CT Journals
MarketMap
July 28, 2022
Bear Market Historical Chart Gallery
The Nature of Bear Market, Panics, and Long Bar Days
When it comes to what a bear market is investors and traders don’t hear much. They may read that a decline of 20% puts the market in the bear market territory. but that is about it.
Professional advisors, managers, and traders need to know the signs of a major peak, and the personality of the decline as it goes through its phases. We need to know what to expect, how to differentiate early between a bear and a correction, where panics fit in with the long-term decline and all bear markets don’t look like 1937.
Here is a chart gallery of bear markets from the 1929 event to date. Analysis of each chart to follow with an excel file download containing all the data for bulls and bears from 1900 to date.
If you are not a Contrary Thinker, here is your chance to access this report and chart gallery, the excel file, and six months of membership which includes MarketMap™ -2023 and all issues of MarketMap™ -2022 to catch you up in one fell swoop.
Chart Gallery Below
July 11, 2022
MarketMap-2022 Issue #15 Scenario Planner
A falling S&P compared to declining fear of risk is cognitive dissonance.
Therefore, when sensory overload hits with the sudden realization
that accounts are underwater panic selling will follow.
Hard and fast rules based on success and failure
Two related topics that I want to touch on here. One is the rule that there is nothing more effective to capitalize on is an entry signal that fails. The below screen capture depicts several examples of that hard and fast rule. Any reliable system can be used. Here it is buying low tide (red dot) and flipping to sell and sell short high tide (high dot.)
It’s easy to see the failure coming off the high pivot on April 13. Taking out the cycle low was a trigger point propelling prices lower. Given the downtrend, the low tides have provided nice reversal points as the same event hit in May. The most recent low tide was more of a wipe saw, but they held. The most recent series of tidal highs have been on the money.
The high pivot on June 28 was more than a high tide, it was also a combination of geo-cosmic events, of which there are more on the way this second week of July, more on that below. So based on this logic, the late June high is important on a Short-Term basis.
May 30, 2022
MarketMap #13
Ignore at your own risk, I could not be more serious in the conclusions of my research
Pulling money out of risk and putting it into short-term savings for the next few months to see how it goes is worth a “little embarrassment” if the Contrary Thinker’s advice is wrong.
P.S the risk of a missed opportunity is a false equivalent for proper risk management.
Eight Weeks Down According to History the Market is Bearish
Aniversary Dates
May 6, 2022
MarketMap-2022 The Scenario Planner
The GOP is CRAZY! and the Dems are a pack of limp wrist Betas
This lack of civility and the widening gap in American political norms hangs like the sword of Damocles over the markets and our way of governance.
In the market map issue #3 which was published in mid-January of 2022, we pointed out that when the Dow made seasonal peaks between the December 11th and January 15th bracket it had similar outcomes in terms of market behavior. We pointed out that during that 12-month period following the peaks the market behavior – the scenario of the market – was remarkably similar to each other from high pivot to selling panic and from the top to the ultimate low. In the three market parallels used here, there is a strong sell-off in May and June with an ultimate panic low in mid-October. That low in the fall of the year is associated with a national security event.
We also pointed out that those three tops were followed by national security threats that the market did not know how to deal when the events happened. And that this seasonal top pattern was a twofold caliber because there was an event in October of the year of the December-January peaks and there was another national security event that put pressure on the markets in the following year between August and October.
While there were other examples historically, we focused on the modern events that traders, analysts, and advisers could relate to and they are 1961, 1973, and 2000. If you refer to the COT (change of trend table) you’ll see that we highlight anniversary dates that occurred in these three parallel seasons. The 2018 experience was very close to meeting the seasonal envelope projected but its top was outside the bracket on 1/26/18.
Contrary Thinker sees the pattern being significant in 2022 based on its own history and other unrelated methods that suggest the same scenario. So, we’ll take a look at each in some detail.
In 1962 there was a high rate of change sell-off in May and June with a mini panic low on May 28th, 1962, and again on June 22nd. These two-anniversary dates are on the near-term horizon and today’s expectation is for the market to be 25% lower from here and enter a panic condition. Traders should be looking for we should be looking for those long bar days from opening high to closing low on those days exceeding 4% to 5% which on the Dow is about 1500 to 2000 points.
Next week the current tidal cycle opens up the likelihood of such long bar days to begin.
The form the markets are likely to take is a 1930s type trading market where in effect you have big swings going down 70% and then bouncing back 50%. These big swings will be great for good market timers. There are a number of reasons for this scenario, but one is clear and loop side. That is after 21 years of buying the dips and holding long stocks for the great bull market where market timing became a nonexistent thing with few knowing really how it works, the next ten to twenty years will be dominated by this group of specialists.
Alternately if the market turns out to be like the nifty 50 peaks in January of 1973 followed by the worst bear market since the Great Depression um at the time that bear market was one of the dullest low volatility declines in history and only had one countertrend rally at the end of eight months of 20%. Otherwise, it was really a dull decline we don’t think that’s going to be the case looking forward, because we’ve just exited a decade of very low volatility conditions, especially in 2017.
But I want you to pay attention to the key conclusions here of the December 14th through January 15th tops in that from those highs you can count
May 1, 2022
MarketMap #12 Sample
“Down cycles are not fun. But they form the basis for enormous future profitability.” – Steven A. Schwarzman.
Hey Steve, What a ton of drivel.
Published on: May 1, 2022
If you never heard of this fella, here is a thumbnail: Stephen Allen Schwarzman is an American billionaire businessman and philanthropist. He is the chairman and CEO of The Blackstone Group, a global private equity firm he established in 1985 with the former chairman and CEO of Lehman Brothers.
It’s clear the majority will agree with him because they have no idea of how to make money in a bear market. It’s also obvious that his new partner (from 2007 Lehman) knows little about risk management or protecting his client’s capital. Besides, there is nothing in it for him to do in the public domain but hold the industries line “Bullish on America,” as we use to say at Merrill in the day.
But inside Merrill, it was another story for many of us. And at the risk of sounding self-aggrandizing, there are many that came out of that Technical Department that have made millions in market timing risk management and compounding profits.
And it’s FUN! It’s like your underrated team just won the Stanley Cup!
These numbers are current through last Friday 6/17/22. Count the number of calendar days back from the 17th 196 days and you will see Contrary Thinker went aggressive on the bear trades with the TOP of the Nasdaq. Hey, even a broken clock is right twice a day. The deal is you have to know it and do something with it.
I have seen many wealthy investors suffer for years because their long-term family heirloom stock is declining by 50%. But they cannot sell it because their cost is $2 a share the stock is currently at 80. You not paying the tax at all provides the psychological wherewithal to stand by helplessly watching their stock go from 80 to 50 to 30. If they had paid taxes annually, they would be better off.
Let us see it from another point of view because most investors know the power of compounding their rates of returns. The well-known Turtle leveraging system is based on this “power.” Yet the majority do not have the insights to take advantage of it or they are too lazy. So, they just have a buy-and-hold investment policy.
My point is simply this if you start with a reasonable sum of money let us say $10,000 and you make 10% a month, use the power of compounding, you will be a millionaire in four years.
This is not farfetched since many times you are making 30 or 40% or even doubling in an exceptional month but ride out the dips, the corrections, the bear markets, which you KNOW are coming.
So why not sell and look to buy the correction? Do you have to pay commissions? Do you have to talk your broker into selling it? Do you have to put up with humility if you are wrong and the investment keeps going up? Man, that is rich! You need to stay focused on the process and get your head with all the pet peeves out of it.
The reason the leveraged ETFs and the reason deep in the money options appeal to the market timers is they know that they can double and triple their money in a brief period of time, with a sound trading strategy. Obviously, since everyone is not a multimillionaire the real secret is only trading when the situation is optimal, with high reward, and near price levels that keep a wrong move a small loss. Professionals trade entirely with less fear as the foundation of their operations because they have this investment policy or philosophy.
If you are not a member of Contrary Thinker you should do it today.
Getting back to having fun, this week is expected to open with a break to new lows. On Friday all the major indices closed below their 2/24/22 lows except the Dow, which has been pointed to as a smokescreen.
The first chart provided here is the daily and weekly Dow revealing both S-T price support and the next major support zone. The daily bar has prices sitting on a critical descending trend line. A move below it should not be ignored by the market. Gann trend lines happen to intersect on the daily bar at the intraday lows for the index on 2/24/22. A move below it is a bearish signal that will pick up a following before the week is out.
If Contrary Thinker is correct about a lower gap open Monday the outcome becomes near certain. The weekly bar has lots going on but it should be clear there are three independent methods used to calculate where the next support zone is running from 25,300 to 29,550 with a mid-range at 27,166.
That puts risk for May into June at 25% from here. The three methods are ratio math that projects support zone for the year (green horizontals.) The Fibonacci retracement of the advance from the 3//23/20 low (.382, .50, and .618). Plus the Gann angles that cross at 28,000. Also, note that the recent cross on 2/24/22 makes it a very important level that should act as an acceleration point if broken. Also not the next cross os in mid-June, which fits our COT scenario planner chart and table.
Long-term clients are familiar with this chart it is published every year in January so plans can be made for the year. Of course, we make adjustments as we go but there is nothing major and the dates will never be perfect. Yet the outline thus far is satisfactory.
You’ve got the background, NOW get the Trade-Ideas? Just $10/month for all of them! Use your smartphone here, clip and paste: https://tradeexchange.app.link/jack_cahn
Contrary to Thinker’s Five to One (average win to average loss) product trading bull and bear ETFs are suitable for most. These are real numbers, thanks from day one.
Members-only past this point to access the annual scenario map and change of trend (COT) calendar.
April 11, 2022
MarketMap #11
Wall Street has not changed in the past 30 years. It remains phobic regarding the bearish opinion of stocks, it is a “never sell mentality.”
Contrary Thinker gave its first warning on January 23, 2018, and October 3, 2018. The latter of which I received several “kudos” from membership. This advisory gave subsequent warnings on February 23, 2020, and on May 15, 2021, this advisory went “off risk” and remains in that status. It is strongly suggested to at least sell into rallies. I have created a personal hedge fund available on Trade Exchange, which became active just a few months ago. Previously only long dollar ETF and long dollar/short yen ETF. Today it is much more than the actual results shown in the iPhone screenshot.
Along the way, since early 2018 there have been many clues that a major change was on the way. One was the launching of Robinhood and more recently, the copycat brokerage “Beanstox” from a “shark tank” panel member trying their hand at the same thing.
On July 28, 2021, Robinhood sold shares at $38 per share ahead of its public debut on the Nasdaq on July 29, raising close to $2 billion. A broker catering to “its time to do money” any time, on a bus or “just hanging with your dog.” Well if the “odd lot” theory from the 1920s is valid, a broker doing an IPO for 2 billion marketing to the little guy or gal is part of that contrary indication.
Regarding the phobia, the majority have regarding the selling shares, of all the posts I read this past week not one suggested or hinted to sell. They were either bearish on bonds, bullish on gold mining shares, bullish on utilities and oil & gas stocks, or bullish on commodity stocks. But one factor is clear the bull bravado has died out, and the poking fun at what they call “Perma bears” has stopped. Well, it should as there is no such animal in “market analysis ” that is always bearish, there are “traders” yes but they go either way – long and short. Sure there have been “end of the world” types but they talk about other issues, not market analysis.
But the Perma bulls – who I will call the “do not know how to trade mob” have moved into denial mode calling the decline a “rotational” correction. All in the face of market correlations collapsing toward “1.”
This issue of MarketMap-2022 Annual Scenario Planner will provide a Volatility Report with it in order to demonstrate how the two – time and price – interface.
The featured chart here highlights the change of trend date from the trama date that started the ripples.
The change of trend dates (COTs) I have nickname hot spots, but they are the same. Here I am focused on the short term from the highs posted by the leadership FAANG index and its big brother the NASDAQ composite. From the three pivot configuration that made up that top –
the high on 11/4, the low on 11/10, and the final ATH on 11/19 you can see the color-coded arrows of the pivots they projected and their accuracy.
March 29, 2022
MarketMap #10
Only a few of the great ones gift away the secrets behind their methods
In the majority, few in the industry are open-minded to these methods, no one believes anything works unless they are running with the herd so they feel better when they are wrong because everyone else was.
The attitude that “I would rather be right and alone than be wrong in good company is not one of the best ideas for sales/marketing letters. Because everyone chases the equity curve. As everyone reading this memorandum knows, the advisor/trader is only as good as his last trade. So they grow cynical after finding a hot advisor/trader right in time for a few losing trades and drop out. For the herd, this cynical cycle persists over the long term, not for the Contrary Thinker.
Refer to MarketMap-2022 Issue #9
It outlines how a number of long-term cycles are coming into play now. You can go back and review older issues of MarketMap™ (MM) from this year to see how it is crunch time, tieing into the 40/20 year fixed cycle into 2022, the 83/84 year cycle coming from the panic year of 1857 into WWII year 1939 then into today, which has the strange coincident with Russia’s invasion of Ukraine. Plus the 60/30 year cycle from 1903 to 1962 (which is our scenario year) into 2022.
However, a few charts and analyses are left out. For example, the thirty-year cycle is shown in this animated Giff. From the big crash pivot low in 1932 to the 1962 crash, the cycle skipped 1992 (mini-panic in late 1989 and full-on panic on the Bombay Exchange. Leading the market to the big change expected in 2022.
It is just not anchored in fixed change dates by the market. But an astronomical event anchors it as well because Venus, Mars, and Saturn are all at 0* – in a line – in the calendar month of Aquarius, A rare occurrence, about every 30 years, and it is closely associated with major changes in the market, crash, and recessions. For example, going back from the bear in 1903, there is another great crash.
The Panic of 1873 and the subsequent depression had several underlying causes for which economic historians debate relative importance. American inflation, rampant speculative investments (overwhelmingly in railroads), the demonetization of silver in Germany and the United States, ripples from economic dislocation in Europe resulting from the Franco-Prussian War (1870–1871), and major property losses in the Great Chicago Fire (1871) and the Great Boston Fire (1872) helped to place a massive strain on bank reserves, which, in New York City, plummeted from $50 million to $17 million between September and October 1873.
Advancing 30 years, Teddy Roosevelt became president after the assassination of President William McKinley.
Roosevelt’s words and actions soon frightened businesses. His administration launched the first of many antitrust suits in February 1902. And in August of that year, Roosevelt gave a speech in which he asserted that corporations were “creatures of the state” and that the government has “the right to control them.”
The next month, the U.S. economy fell into a recession.
The stock market had been falling for four months when the recession started. By November 1903, the Dow Jones industrial average marked a low that was 40% lower than it was the day Roosevelt took office.
Stock Market Crash 1932
Putting the Buy-and-Hold Gospel to the Ultimate Test
Think you know the lessons from ‘Black Monday’? Think again.
By Jason Zweig
Oct. 25, 2019 11:00 am ET
By mid-November, the Dow had lost almost half of its value. The slide continued through the summer of 1932, when the Dow closed at 41.22, its lowest value of the twentieth century, 89 percent below its peak. The Dow did not return to its pre-crash heights until November 1954.
More big change dates and 2022 refinements with risk asset map for 2022 next…
