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    CT Journals

    Jack Cahn

December 5, 2022

Contrary Thinker Stock Watch

Contrary Thinker Stock Watch

Arlo Technologies is an American company that makes wireless surveillance cameras. Prior to an initial public offering (IPO) on the New York Stock Exchange in August 2018, Arlo was a brand of such products by Netgear, which retained majority control after the IPO.

CHPT ChargePoint Holdings Inc ChargePoint is an American electric vehicle infrastructure company based in Campbell, California. ChargePoint operates the largest online network of independently owned EV charging stations operating in 14 countries and makes the technology used in it.

COMB seeks to deliver a broad, diversified basket of commodities in an actively managed structure. … Utilizing a common structure in the commodity space, the fund’s futures exposure is held in a Cayman Islands subsidiary while the collateral is actively managed with investments in short-term US fixed income securities.

CTI BioPharma focuses on the acquisition, development and commercialization of therapies for blood-related cancers that offer unique benefits to patients.CTI develops novel therapies for patients with rare blood-related cancers by uncovering the underlying scientific drivers of their disease.

EVGO EVgo is an electric vehicle DC fast charging station network in the United States, with more than 850 charging locations as of August 2022

GRU provides exposure to the following grains: corn, wheat, soybeans, and soybean meal. The composition is determined annually and is announced in the fourth quarter of the current year. The Index Administrator selects commodities primarily on the liquidity and the value of the global production. Each component is rolled into the next available contract month in advance of the month in which expiration of the contract occurs. Although GRU is marketed under Elements brand, the ETN comes with credit risk tied to the Swedish Export Credit Corp.

Nokia Corporation is a Finnish multinational telecommunications, information technology, and consumer electronics corporation, established in 1865. Nokia’s main headquarters are in Espoo, Finland, in the greater Helsinki metropolitan area, but the company’s actual roots are in the Tampere region of Pirkanmaa.

LM Ericsson, commonly known as Ericsson, is a Swedish multinational networking and telecommunications company headquartered in Stockholm

Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft engineering and design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron small orbital launch vehicles and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. The company was founded in 2006 and is headquartered in Long Beach, California.

Talon Metals Corp. is a British Virgin Islands-based mineral exploration company Nickel Copper Cobalt Talon Metals Corp. is a TSX-listed base metals company in a joint venture with Rio Tinto on the high-grade tamarack nickel, copper, and cobalt projects located in the State of Minnesota, the United States. The Company focuses on exploration and mine management team. Talon Metals produces nickel within the United States for use in batteries in electric vehicles.

ZS is a management consulting and technology firm focused on transforming global healthcare and beyond. We leverage our leading-edge analytics, plus the power of data, science and products to help our clients make more intelligent decisions, deliver innovative solutions and improve outcomes for all.

December 5, 2022

%BB-SVOL Oscillator

CT BB-SVOL
November 29, 2022

Blog for the week

PDF to Blog 12-5-22
November 21, 2022

Volatility Reports November 21, 2022

VIX data does not suggest the daily wide swings in the stock market. Over the last 30 days, S&P 500’s minimum gain on an up day is 2% (rounded).

What the data reflects is more precise than the widely used put/call ratio. Today that statistic is just not a bear/bull ratio because there can be calls on leveraged bear (short) ETFs. Even if they have made changes in the ratio calculation, it is thought to reflect the mentality of risk-averse risk-takers compared to futures traders, as such it is the little guy that is assumed to be dumb money.

Well, the data used in Contrary Thinker’s fear and greed oscillator is more than the current perception of risk in the stock market today, looking out at various lengths. We also use the UVXY and others, which is a portfolio of S-T volatility futures. UVXY is ProShares Ultra VIX Short Term Futures ETF, long volatility futures. For a hedge fund, the cost of carrying a hedge is the value of that portfolio decreasing.

From an Alpha-achieving point of view, it is the process of moving to long volatility, that achieves Alpha, not the longer term carrying the position. The index has a slow-down trending bias because the stock market is known to be bullish most of the time. However, the index spikes to higher levels. Today the low 20% range suggests these investors see little risk of a volatility breakout. So, on the other hand an uptrend in the index is more like a spike leading the stock market. Back when Covid19 made the mainstream media the index spike to over .85.

With that in mind, a bear market always has

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November 14, 2022

MarketMap™ November 14, 2022

“The US Securities and Exchange Commission and the Justice Department now investigating, remains of FTX “

Bill Clinton’s Treasury Secretary Larry Summers making Enron comparisons
Back Story Contagion from the Crypto

THE WOLF STREET REPORT: Where’s the Contagion from the Crypto Implosion?

 

Here is a sample of the headlines.

The fix is in, there is only one Intermarket relationship that matters to the bulls and that is the USD against the world equity markets. While all eyes are on the dollar staying below its breakdown point, other relationships are being overlooked by the majority. For example, the inversion of long-term rates with the shorter-term.

Their study of the dollar relations is cited at best, looking back at 2017 as their model that says “when the bastion of safety is down” its risk on for stocks. Their research is front-end loaded. They forget the dollar bear in 2008 along with the world financial crisis or the dollar bull during the neo-liberal Clinton stock bull market.

Inter-market relationships, come and go. But this one has set up an influx of a liquidity pool for the smart money and big money to sell into.

So the news is good, inflation is under control, the Feds are going to pivot, and the dollar is “risk on.”  Now it is all clear, the game is the bulls to lose. They have all the analogies backing them up. They even pulled out the old Philly A’s trick, because if the Phillies had won the world series it would be a bearish omen, dead set. But they did not mention that an original NFL team, the LA Rams, won the Super Bowl as crème de la crème of bullish analogs. I guess they remembered the G-men beat the Pats in 2008, a nasty exception.

So what can go wrong?  “All you need to know. $UUP $DXY $USD” if you listen to the public stream?

“…One of the biggest developments this week was the breakdown in the US Dollar. The US Dollar Index dropped 4% this week, marking the worst week since 2009… that broke the uptrend line that has been in place for the majority of 2022. The strength in the US Dollar has been putting pressure on stocks and risk assets all year, so this is exactly what the bulls have been waiting for. “

Here is CT’s chart of the US dollar index showing the ruler trend line everyone is excited about its break. However, the long-term and intermediate-term trends are up; and the best the bulls can hope for in the “USD indicator vacuum” is a high-level trading range from 104 to 114.

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November 9, 2022

Volatility Reports November 9, 2022

“Time changes everything except something human which is always surprised by change”

Since the correlation has caused a big stir in the financial networks, everyone sees the 1-to-1 relationship between the USD and the ten-year notes as having a negative relationship with all risky investments. After one fella about creamed in his pants with the excitement regarding the discovery and the desire to go back to 2017 the question remains “what are they going to do and how are they going to know when it changes?

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October 31, 2022

Volatility Reports October 31, 2022

All the talk is about the profit season from now until the end of May, before summer vacation. Hence the cliche is to sell stocks in May and buy them back in October.

My system development firm Thinking Man’s Trader (TMT) programmed that idea and tested it and since the 1920s on the Dow, it works. The drawdowns are larger than most want to endure, but in general, it works.

Be that as it may, here is a small sampling of the content regarding this seasonal factor.

“The next six months have been higher 18 of the past 18 times during a midterm year. Yes, things have been tough this year so far, but be open to better times. What happened in the rearview mirror doesn’t mean it’ll happen again.”  From a broker that appears on CNBC.

“Of the 11 S&P 500 Sectors. 8 are now above their June lows. ” From a CPA?

“This is the 4th time in 2022 that $SPX rallied 7% or more in only 9 sessions. How are we feeling about this one? 4th time the charm?”  A CMT.

$SPY $IWM +8% this month”  from a CFA chasing the equity curve. 

We’re at a point in the calendar where $SPX returns tend to have a clear upward bias, but that bias is further enhanced when sentiment is overly bearish. One of the risks is that offsides positioning develops into FOMO as the year draws to a close.”  A Research Firm

The sentiment remains bullish and bearish on bonds and not much talk about commodities.

Well chatting with a number of bulls in the public space they all believe that the market has experienced a bear market, which is over. While my expectation is the bear is not over but thus far, it has not been confirmed. Like everything that makes TMA rough for the many, by the price and time comes that the bear is confirmed, it will be too late for the perma-bulls.

I put it this way, “From the ATH the decline has only been a correction, not a bear market. There is more to a bear than a 21% decline with the average time from high to low. The nature of a bear is very clear and undeniable, and what has unfolded thus far is not a bear market, maybe the bull’s egos are a little touchy. They are certainly defensive worrying about their jobs. But so far, not a bear market, it is a ‘bull market in fear.'”

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October 24, 2022

MarketMap™ 2022- Scenario Planner Issue#22

The social media mob is really perky after last week’s performance.

With the majority of commentaries that cross my desk, it’s clear most are moving away from doubt and have bought into the annual seasonal kick-off of a bull market that makes an average of 17% in mid-term election years, from the October low.

Comments range from off-the-seat-of-the-pants use of DMAs, “Highest close for the S&P 500 in two weeks, and just above the 30-day moving average.” Well at least he is unique, I hope he is not back-fitting.

“Positive RSI Divergence on WEEKLY SPX Chart = Bullish – This positive divergence has historically preceded meaningful $SPX reversals”

The problem is his scope is only from 2009 and RSI does not work that way. A deep oversold is a confirmation of a bear and because of its extreme oversold, each subsequent new low is expected to diverge. Hence making that concept (bullish divergence) useless and the most common weakness cited by experienced professionals.

Another bullish twist comes from a good source of market data and information. However, information should not get confused with knowledge and wisdom; and I am afraid to say their analysis.

The Stock Traders Almanac annual book (2023 version is on the market, $100 +/-) is a handy reference tool.  The owner publishes bits in the social sphere like the table inserted below.  The publisher points out that of all the months of the year, October stands alone, since WW2 as the seasonal bear market ender. In other words, that time window starts more bull markets compared to any other month. Can’t argue with that.

But what you find in almost everything you read regarding market data and market analysis is the unwavering bullish tone. Here is what I mean,

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October 13, 2022

MarketMap™ 2022- Scenario Planner Issue#21

Nature of a bear market

“…good news is ignored, and bad news is exaggerated.”

After a top is in place there is indifference reflected by the public and media.  Buy dips are programmed into behavior. However, with the smart money, the early adopter uses the mass of new entrants for liquidity to sell into.  As the decline starts to pick up steam, the late majority average down their cost by buying more. The good news stops getting positive follow-through in higher prices because demand is overcome by supply. Good news leads to prices going lower and bad news accelerates the downtrend.

The structure of the bear is complete with its own forms and patterns, like one-day wonder advances: sharp and short-lived reversals that live for one to three days.

Fake news begins to propagate making headlines. Add to that all of the misdeeds, scandals and reckless speculation, and corrupt biz practices of the past upcycle come to light.

The overall mood of the unreflective

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October 10, 2022

MarketMap™ 2022- Scenario Planner Issue#20

The “Time Factor”

Patterns and certain regularities are revealing themselves in the US markets. “Volatility Reports” posted in our LI Group demonstrated the 6.5-week cycle, and how it nailed the low on September 30, the day of the closing low thus far for the Dow but the Nasdaq made a new two-year low today.

A subcycle of that dominant cycle, 1/8 of it made the S-T top 6 days later on October 5. The chart of the small-cap index on the left has the lunar cycles noted with green dots for the high tide and red dots for cycle low. There is no claim to efficacy at pining down the precise high or low pivots but it does a 50/50 job providing a near-term idea for a change of trend. Moreover, when the high or low cycle is inverted, that failure itself is notable.

Two rules:

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