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August 26, 2022

“Ninety Nine Cents Won’t get you into NYC…”

“…it takes a Dollar.”  The freedom dollar.

Fourteen years after the secular low, nearly everyone is stuck in the noughties and in love with the one-way traffic of 2017.  They – bulls without fear – have taken hook line and sinker the green back’s market relationships as the king of all fiat currencies will be superseded by digital tokens, gold/silver, that inflation will benefit the Euro and other currencies like the emerging market currencies as well as the world equity markets.

This mob cares little about the dollars buying power, I mean who would? Seriously, when you can invest in risk assets? Old money perhaps, smart money maybe, you think?

The various backstories are interesting. The long-term dollar bulls see the international flow of funds exiting offshore looking for economic strength in the USA relative to the weakness of the EU, China, and PacRim. More so they see Europe as ground zero for the fascist-populist revolt with an insurrection wave headed at central bank leadership.

As stated previously, to the chagrin of a few, the economy competes with the stock market for the same dollar. Today we are witnessing a real economic expansion not just a “paper chase.” The international flow of funds will favor the US and its new fiscal policy and its Regime change from a top-down to middle-out economic policy out of DC, which will sustain.

Why? Because youth will be served.

Moreover, the Euro and the EU are a confederation of countries banded by common values and objectives but separated by different languages and cultures. If you think the State systems in the USA are perplexing,  do some comparative work between Poland and Spain, Etc.

The above chart is super bullish based on the “rule of alternation,” which says in EWT that corrective patterns of the same degree have to be different. In general, in life, this rule applies in that the most recent battle will be different from the one before it. In 2007-08 the bears expected a reply of 2001-03, it was too fresh. Today the bears think in terms of the 2007-09 stock market experience, it will be different compared to that most recent history.

In the above chart, the corrections from points [1] to [2] compared to the correction from points (1) to (2) are the same, they are flat ranges. Hence the second correction must be of a lower degree setting up a massive third wave advance in a new secular bull market in the not too distant future.

So the current rally from just below 90 – from point (2) – is a short-term wave 1 that is still unfolding with a break above 110 likely. As stated and well-known among traders, a break of round numbers in virgin territory typically leads to more trends in the same direction.

The chart-window on the right shows the wave count of the dollar setting up for at least one more run to new highs in wave “v.” The chart on the left shows the market in Short-Term resistance and just below I-T resistance, the latter running from 109 to 111.10.  The rally from 105 was supported by TE#2 and has reached a new TE#3, slowing the advance down.

Rule #3 calls the trend old, low energy but persistent. While due for a change, the uptrend could persist.  The monthly and weekly chart (not shown) supports a more persistent trend.

On a short-term basis, either the market is going to “persist” through 110 into a COT due early next week or consolidate between the 104 to 109 level until TEM sets up for a more dynamic move higher, and the COT becomes low. For the FX market, the number of soft cycle changes that are due in early September suggests more rally from here into 9/3/22.

From a trading point of view, I see nothing to trade until the Dollar makes an S-T top, the USD/JPY still looks bullish as well.  The Aussie dollar may finish out an ending wedge for a nice counter-trend rally. At this point, it’s waiting to see. However, the risk markets are looking vulnerable, because that group does not like the dollar at higher levels.

 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2022

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

 

 

 

 

 

August 7, 2022

Volatility Reports 8/8/22 Harbinger of Things to Come

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” George Soros

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March 28, 2022

Volatility Reports 3/28/22 “The Bust”

How can something come from nothing? Or what happens when a one billion dollar industry goes bust?

The Dot.Com Industry did it, 22 1/2 years ago when that industry chased up the advertising cost on the SuperBowl broadcast to make a “brand” for themselves. All of that led to a bust.

The dot-com bubble was a rapid rise in U.S. technology stock equity valuations fueled by investments in Internet-based companies in the late 1990s. The value of equity markets grew exponentially during the dot-com bubble, with the Nasdaq rising from under 1,000 to more than 5,000 between 1995 and 2000. Today the Crypto Industry has done the same thing and worse it has produced an industry with no economic benefit and produce what they call an asset – something with value – out of thin air.

Blockchain technology is not revolutionary and disruptive except in the sense that it has taken to a whole new level the gullibility of just not the public but the professionals that have fallen in behind it. This new industry is nothing more than a meaningless marketing term representing an overhyped concept.

Unlike the smartphone and other high-tech gadgets, the world of crypto is living on a dream on the left-hand side of “the chasm.”  There are many reasons why they will call fall into the chasm. One is volatility which makes it impossible to regard Bitcoin and other cryptocurrencies as useful for anything other than speculation. NOT a replacement for a fiat currency as they have promoted from day one.

Besides being too changeable that the merchant would have to have such a wide bid to offer spread to cover their risk the market will not accept it until it becomes STABLE, which is not going to happen, until after the crash, when markets go flat after a dead cat bounce.

Furthermore, the big tout was limited supply vs the worldwide float of fiat currencies. Two key problems with that are the crypto factories do not have the full faith and taxing power of a government to back up their so-called coins. Plus there is no limited supply as there are opportunists every day making these things out of thin air to the extent that there are more than 10,000 cryptocurrencies in existence, and more coming every day.

All over social media and financial news, they are throwing around the idea of contrarian like it’s so easy to be one, while the bullish following on BTC&Co is cult-like and they are holding on for dear life, either to the pseudo investment or to their opinion.

All the “line drawers” that call themselves analysis in the Tweetershphere are rabid about a breakout they see in this market. Rather, the breakout is a little post triangle break that is finishing a simple correction retracing a Fibonacci 38% of the decline.

What is keen about the advance is the time factor is for a reversal today and for cycles to pull the market lower into a minor low mid to late April. 

It’s a phenomenon I have seen since the gold and oil boom in the early 80s and investors and traders – after they crashed – were still holding on and wanted to buy more twenty years later. At the beginning of the 1980s, inflation was a “way of life” and was never going to go away, never.  How the long cycles impact the markets. Today the crypto cult is even ignoring the downtrend and the underlying facts that they are actions are based on greed, and nothing rational.

The bigger problem is what happens when a billion-dollar industry goes bust?

“…both fiscal and monetary policy has painted America’s economy into a corner, a corner that has no alternatives that are positive to bail out the market and the economy when the next down cycle occurs.”  There will be no soft landing. 

So the cycles from the 2020 crash are now translated out a few years, they kicked the can down the road. But the Fed seems determined to bring things “back to normal.” Yet everyone knows that the market does not care about that. Crammer confirm that on his CNBC

I just watched a 3-minute video of a Crammer rant self-contradicting himself along the way and he’s happy with the bear market being over and what everyone is focused on “greed”.

From Covid19 in China, the Fed’s more hawkish rate policy, the price of oil, and the rate of inflation plus the war in Ukraine. The Russian threat of escalation. But the market since the invasion started on the 24th of February does not care.

So what are we missing? BTC&Co going bust.

Key stocks on the monitor list as leading indicators of the industry getting ready to puke are

The key market players are listed in the report with their revenues, sales, and strategies are Advanced Micro Devices Inc., NVIDIA Corporation,  Intel Corporation, Microsoft Corporation, Coinbase Ltd.

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Country Thinking is about letting go of traditional ways of thinking, the commonplace that no longer serves you well in investing and trading. Building from the truth, from first principles the robust into anti-fragile. Thanks in advance for your consideration, I look ahead to working with you for the duration.

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

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