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CT Journals
Jack Cahn
January 14, 2021
Volatility Reports Euro 1/14/21
The union of European states does not have the same underlying language or the same underlying culture.
Without such the Euro has an inherent emotional weakness to stay together in times of strife.
The euro market has competed at least its first leg of counter-trend correcting its new long term bear market that began in 2008. Else it has completed a cyclical correction. In either case, it is about to start a tradable downtrend. A move to the 1.81 to 1.94 zone is likely.
The featured chart, hit the low side on LongTerm, resistance, which is coincidental with EWT resistance ghat runs from point 3 to 4 in the left-hand chart window. Along with the failure to get above that price level, the market failed to hold above I-T resistance shown on the daily bar chart.
The long term market peaked on panic buying and has an I-T high pivot with a TE#3, calling for the change of trend (COT). The daily bar also shows the “Alpha Trend Tracker” rolling over giving an S-T sell signal. The S-T volatility modeling supports the high to low range expansion, so the trend sell signal should get S-T carryover.
From a tactical point of view, CT will be looking for a low-risk entry point for bear trades.
more to follow.
Back Story
European Central Bank Steps Up Its Stimulus as the Economy Contracts
The central bank said it expected the economic impact of the pandemic to last well into 2022, prompting an expansion of relief programs. Credit…Yann Schreiber/Agence France-Presse
https://www.nytimes.com/2020/12/10/business/european-central-bank-stimulus-coronavirus.html
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 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 My indicators and strategies can be withdrawn for private use without notice at any time.
–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
January 13, 2021
Volatility Reports 1/13/2021
Unexpected long bar move is very possible in the current time window – January 13-20
The chance of a secular change is high. Risk assessment is a drawdown in global share markets of 36% in the first leg
Working from the long term down to the short term, they all reflect FOMO buying at an extreme. The Technical Event Model (TEM) reflects rule#1, an event that is a leading signal of a major change of trend. Over time it is normally seen at lows but has the same meaning at high pivots. The past year to 15 months across all the popular markets there is a widespread emotional buying that persisted for months, It has shown up in Gold, Bonds, and FANG stocks.
Along with the current extreme high in Tidal Forces, the cluster of change of trend dates provided by MarketMap-2021, an inverted “V” ATH is expected here. One thing to watch is, while I expect a sudden drop like the one that hit Bitcoin recently if the high to low range exceeds 5%, there has to be follow up with the downrange of the following days exceeding that 5%, else the sell off is only a correction, not the kickoff of a major bear. In the latter case, the major top would come in in April/May as outlined in MarketMap-2021.
The weekly bar is in gear with the longer-term charts, TEM is at a panic buying extreme or the trend has reached a TE#3, calling for a change in trend because the market’s underpinnings are laboring.
The short term chart – the daily bar – has reached a panic extreme except for the Nasdaq 100 futures. I have highlighted where both S-T and I-T support zones come in for all the indices once the trend turns lower.
The implied volatility part of TEM is giving early warning signals that a high pivot is heard. It is always worth the waiting for getting on the right-hand side of the high pivot to control risk. Furthermore, Contrary Thinker wants as near to perfect set up before taking a risk or putting on a hedge.
The new decade of market timing is here after 13 years of being out of favor. Get ahead of the trends. It’s inexpensive to join and expensive to discard for any reason.
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
January 12, 2021
Volatility Reports 1/12/21
The leading indicators for the stock market are ticking off the checklist.
Back on 12/30, the Bitcoin market was labeled a Bell Weather. It should be clear to advisors, investors, and traders that BTC and others are not StableCoin, something that can be used for a more secure currency one that can not be counterfeited. But given the volatility of the market, it is a risk asset. As such, it is a bellwether for other risk markets, it is not a hedge as advertised.
The key price level of 33,145 being tested again. If it fails, the next stop is the big round number of 30,000. The daily bar uses our trend-following methods with tidal extremes are its triggers to enter and exit. The S-T trend is now moving lower with Bitcoin tidal cycles flipping on January 22 +/- a day.
The last count was that BTC leads the stock market by five days, which points to the 13th or 14th as a high pivot a the beginning of a decline. That date fits with the work published in MarketMap-2021 issue #3. Stay tuned for a short sale and hedge ideas.
CT is watching the US dollar to confirm a low and a new uptrend is in place and the leading Technical Event Model – both historical and implied volatility – is also showing some early signs of a tradable, if not a major top, in the US stock markets.
Bonds continue to probe for a low. The daily bar hit a panic extreme and the panic index is near sold out. Ss-T support runs down to 162. Longer-term risk is 137-151 for this year.
I suspect at least an S-T ( days – week or two) of working off the emotional sell-off. New shorts will be put on after the expected consolidation. the big question is will the bonds act as the traditional counterbalance for a declining stock market.
Since the contrarian point of view is to achieve that protecting it will come from investing in one end of tail risk, which means being long bonds and long stocks is a losing combination, long term. More to follow on that as well.
Back Story
Digital Poker Sites Say ‘95%’ Of Players Demand Payouts In Bitcoin To ‘Enhance’ Winnings
“As bitcoin powers back toward all-time highs unseen since late 2017, traders around the world are wondering: who exactly is driving this rally? Many probably assumed that the retail Robinhood traders who invaded the stock market this year have also found their way to trading crypto, and that’s probably a fair assessment.
But to sustain this type of a move, larger institutional players are necessary to ensure that demand never slackens, or else the volatility for which the pioneering cryptocurrency is infamous could come roaring back. Well, a reporter with Bloomberg who apparently set out to identify some of the big players in the market has made an interesting discovery: For years now, digital poker websites have been a constantly growing source of demand for the cryptocurrency, since customers often prefer to cash out in bitcoin, instead of USD, or some other currency.”
“…But as customers growing increasingly comfortable with bitcoin as a means of payment, they’re figuring out how to exploit many of the poker platforms’ policies for their own benefit. While Winning Poker Network tries to convert all bitcoin into fiat as quickly as possible, Nagy said, sometimes it gets “stuck” when bitcoin prices drop sharply. “When Bitcoin drops or does something significant, inevitably, we have people send us $100,000 or $200,000 in Bitcoin, because it’s the fastest way to liquidate it,” Nagy said. “And we are kind of stuck with it.””
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 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.
–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
January 11, 2021
Volatility Reports New Bull Markets
The primary markets are pivoting in the same time frame as MarketMap’s COT time window due this week.
A short recap for the US dollar is posting up a low. The flip side of that is the Euro is reversing and about to resume its downtrend. The US long bonds are posting up a low as well. As Volatility Reports pointed out in the December 30, 2020 Volatility Reports on the Bitcoin that:
“To bottom line it here, we have a fantasy lead blowoff top repeating itself here in late 2020 just weeks away from the date when the exact “soft aspect,” aka angles, set up for a peak on or about 1/14/2021. You will read shortly in MarketMap-2021 there is a nesting of change of trend data from many various and different mythologies occurring in mid-January +/- a week.”
It appears that the peak is attempting to set up where a decline past 33,000 is the next part of the puzzle, with the round number of $30,000 being a major break. Our trend-following and tidal wave cycles are still supportive of the bull for the time being. As always, we are not in a hurry or want bragging rights to call top tick. Rather, from a tactical perspective, then the set up is there for low-risk entry Volaltity Report for members only will alter members with a Hedge On Notice. The same pertains to all markets.
Like Bitcoin, the trend is up, which is clear in Crude Oil’s weekly and daily bars; on a trend following basis, there is no sign of a reversal yet. All three of the trend following indicators are up, and the tidal wave cycle is bullish, for now.
However, long time readers know that this advisor’s point of view is that the Oil industry is a dinosaur and is being replaced by alternatives. What is scary is that CNBC’s Crammer made the same assessment on Friday that I’ve been making since the July 2014 prediction of a collapse in oil prices. So forget the long term of Crude and related, it is only considered as an S-T trading market, full stop.
The TEM on all-time frames tells investors and trades that the crude oil is near a high pivot. The S-T hit a panic extreme, and the I-T hit an extreme that calls the trend old, feeble, and due for a change. The weekly bar is just sitting above I-T resistance, now support. So a break below 51.55 and 49.65 would signal a failure and a market reversal. I suspect that a decline in Cl will coincide with a rally in the long T-bonds. Any TEM background that supports an S-T trade-in wither direction will be posted here.
New Bull Market in Select Commidoty stocks and ETFs.
A new bull market has begun in the commodity universe. Bloomberg’s Commodity Index featured here has all the characteristics. Like all the new Green Energy stocks and ETFs on our monitor list, other raw material producers like BHP are on the watch list. Today the group, according to various indices, has made high pivots based on TEM readings. A peak will be confirmed with a move by DJP below 21.99 and or the Tidal Wave Trend following systems flips to the short side.
For now, it’s waiting and watching this sector.
Visitors at the “Volatility Reports” Group in LinkedIn need to opt-in as subscribers before their free look runs out.
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 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.
–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
January 11, 2021
MarketMap-2021 Issue#3 Donald J Trump the Force of Nature
At the start of 2018, this analyst – Contrary Thinker Saw -Trump as a Force of Nature
I pointed out rhetorically that, “It doesn’t get better than this: ‘Encouraged by the surprise electoral victory of President Donald Trump and his aggressive push for tax cuts and deregulation, the U.S. stock market ended the first-ever “perfect year.” That is, one in which all 12 months featured an advance for the S&P 500 index on a total-return basis.'”
I went on to say that,
“The market is good at discounting fiscal and monetary influences. However, over its history, it is not very good at anticipating Geopolitical events, and their effect.” To date, this is a fact, even though it’s been clear for a decade or more the bubbling civil discontent under society’s surface. Some of which came spewing out on January 6th with fascist rioters attacking the Capital.
In that January 18, 2018 MarketMap I alluded to the 45-year cycle to point out that,
January 6, 2021
Volatility Reports US Dollar 1/6/21
USD In the 12/14/20 update VR was expecting “one more decline to the low 90s. The market provided that and a little more. The signs of a major low setting up is the L-T condition of panic in the sell off over the last six months. Nine times out of ten a panic context is an event, not an ongoing condition. Yet the stock market during the February-Market decline in 2020 registered such extreme readings. In fact, on the weekly chart, the Dow remained in panic mode for four weeks into the “V” major low.
The weekly bar on the dollar index has reached an extreme of old age. A feeble yet persistent trend that is due for a change. In the current time from with prices being in a cluster of support for all time frames, the buck is on our watch list for more signs that a low is in the place.
The following chart shows the I-T tidal force system is short with the market oversold, being below its L-T moving average. Below the bar chart is our %BB oscillator on implied volatility providing signs of a move to the safety of the dollar.
Back Story is the broad and overwhelming consensus among the Bulls from Brokers in New York to the Mutual Fund Factories in Boston that rest on the demise of the dollar.
Contrary Thinker sees an inflationary bust and the preservation of wealth in the USA.
Membership includes “Market Map – 2021” and “Volatility Reports”
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 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.
–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
January 3, 2021
MarketMap-2021 Issue#2 Crying Wolf Don’t Think So
Focus the Decennial 100 (10-year x 10) Year Cycle
Cycles are as basic as Life itself. Life is the best teacher, so when the market does not learn a lesson, Life is right there to repeat it for all the participants to learn it again.
January 2, 2021
What Contrary Thinker Told its Membership
The One Factor that Trumps the New Market’s Giddiness
Published on: Jan 22, 2020: “All measures of market sentiment are at highs or extreme highs, from put/call ratios to CNN’s greed index, you name it. The outside world’s focus for this outright giddy disposition and talk of a potential “melt-up” in equity values focuses on the following four elements…” Read it here.
Set up by the mini Russell provides engagement today
Published on: Feb 18, 2020 “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.” See the charts here.
February 12 Historical Top
Published on: Feb 24, 2020 “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 bottom line is a decline in MarketMap’s next calendar COT date of March 9-10.” See the brief here.
There is no outside world, there are only people, a society, and the market
Published on: Feb 24, 2020 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. see the charts here.
The new decade of market timing is here after 13 years of being out of favor. Get ahead of the trends. It’s inexpensive to join and expensive to discard for any reason.
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
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
January 1, 2021
Trend Following is More Than Long-Term
On the shoulders of Richard Davoud Donchian
Most investors and traders reference Richard Dennis as the father of the Turtle school. While he certainly made it a household name, he was standing on the shoulders of Richard Davoud Donchian, who coined trend following a decade earlier. Today I have had the luxury of building on their working and advancing their rules to a modern-day knowledge base.
Please note from the get-go that the majority of market players attach the meaning of “trend following” to the long-term time frame for the multi-month time horizon investor. In reality, “trend following” is applied to any time frame. Put another way, trends exist for any size bar and for any time frame you want to trade. With that in mind, applying these guidelines is of a robust nature.
- It is not the percent win rate or the frequency of success that matters. The investor/trader needs to know the edge for every trade before he makes it. The point is the magnitude of success that is critical. The size of the potential opportunity is where the Contrary Thinker’s volatility model is used to predict the immediacy of the move and the size. That model is the Technical Event Matrix (TEM).
The old school suggests the calculation of the volatility of the instrument you are trading with the Average True Range. This technique is widely used and highly discounted. Very few people have the code to TEM, and only members have access to the plugins and their signals.
- You need to understand the concept of shorting. It would be best if you were not biased one way or the other on the market but be willing to play both sides as conditions dictate. I find the majority are phobic about the short side, something that one needs to get over if they want to achieve more than average returns.
- Stop worrying about how you enter a trade and focus on the exits; and keep it based on price, not money. Plan before entry where the market tells you the position is wrong and get out of the position. See the strategy page on our member’s blog for strategy exit ideas.
- If you want to make Turtle-type returns that are better than average (Alpha), you need to get comfortable with leverage and pyramiding winners. This is where TEM comes into play because it tells the investor when to expect a period of a forceful trend for the time frame he is trading. See the member’s only blog for the Turtle leveraging strategy for both scalpings to long term positions.
- The old school teaches you to vary your initial position size based on the volatility of the instrument. In contrast, sound risk management is low or no risk. So no matter how high the probability the precondition you only add after the position starts to work in the investors/trader’s favor.
- From a money risk point of view, risk no more than 2% of your account on a given trade is the standard rule of thumb. However, what is critical here is opportunity management before getting into the trade. Assuming it is 5 to 1 or better, you can be clipped four times in a row and hit in the fifth and still make money.
A new page that covers the entry and exit strategies page, based on charts and indicators, will be linked to this page shortly, showing how we control risk and maxes out opportunity.
- Be 100% price based, stay away from the evils of money, the being pulled around by your P&L if you can use a software program to test your strategies and systems. This will give you a better feel for the performance of your methodology.
- There is no fixed portfolio of markets or set account balance that you need to trade. Things change, risk change, and opportunities vary. Plus, each trader is different and should develop their plan according to their temperament and capitalization.
- Instead of watching TV to shape your trading decisions, use the price. Price is the purest form of information that the markets give.
- Remember that all content that is streaming in the public sphere is just that publicly available. There are several problems with it. It is a boom area for sales and marketing and a place for entry-level types to provide entry-level type advisory. Just like the financial news media, understand what it is, and stand above it. For the network news, their down-side is to get the insider interview they are used by the insider to make a market, and 90% plus of social media is inexperienced—a space I curate for a contrary indicator.
Contrary Thinking Starts Here
I put my name on my work and stand behind it
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
December 30, 2020
Volatility Reports 12/30/20 Bitcoin’s Cycle
The Bell Weather of the Equity Markets
The Bitcoin backers think anyone who does not believe in it just doesn’t get it—even after eleven years of experience, seeing it run from pennies to nearly $30,000, what’s not to believe.