JP Morgan Warns Trump Can Win
October 22, 2020
October 22, 2020
Art Merrill when I interviewed him for the MTA thought that I filled a vacuum left by legends like Bolton and Gould. At the time I only had a cursory knowledge of them and today I know Arthur was a very kind man.
But as a quiet achiever – today’s Contrary Thinker – I don’t miss much. It started in 1982 based on Joe Granville’s methods I nailed the low while Joe missed it. He reminded bearish, was just not using his own work. I ticked the major top in July 1987 protected my clients and got back in during the last quarter of that year while the household name whose method was used remained dogmatically bearish, go figure.
My methods are Short Volatility ETF’s, the tide has turned. A fresh sell short signal happened with a good record projecting a down market for the next six to eight weeks. Yes, short-short volatility! If you don’t understand, it’s not too late.
Here is what no one else is seeing. Long stocks based on “implied volatility,” mathematical formulas that value all put and call option into an index, and a futures market trading it. This CBOE index and the Volatility index futures became an ETF investment vehicle that is perpetually short the futures.
Because the Volatility Index has a downward bias – the stock market is almost always going up- therefore it is a synthetic price index of the S&P or the Dow, etc.
Well, I have called the trading range since the peak of January 28, 2018, the “bull market in fear.” It is not a slur on the Perma-Bulls doing their job. Rather, this short VIX ETF has not confirmed the peaks since early 2018, thus reflecting higher prices in perceived volatility or the fear index as it is called.
When the SVXY ETF is viewed through our Tidal Wave system the strategy is now on a new I-T sell signal (see chart). This system, when correct, is correct in a big way. How that a sell signal is in place, a move to the recent low and below the low side of S-T support at 36.13 should get carry over targeting to the first level of the I-T support zone at 30.31. That is a risk over the next six to eight weeks of 16%. An equal move by the Dow would be a target of 23,562.00
What is most important here is why a breakdown should pick up a following, because of the background dynamics. I did not show the weekly bar of SVXY but its TEM – our volatility model of the market dynamics- is signally an extremely tense background where frustrations will follow the direction that clearly shows its a pro-directional movement.
Another reason why from the January 2018 peak the great bull market ended and the bull market in fear began is the recent (first quarter of 2020) breakout by perceived volatility above its eight-year base. Following the breakout, the based was tested and the higher level of “fear” held, which is easy to see in Contrary Thinker’s featured chart. Furthermore, the smooth CMB index and the smooth RSI are both trending higher on our Anxiety index, suggesting that a reassertion of the first quarter spike of the market’s anxiety is imminent.
Bottom line, I-T bearish stocks worldwide, including Asia, I-T bearish bonds all ratings, bearish on gold/silver, bearish on crude oil, Bullish on the majority of commodities outside of carbon fuels, and bullish on the US dollar. Lastly, Contrary Thinker called the peak in the bitcoin and called its break and collapse to $4,000; and I earmarked it as a leader of risk assets leading the stock market lower. That relationship has changed, it is still a risk asset and will follow the equity markets lower. More on its expected FOMO peak shortly.
Sometime in the first quarter of 2021 will be a time to gather RS leading stocks and ETFs for a rally into April/Map. For complete details, if not a Contrary Thinker member, get your order in early for MarketMap 2021 Annual Scenario Planner, discount will end, and must be part of our LinkedIn group.
LinkedIn Group Vistors, we appreciate your taking the time to have a review of our work, I feel we should have impressed you positively over the last two to three months.
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JPMorgan’s Kolanovic Has Another Warning For Those Expecting A Crushing Biden Victory
Last week, we published an article detailing a warning from JPMorgan’s top quant Marko Kolanvoci to all those expecting a landslide Biden win (and by extension Blue Sweep) in which he showed the recent changes in voter registration data and their possible implication for state outcomes. In a nutshell, the JPM strategist found that there had been a sizable increase in Republican voter registrations in key battleground states compared to only modest increases in Democrat registrations…
The time is now. You know me, Contrary Thinket its Volatility Report, its MarketMaps-2020 and Algo Systems. All through the professional group network of LinkedIn.
LinkedIn Group Vistors, we appreciate your taking the time to have a review of our work, I feel we should have impressed yours positively over the last two to three months.
Take advantage of these prices available only to our network, become a Contrary Thinker today before your access runs out.
Great and Many Thanks
Jack F. Cahn, CMT
Contrary Thinker since 1989,
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
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