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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

September 27, 2021

Volatility Reports 9/27/21 Dollar Index

Expectations from the 9/16 Volatility Report called for a two to five weeks bull run in the buck.

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September 16, 2021

Volatility Reports U S Dollar

Two weeks to five-week bull run expected in the USD

The change of trend that hit on 9/6/21 is followed almost always by a 2 week to a 5-week trend. Like all COTs, they are direction neutral but the Dollar index is taking off higher and triggering buy signals.

Thanks to members and new network pros for keeping the previous post from one week ago in mind,- on the COT 9/6/21. Three weeks back in the blog post-VR 8/26/21 the price-based background provided long-term bullish conclusions.

URL to private LinkedIn Group for open-minded investment/trading professionals https://www.linkedin.com/groups/13677288/

Here is the three window look at the buck and what is attention-getting is that all three bars have put the Technical Event Model (TEM) at an extreme rule#2. This is not the typical analysis talk, it is not a sales gimmick, it is the tool used to see when a market’s dynamics are about to change. What the Technical Event #2 signals are to play the break, enter on the MA crossover, or whatever is used that triggers your entry position.

What is expected to be powerful is the bullish break because all time frames are on a TE#2. You can see the breakout levels on the charts that should add confidence to bull market traders. It is also the pain trade carried by the large managed funds, in an attempt to keep the dollar depressed, which is bullish for their stocks.

You don’t need to trade with a bias, but based on what else shows up on the charts, which is bullish. On 9/9/21 I added to my long USD/JPY and short EUR/USD. That advisory was posted in this space. #dollar #change #network

Long-term cycles are pointing higher into 2026-27. This fits with the analogist background that the dollar throughout US history is strong when the Dems. control the white house and weak when the Reps are in power.

The above bullish analysis on the dollar is not very popular. That may be because it is not full of hyperbole that we all find in the social media information stream regarding Bitcoin & Co, Gold, Silver, and the Euro, not to mention the hot stock pick of the week.

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

August 26, 2021

Volatility Reports 8/27/21

Unknown Unknown (Black Swan) or Known Unknown (Events Considered by Smart Money)

I’ll put it this way, the presidential race in 2024 will be Harris Vs Cheney. But first what is the market saying. For one, a panic buying signal was registered on 23 and 324 of August. The volatility background revealed an extreme of irrational buying on these two dates. 99% of the time they are events rather than conditions, the latter is normally witnessed on long bars, like the monthly chart, and used for risk and opportunity management. However, in the daily bar, it is almost always a “V” bottom or inverted “V” top, leading to a change of trend.

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August 26, 2021

Volatility Reports Bonds,USD and EUR 8/26/21

On the 16th of August VR said: “The set up for a big move by the bonds is now; only time will tell if it’s valid” August 26, no change.

While some may argue that a major double top is not in place, and from an EWT point of view, there are only three legs in the current sell-off, two down with an intervening rally. An A-B-C zig-zag, fair enough.

As a sidebar, I think this is where many advisors and capital managers get off the train because they feel they will look like an idiot telling their clients they are bullish on bonds because of it’s a zig-zag and not an impulse or motive wave.

Maybe one just needs a nose for change, see the handwriting on the wall, or get that minor necking pain in your neck (the later à la George Soros.) Be that as it is, the pressure is mounting for higher rates from all quarters, including the most important factor, the market itself. Leaving aside that South Korea was the first major country on the Pacrim to hike rates, both US 30 years and 10 years have the background for a dynamic trend to unfold at any time.

The monthly bar and the daily bar of the ten years have the Volatility Model signaling a Technical Event #2, a set up that 

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August 16, 2021

Volatility Reports Bonds 8/16/21

The set up for a big move by the bonds is now; only time will tell if it’s valid

Last Friday, I hinted that the rally was a selling opportunity in the bonds, the government sector. Here I can go into a little more depth.

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June 15, 2021

Volatility Reports Bonds 6/15/2021

“I used to think that if there was reincarnation, I wanted to come back as the President or the Pope, or as a . 400 baseball hitter. But now I would like to come back as the bond market” James Carville

In the previous group post and blog post, I pointed out how interest rate cycles are regular and reliable. I pointed out as well that the fear that rates are moving higher had not abated since the initial run higher and that implied fear data reveals a coiling up of the data denoting frustration and confusion by the market regarding the viability of inflation.

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June 10, 2021

Volatility Reports 6/10/21

Major Change of Trend (COT) Time Window June 11 +/-2 days

COT’s are price and time-based events that apply to all markets; hence investors and traders should expect “hyper-correlation.” The outside world event may be dramatic and out of the blue, what the media calls Technical.

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March 31, 2021

Volatility Reports Bonds 3/31/2021

Just like most people by nature, I look for the truth. Yet today, it is flattering to see others finally talking in the same terms I found critical years ago, like the timing of market dynamics based on market context.

Like the following “When we get these types of extended moves away from the 200-day MA in the 10-Year Treasury Yield $TNX, we historical get a period of sideways action following”  Well, someone predicting the timing of a market condition, a trading range.

But the 80% deviation above the 200 MA as the indicator of a sideways market vs. a correction from the event is being based on the functionality of an oscillator.

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February 16, 2021

Volatility Reports Bonds 2/16/2021

The markets are in a time window for change. While the long-term correlation between the bonds and stocks will become positive later this year, the short-term relationship will continue on its counterbalancing framework.

With our focus here on the long bonds, it appears they have completed another leg of the new secular bear market.  In the first chart CT pegs the low hit last Friday as the end of short term wave one in the longer I-T wave (3).  Hence based on EWT, this market is just weeks away from going into a full-fledge – everyone sees the bear – sell-off.

The chart window on the left shows the Tidal Trend system short from right after the panic buying peak. Today all three trend-following indicators on that chart are trending lower. Our stand-alone “panic” index (not shown ) on the weekly chart is at 64 with 65 or higher being a bell ringer.

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