March 3, 2021
The Dollar Is Dead; Long Live The Dollar
There are so many false theories and narratives about the dollar and other assets; they are not worth debunking. Advisors and managers should consider the source and the underlying assumptions used to propagate and regurgitate social media content.
To cut through the fog of misinformation, Contrary Thinker listens to the market. The two middle chart windows contain our I-T trend following systems both on buy signals in terms of direction. What gives the most recent buy signal some punch is Technical Event Model’s (TEM) setup. The weekly bar has %C on a spike, causing a technical event #2, calling for a dynamic trend. The chart on the left is TEM on the perceived risk data, which is on a new TE#2. The last time that happened, there was a 6% move that followed.
February 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.
February 3, 2021
The unraveling of the secular bull market in risk assets will come from the renewed secular bull market in the USD that began in 2011.
The redistribution of the wealth from the very top 1% to the 99%, will not blow out the budget or create monetary-based inflation, not turning the USA into a banana republic. I understand why the majority have a hard time getting their head around this when they cater to people with money. But highly unlikely not anyone in the 1%.
Furthermore, long-term Rooseveltian Economics is not Communism – no centralized ownership of assets – and has the basis for the longest bull market from 1942 to 1966 / 69 / 72, bubble up economics.
January 14, 2021
The union of European states does not have the same underlying language or the same underlying culture.
Without such the Euro has an inherent emotional weakness to stay together in times of strife.
January 12, 2021
The leading indicators for the stock market are ticking off the checklist.
Back on 12/30, the Bitcoin market was labeled a Bell Weather. It should be clear to advisors, investors, and traders that BTC and others are not StableCoin, something that can be used for a more secure currency one that can not be counterfeited. But given the volatility of the market, it is a risk asset. As such, it is a bellwether for other risk markets, it is not a hedge as advertised.
The key price level
January 6, 2021
USD In the 12/14/20 update
December 21, 2020
Why take a 50% drawdown risk for the average annual return of 10%? Because major declines can’t be timed, so they say.
December 14, 2020
The traditional move late in the cycle is to buy offshore bonds in a stronger currency than the USD. This tact has worked over the last twenty years but that regime is changing.
USD makes a long-term bottom; one more decline to the low 90s is in gear and touch with the COTs due this week. The bar chart pattern is a horizontal triangle, which supports a thrust lower and a terminal move, not the beginning of a new trend.
December 9, 2020
Contrary Thinker deals in Time, your preparedness, not fear.
“Let me admit something. There is no Bond King or a Stock King, or an Investor Sovereign alive that can claim title to a throne. All of us, even the old guys like Buffett, Soros, Fuss, and me too, have cut our teeth during perhaps a most advantageous period, the most attractive epoch, that an investor could experience. Since the early 1970s when the dollar was released from gold and credit began it’s an incredible liquifying total return journey to the present day an investor that took marginal risk leveraged it wisely and was conveniently sheltered from periodic bouts of deleveraging or asset withdraws could and in some cases was rewarded with the crown of greatness. Perhaps, however, it was the era they made the man as opposed to the man that made the era.”