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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

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— 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.

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–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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December 1, 2020

Volatility Reports Bonds 12/1/2020

Long Term Bearish Since Panic Buying Top on Long Term charts from March to August 2020. The dynamics are changing.

It’s been pointed out that the junk bonds are staying in gear with stocks even though they have not confirmed new highs for several years and continue to underperforming. I would still watch that group for a breakdown as a sign that risk assets are coming undone.

In the meantime, the amount of debt is not a concern to the fiscal policymakers in the wing, and fear is starting to break higher measured by the CBOE interest rate volatility data. In fact, contrary Thinkers volatility composite has tested olf support successfully and is moving higher, another sign that risk-taking is becoming extreme.

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