CT Journals
MarketMap
March 3, 2022
Volatility Reports 3/3/22
We are all traders of Volatility
The primary source of performance for capital managers is (1) asset selection and (2) short volatility or short correlation exposure. When the asset groups’ diversification converges on one (1) all that remains is being “short volatility” for the majority. Selection does not matter. In other words, capital managers are long everything! Hence it is not a shock that the majority underperform during a crisis.
The emergence of the components for variance swaps to hedge is just one example of a bull market in fear since 2008-2009 but also it requires the use of “market timing” to be effective.
Without getting into the methods of “short variance swaps” the bottom line is “Regardless of the asset class, the true source of alpha seems to be moving between short and long volatility exposure—the volatility risk process and not the underlying asset.” Artemis Capital Management
In other words, the method that can achieve Alpha the industry commercializes as unfeasible is market timing! If you buy into that propaganda by the industry, you are reading the wrong newsletter.
The first chart featured today reveals a number of important factors. With that in mind, here is some background backing up a number of Contrary Thinker’s assertions.
February 24, 2022
MarketMap™ 2022- Issue 7a
The study of history plays an important role in all aspects of life including investing and trading.
Contrary Thinker’s publications are not about cheap talk. Our publications are about providing a research product from hours of work to your benefit, for a fee, full stop. No one wants to benefit from outside world events as negative as the pandemic was or Putin’s invasion of Ukraine. However, I do not believe in coincidences and have witnessed over my career the market (form) preceding outside world events (content), to be meaningful.
Clients following MarketMap™-2020 Issue#1, received an “off risk” advisory to raise cash and engage hedge systems.
Two years later, in all of the issues of MarketMap™ -2022, Contrary Thinker has made clear the risk of a major bear – when price and time analysis gave a clear “risk-off” signal mid-May 2022. Our advisory pointed out it was the train not seen that will kill you, and over the long term, the risk remains little noticed or thought of and it is a political one here in the USA. The events offshore are only a catalyst.
MarketMap™ -2022 Issue#2 is important to you, your investments, and your client’s investment. That publication pointed out a series of historical parallels
February 21, 2022
MarketMap-2022 Scenario Planner Long Bonds
February 17, 2022
MarketMap-2022 Scenario Planner Issue #7
February 13, 2022
MarketMap-2022 Scenario Planner Issue #6
MarketMap™ 2022 Scenario Planner Update
The 56-year cycle (solar/lunar cycle)
There are several impacts the tidal cycles have on the stock markets – based on empirical studies worldwide over 200 years plus. In various mathematical sequences, the 9 yr/56 yr cycle is used to provide insights into when long-term highs and lows are likely, insights into the character of the market for the coming year, and wheater or not the market during the 12 months period will be prone to panic days. Furthermore, once a scenario for the year has been highlighted, calendar math can be used to count when the big one-day wonders can be expected, the mega one-day recoveries like 3/24/2020.
Obviously, these items are good to know for both offense and defensive reasons.
February 9, 2022
Volatility Reports 2/9/22
The stock market is a metaphor for karma
What does buy the dip look like? Based on price, time, and implied risk it looks like this, and you can understand why everyone was screaming “blood in the streets” in January. Because BTFD stopped working. But today the wishful thinking bulls have put their long pants on and are “leaning” toward the bull market.
Whereas, the market by itself –
