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May 22, 2024

MarketMap™ 2024 Scenario Planner Issue#15

Elliott’s Alternation Rule

EWT: Alternation (guidance) – If wave 2 is a sharp correction, wave four is usually a sideways correction and vice versa. If the first one is simple the next one is complex and vice versa. However, triangles can be the alternate when considering a fourth wave.

A simple EWT rotation rule says that corrective waves 2 and 4 cannot be the same, so traders should expect something different. The trick is to figure out if the next correction is of the same magnitude as the previous one. The size of the counter trend referred to in terms of “degrees.”

This makes EWT sometimes biased, regardless of its motivation. Naysayers can debate whether or not this market has finished the great super-cycle that just started in 1871. In practice, both long-term investors and short-term traders are concerned with the contours of the market over the next 10-20 years, when the rotation rule can be applied in many ways, not just within EWT.

The chart I have been showing is the last three major tops each of them the same but of progressively higher degree. Hence the current topping process caps off the secular bull from 1974, a fifty year bull market, what has just not run out of space but its run out of time. The demographics are no longer their.

The flight to the dollar is still in its early stages, all cycles flip with the start of the second half of 2024. The annual scenario chart for the dollar tells the story well.

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May 10, 2024

MarketMap™ 2024 Scenario Planner Issue#14

When the can is kicked but can go no further, welcome to economic dystopia.

The bull market can only look the other way for so long. Geo-political tensions, democracy under attack, the Feds all talk without an effective “put.”  With two of the largest economies in the world are on the eve of a FX panic you don’t need to be in a mescaline-induced portal or Huxley’s “The Doors of Perception” to see what is coming. With all the influential social media types and information providers, you may need to cut through the fog. But know this, the 1% has a front row seat and its “first in best dressed.”

Wall-Streeter’s do not hear it coming, unless you have a 1%er as a client.

April 5th copy of MarketMap™ pointed out that ” A retrograde in general regarding all planets is a time for reframing their archetypical meaning. It is the influence for retracing, reliving, and rewriting the recent cycle. It creates the affinity for man to observe things from another perspective, for untangling the thoughts and responses of the previous cycle…”

I went on to point out that the markets were entering such a reflective period. I said, “On April 1 the retrograde of Mercury begins, it appears to go slow to stationary; and then appears to go backwards. Its symbolic for our way of thinking and perceiving and communicating. It is the lens through which we perceive and understand our experiences, in this case how the investment community is forming beliefs about the markets.”

While, Mercury retrograde gets a bad rap for being the cause of communication breakdowns, computer failures, delays in transportation (e.g., the Key bridge collapse), But while most scientist find this anecdotal at best and an optical illusion, its relationship to changes in perceptions and problem solving remains.

What is humorous when volatility, and uncertainty in financial, choppy markets are blamed on what they affectionately refer to as “The Trickster.” Something anyone can say about market 40% as that is their nature. With the stock market being the worse of all markets when it comes to one way directional trends at best being 60% of the time. While Mercury in retrograde takes up only 18 percent for the year.

What is more in keeping with the use of this market profiling technique how it consistently  reveals problems because of a  more complete analysis to see what can be revealed about the market. Turn something over and more unfolds.

This cycle shifts mentality so different vantage points can witness more of the story. So, what market observers once thought made perfect sense, is being seen with new eyes. What was once assumed to be truth or fact gives way to alternate realities.

Well the market exits that period of critical thinking on the 9th, and what was predicated as the basis for the bull market before April the 1st, Goldie locks rate cuts, as turned into “if its not broken don’t fix it” with the outlook for rate cuts diminished. Rather a booming US dollar reflecting the Biden fiscal spending on infrastructure. Just not throwing money at the economy but the application of spending that increases real wealth, just not paper asset appreciations.

What technicians hive long known is what fundamentalist surprising can’t get their head around is the competitive nature of the real wealth building economy that competes with paper assets and puts a demand on money mostly in the growth industries’, like AI.

Market Mapping is all about time. As I pointed out over this year thus for how the fractals of all the markets and sectors line up with COT dates that over lap. The two featured in this issue are a good example, highlighting the change of trend expected in early May.

Gold the contrary to equity is clear. Many of my hedge fund buddies see everything as speculative, or a risk takers markets. I agree but only to a degree, but an events like 9/11 may be in gold’s pipeline, only time will tell. One thing for certain, is Wall Street hates gold.

So as we come out of the reflective period associated with the Mercury retrograde, new cycles occurred with the new moon mid week and continue today. When the moon enters Leo it will be opposed to Pluto, whose symbolic meaning is the uncompromising undoing of lies. The Moon (emotions and feelings) in Leo is about the heads of states, and gold opposed to Pluto (lots of hate, if your on the wrong side of it) is in Aquarius which is all about high tech. Do you have the have the picture now, as something in high tech may be overbought, just a wee bit.

The Synodic cycle of Uranus since 2018 is associated with monthly change of trends, with it occurring annually in April and now moving into May from 2018, 2019, 2020 and 2022 it marked highs for the month. That is how this week ends and next week begins.

If there is going to be a bearish unexpected event the market gets that over the week end, a rare event for news over a weekend. But On Monday anyway, something out of the blue that sets off the bearish trend.  At the end of the week, on the 17th a new Jupiter cycle has a massive start as it is about to leave the Banker’s sign of Taurus and enter the critically thinking Gemini. The big event is the line up of more than three planets all within a close proximity  – a stellium- in late Taurus. Conjunctions as such is a large negative attractors.

The following week of Sunday the 19th is a week of tidal lows, with lunar Scorpio known for its lows in the Nikkei and the near term lows or larger coming in around the full moon on the 23th.

But as can be seen by the Gold scenario, the big move is not over, with more uptrend into early Summer.

The best fit for the Dow/S&P annual scenario as not been as easy as the bonds, inflation, crudes and rates. But this looks like the go to model thus far and will stick with this one. Astrological profiles of Joe Biden, from a reasonable source, suggest he should take care of his health starting after June 14. Another source looking at the 12/20 year election morbidity events for all past US Presidents spans from June 14 to November 19.

There is some major event that should act as a climatic turning point late June- early July.

Banks are at risk. The demand for credit is pushing rates higher. The international flow of funds is telling the story of where the boom is, and it’s right here in the US of A.

While it’s written all over the face of the regional bank sector, which has remained in a bear market since its high 1/13/2022, the majors like BOA have unmarked Treasuries in their books. As such they like most if not all bulls “extend and pretend” that rates will come down with a minor softening of the economy.

The big S&P bank sector is attempting to recover from the first leg down of a new bear market. Thus far, it lacks the character of a bull and is now overbought without making new highs above the 3/28/24 level. It like the major averages have recovered into both time and price factors that should turn its thinking around.

The notes on the chart provide some of the reasons for the expected pivot today. More on this in Issue #14. out shortly.

What technicians have long known is what fundamentalist surprising can’t get their head around. That is the competitive nature of the real wealth building economy. Simple is that it competes with paper assets and puts a demand on the need for money to grow, and this would apply mostly in the growth industries’, like AI.

Rates are trending higher.

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Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
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May 7, 2024

MarketMap™ 2024 Scenario Planner Issue#13

 

The question is one of energy.

This market doesn’t have power, it lacks energy. A friend of mine put it this way, like “…electricity requires a current and voltage, so the market requires volume and volatility.” Today’s market has neither.

I pointed out until VIX gets back above 18, which is relatively high for this era, all news events will be spun for the bullish side. Because fear is repressed.

Many if not most bulls are net short VIX to achieve Alpha. Thus, keeping the perception that a bear market is approaching repressed, and this perceived riskless market if it – when it – turns negative it will catch all the short VIX traders vulnerable to “risk of ruin.” Like it has been done since the crash of 1987, when it was only retail traders naked puts on the averages, that brought several firms down. Today, it’s a bigger issue.

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