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CT Journal
breakdown
November 26, 2019
Panic Buying in Biotech Sector
November 20, 2019
JPM Play the Break or Fade the Break?
Another way to say it, will the market continue to trend or will be correct. To dig deeper, will be a break to new highs and follow through with a similar rate of change as has been booked thus far since the 10/3/19 low? Or, will it fail and sell-off, form an inverted “V” shape top and give back gains with a high rate of change?
CT’s featured chart shows JPM at an extreme. with the market in both L-T and I-T resistance zone. Plus the longer-term chart on the left reveals an uptrend that is old, feeble and persistent but due for a change, as well as the I-T basis in the weekly bar. <more below>
The Short Term chart has the TEM model recycling to a fresh Techcnail Event #2, suggesting a high rate of change trend is back by the tension in the market. Like all volatility models, it does not suggest a direction, even in the face of the media’s bias of referring to stock market sell-offs as volatility.
However, the bigger picture of the JPM that divulges that a 13-year horizontal triangle was the springboard for this breakout. As such, a post triangle thrust is terminal trends, not the kick off of a new one.
Watch this space.
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Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
Copyright 1989-2020
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November 20, 2019
Crude Oil Waiting on the Break
Gain Better Control of your Strategy Engagement with CT’s Technical Event Model
As an example of strategy engagement, the use of the popular and highly reliable horizontal triangle. One of the main reasons some traders don’t do well in the markets is their inability to wait. A key strength of all great traders you will ever read about.
Please, if you know an active day trader who trades daily and is doing what Soros has or what Trout has or Dalio let me know, I will give you a free subscription to VR for 6 months.
In any event, this chart of the crude shows the horizontal triangle we have been watching for a few months. First, Contrary Thinker is not engaged in trading Crude here. That does not mean some systems are not working and some that are working very well.
Key I-T R&S Zones for break
The following numbers are from my %BB-DBR trading Crude Oil. Over the last ten years made 325k with contract management. That’s all good, and that is how the groundbreaking systems development began back in the ’90s and progressed into the first decade of the new millennium.
Today, however, system trading is more sophisticated. It is more like the way most investors and traders think anyway. They make a forecast, and after they have a forecast, they believe they come up with a trading plan – a strategy – to take advantage of the forecast. They typically do this without a highly accurate dynamics forecast and have no timing for the forecast.
Monthly P&L from %BB-DBR Taking All Trades on Crude with TEM coded
November 6, 2019
Chart Gallery Primary Markets
The Dollar is at an extreme, a position where it needs to breakout or fail. The background – the context – supports a trending moving for whatever direction it takes. A move to 103 would still allow a correction in 2020 back to the mid 80.s before the secular bull market resumes.
The old school is out in full force, the equity bears who think the old Intermarket of the dollar down gold up and the stock market down is stuck in the ’70s. The old school is Gold competes with stocks. Since the turn of the century, they are in the same risk boat.
Gold has failed to be a hedge, looks to have uncoupled itself as a safe harbor. The charts show the market is complacent at this point, seeing no risk, after completing a head and shoulder’s top. The tidal wave system is now short the market, as well. Silver will follow.
In a phase Risk Off, that includes the metals
Furthermore, if there is no yield in most government-issued bonds they are now a risk asset also, as you can only make money via capital gain, yes? The US T-bonds are testing low, and a break confirmes the peak is in place.
The peak of the bond markets was on panic buying, just like all the other markets in reaction to the Fed succumbing to White House pressure to lower rates and print money. Gold and bonds both peaked in all time frames on poor or panic buying.
Commodities are starting to perk up via the S&P World commodity index. This has been a non-factor for decades. Rather the risk has been on the other tail, that of Deflation. In this regard, the commodity averages are in new uptrends. The other breadbasket of the world is Australia; their buck is at an extreme, where it is either going to breakdown suggest deflation – or fail to breakdown and reverse, which supports inflation.
With Crude at the apex of a horizontal triangle, direction to be determined by the break.play the break. The risk is that it dribbles out of the pattern.
The chart of the Dow Utility index portrays a rare expanding diagonal triangle. If valid the defensive market should go into a free fall back to where this fifth wave advance began at point (4) on the chart. Action out of triangles is typically a high rate of change affair. TEM supports the idea.
more to follow,
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