The market has many more stories to tell before 2022.

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