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    CT Journals

    Jack Cahn

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).Visitor’s Lowest Price Offer

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July 16, 2021

Chance favors the collective mind

Why Join Contrary Thinker?

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 Contrary Thinker membership. Check them out here. 

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
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

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.

Previously the following chart has been used to point out that the pros, the smart money see tail risk – which is hyper-deflation or hyper-inflation. That must see a catalyst that would cause such an extreme, as drought causing hyperinflation. The chart data on the right is making all-time historical highs along with the data from the CBOE, both suggest protecting your risk investments.

Meanwhile, the advisors to the public, many of them compete with my publications are extremely bullish. Above levels seen before the 87 crash, the dot-com peak and the 08 WFC, and others.

Investors chasing yield in junk bonds have reached an extreme of greedy action. A sign of irrational buying that is associated with major turning points. The chart used here from CNN reflects that fact. 

On top of extreme sentiment supporting the bearish expectation of a topping process is the internals of the market have providing”off risk” signals.

The 52 weak highs MA10 peaked with the initial high by the Dow & Co back in May as this featured chart clearly shows. As well as the last two peaks preceding tradable top s of the major averages.

Our “Churn and Burn” index provided Contrary Thinkers with an “off risk” warning back in March of this year and as the title implies the market has churned under the annual highs of the Dow, highlighted by the blue dots on the chart. From the most recent breakdown by the index in May and three days ago, the market has been laboring.

MarketMap High Lighting Change

When cycles have discovered that track the market’s oscillations when the data is outside the market and outside any related news you would hear or read on Fox Business or CNBC.

The following chart is based on the geo-cosmic cycle, which is part of the January Fractal membership have access at the beginning of each year.  Here however I wanted to demonstrate how it stands along provides a “ball park time window when the market is expected to make a change of trend (COT).

Below are two cross-check charts starting with the 2009 low, and the 13-year cycles. The problem with many is they may be looking for 100% bottom picking and top picking ability. Where it a matter of evidence that supports the COT from different methods; and July 12-14 is a good example. A time window associated with extreme optimism as pointed out above along with other facts.

In any event, it’s fairly easy to see how the Geo-Cosmic oscillator’s turn dates line up near the COT dates of the Dow. Imparticuallry is the high pivot in late 2015 on the Geo-cosmic date of 7/4/2015, six years from our real-time window today. Plus it was followed by a meaningful trading market where our scalping systems and long VX system were put in their environment.

 Please note the same coincidence in changes in the direction of the market near the Geo-Cosmic peak and throe dates. What is more striking is the 3/9/20 low, the November 9/20 low, and the high dated 5/13/21 that happened when the Dow and offshore major indices made ATHs. p.s. There is no such thing as a “coincident.” 

Trade-Ideas

Buy FAZ at $27.75 or better  PT = $38.5 SL = $25.5 
Contrary Thinker sees a good chance of the high-risk players getting clipped here. The Bull ETF we want to play the bear side of invests at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index. Other leading high beta indices have rolled over and are trending lower. FAZ is the bear trade with 35% S-T potential and 7% risk.  FAZ is 3X Shares seek daily investment results,  300% of the inverse (or opposite), of the performance of the Russell 1000® Financial Services Index.

Direction Neutral Thinking

A concept that for many is difficult and some may see as racially based on old habits. But the market’s background, its condition is not its direction, it is how the market is trading, is it flat and sloppy, is it choppy and range-bound, is it expanding its range or is it pro-directional trending; and has that condition reached an extreme and ready for a change to something else?  It’s a powerful concept once you “get it” and it provides better risk and opportunity assessments, as well.

Back in mid-June, I reported the expectation for lower prices into the end of July, and “thus far, the action has been bearish; the Cash S&P has traced out a clear five waves down with a clearly defined 4th wave triangle, which is now forming resistance (highlighted in blue.)”

The chart on the left presented TEM signaling a rule#2 predicting a strong trend after the next trend-following or breakout trigger. Well, CT’s bias was not placated. Instead, the S&P broke out and ran to new ATHs.

I think this will provide a better understanding of the Volatility modeling I do. In that vein, the daily TEM is on a new extreme rule #3, painting the S&P’s trend as being old, feeble, persistent but due for a change.

Chance favors the Collective Mind
Here is one way to access the group, the “Volatility Reports” newsletter and MarketMap-2021 Scenario Planner, Blog access, LinkedIn private group access plus eBook on major cycles 2021-2022, and more for one low price without long-term commitments. 

Plus all of our trade ideas.

Copyright 1989-2021
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 8006183820 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.

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.

Yes, he is truly one of my heroes; someone I have met publically says he is buying the coin. I have heard all his calls going back to the 1980s, like the passive short on a head and shoulders on the Swiss franc, which was a disaster.  Like I have said before, I never take his public ideas seriously, only his methods, which I have studied.

The BTC was an s dream come true, turning pennies into thousands, and sure if it happened recently, it can happen again if it was just that easy.

The public seems to be an enthusiastic buyer, so the “pool” of liquidity is set up will buy dips, and TPJ will be a seller and a short seller.

At the peak in April 2021, Contrary Thinker was unequivocal when I said ”

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.” With follow up headlines on 4/26/21:

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

Today the hammer is about to fall. Here July 8, 2021, the picture looks like the other shoe is about to drop.

The weekly chart on the left is used alongside its data window so traders can see the support price levels below the close on Wednesday. After being turned away from the Gann descending trend line, prices are testing the high side of Long Term Support. One can see the sequence of levels that would act as a set of dominos with the ultimate target of the high teens, just under $20,000, where the panic buying started.  From our point of view, that price would only be a temporary support level, if at all.

The volatility model – TEM- the I-T with a monthly outlook is working on TE#2, which supports more trends. Furthermore, the S-T chart, the daily bar, is on a new TE#2, with %C spiking it too calls for a pro-directional move. Hence, once they begin to fall, the dominoes mentioned above should pick up the rate of change until there is a new event generated by TEM.

I understand how some advisors, capital managers, and investors may become “spooked” when Astrology is used in anything. They relate that discipline to Sunday’s paper with the sun sign forecast for the week or their wife’s copy of Vanity Fair, where she tells you how good or bad a month she is expecting based on her reading.  Well, I understand, and nothing is as simple as looking at Sun signs.

What has been uncovered are correlations between certain astrological and astronomic events and market activity. Bitcoin is a good example of a dream come true for the few who own it for pennies. However, once you put aside the greed such a dream evokes, there are no rational reasons behind its explosive advance. Rather it’s been a ghost of a reason that can be seen when the Neptune is known for its hallucinatory effect. The following chart pointed to periods when Neptune was in direct motion fostering the illusion of Bitcoin.

I also highlighted when Neptune goes in retrograde, a period when the illusions are stripped away, and reality becomes clear. These periods have helped provide clear reasons to get out of the “risk assets.” when Mercury – the great communicator – is in aspect to Neptune, as the current situation. It is the same as October/November 2018 for the collapse to $4,000.

The bottom line is if you have the capital to short the futures, that is the play. Last I heard, the margin is the same as the market value. So not much leverage there.

p.s. the peak in mid-April is foreshadowing the decline in the US stock markets.

Back Story

Fed Chair Powell: ‘Crypto is substitute for gold not U.S. dollar’

Click here to view original web page at Fed Chair Powell: ‘Crypto is substitute for gold not U.S. dollar’

(Kitco News) – Leading global central banks, including the Federal Reserve, said that they are not threatened by the growing advancement of digital currencies and stable coins.

Monday, speaking in a panel discussion at the Bank for International Settlements (BIS) Innovation Summit, Federal Reserve Chair Jerome Powell dismissed bitcoin‘s role as a global currency, saying that it is too volatile for consumers.

Powell described bitcoin as a speculative asset that is not backed by anything.

“Crypto assets are highly volatile and therefore not useful as a store of value,” he said. “It is a speculative asset that is essentially a substitute for gold rather than for the dollar.”

Great and Many Thanks,

Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
Copyright 1989-2020

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 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 to your financial situation. Use only risk capital when trading futures or options.

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.

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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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June 18, 2021

Volatility Reports 6/18/21

If you are not paying attention to Volatility Reports, you might be SKEWED.

SKEW is similar to the VIX index, but instead of measuring implied volatility based on a normal distribution, it measures an implied risk of future returns, realizing outlier behavior. The index model defines an outlier as two or more standard deviations below the mean, characterizing a black swan event or market crash. The index value typically reflects the trading activity of portfolio managers hedging tail risk with options to protect portfolios from a large, sudden decline in the market. A SKEW value of 100 indicates the options market perceives a low risk of outlier returns; values increasing above 100 reflect an increased risk perception for future outlier event(s).

The featured chart shows that the SKEW data viewed through the %BB-Oscillator is at historical highs. A reading that the big boys with their ear to the ground hear the train coming. They expect an event and a large and or prolonged negative reaction to the event. It may be a black swan; it may be something so overlooked that no one believed it pushed the market over the trend following the cliff.

According to the MarketMap-2021 cycles, that change is changing the trend from sideways to down, and a final peak in the NASDAQ 100.

In opposition to the pros, the retail trader has no fear, not a thing to worry about. The economy is coming back, inflation is only transient, and fiscal spending is a boom for real growth and GNP, therefore a boom for the market. The Dow has declined 3.5%, and the %BB-VIX has nearly moved, as seen in the left-hand window in the following chart.

Our friends at the chart factory SentimenTrader pointed out the same emotional background as the VX data above. He points out that it seems as if there are “…no worries whatsoever from the numbers.” 

As the chart describes over the last 12 months, the few minor selloffs could only their sentiment indicator to 18%, which, based on their methods, is not the pessimistic territory. But what provides iron-clad evidence is no core indicator that makes up the composite showing pessimism over the past week. From a Contrary Thinker point of view, that’s not bullish, my friend.

With my Market Map-2021 COTs hitting on Monday, as pointed out last Friday, the call was for lower prices into the end of July. Thus far, the action has been bearish; the Cash S&P has traced out a clear five waves down with a clearly defined 4th wave triangle, which is not forming resistance (highlighted in blue.)

The left window is the daily bar showing where S-T support is and where breaks would call the market lower. TEM is on rule#2, supporting a trending condition.

Here is one way to access the group, the “Volatility Reports” newsletter and MarketMap-2021 Scenario, planner. 

Copyright 1989-2021
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 8006183820 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.

June 15, 2021

Volatility Reports Bonds 6/15/2021

“I used to think that if there was reincarnation, I wanted to come back as the President or the Pope, or as a . 400 baseball hitter. But now I would like to come back as the bond market” James Carville

In the previous group post and blog post, I pointed out how interest rate cycles are regular and reliable. I pointed out as well that the fear that rates are moving higher had not abated since the initial run higher and that implied fear data reveals a coiling up of the data denoting frustration and confusion by the market regarding the viability of inflation.

Our model suggested a rapid and sudden movement in this data, and while I pointed out that “Volatility modeling is direction neutral, it tells the investor/trader, in this case, to trade the break, to trade the trend following signals. As noted above, TY rates have given a bullish signal on the rates.”

In our LinkedIn Group, I said ” TY is in a cluster of resistance as mentioned previously in this space. The 132.68 price if broken is a reversal trigger until the last Friday of June. Contrary Thinker’s bias is bearish for reasons outlined before and suggests TYO or shorting the nearby futures.

The market after implied volatility spiked lower ending its counter-trend of complacency, the government bonds sold off and the ten-year notes broke below 132.20, the low side of I-T (monthly) resistance, a failure sell signal.

In the Chart Gallery below the first chart shows clearly the drain of liquidity according to the Fed, and that drain is from the reopening of the REAL economy, inflation caused by none monetary reasons, like supply chain problems and drought.

The next three charts in the Gallery are about commodity-based inflation, which the majority believe what the Fed has said is “temporary.” Contrary Thinker is bullish on commodities from the March 2020 low.

CT’s chart of the 30-year T-bonds shows a massive failure. The 4 1/2 year cycle that has been posting up timely cycle lows has failed to do so with the last sequence of bottoms expected in early 2020 that produced a one-week wonder followed by a bear market. This left-hand translated cycle points to the next low series of S-T lows at the end of July, mid-October, and early December of this year.

The market has moved below its long-term moving averages and the pair of MAs have made a death cross, calling for more downtrend.  Long Term support sones in from 134 to 147^19.

Trade Idea

Suggested trade TMVDirexion Daily 20+ Year Treasury Bear 3x Shares. Buy TMV at 71 ob, stop 66 with a profit target of 120, the low side of L-T resistance. I-T Volatility model is a fresh TE#2 supporting a forceful trend.

Stop, listen and learn. Don’t let time get by you.

The “time factor” provided in MarketMap™ will be critical to keeping you and your clients on the front foot. The New Era of Market Timing is Here. Get the full picture with this 45 day trial with CT’s eBook of cycles.  

Chart Gallery Reflecting Pressure for Higher interest Rates. Bond Buyers will Demand 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

June 14, 2021

MarketMap Issue#11

Jackson’s War on the Banks, the Panic of 1837 how it relates with today

The Panic of 1837 was a financial crisis in the United States that touched off a major depression, which lasted until the mid-1840s. Profits, prices, and wages went down; unemployment went up, and pessimism abounded.

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June 10, 2021

Volatility Reports 6/10/21

Major Change of Trend (COT) Time Window June 11 +/-2 days

COT’s are price and time-based events that apply to all markets; hence investors and traders should expect “hyper-correlation.” The outside world event may be dramatic and out of the blue, what the media calls Technical.

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