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    CT Journal


June 24, 2019

The Good Bad Attitude, Contrary Thinking

February 21, 2019

Low Volatility ETFs in the Headlines for Contrary Thinking

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February 16, 2019

Direction Neutral Risk Assessment

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February 15, 2019

“Ninety Nine Cents Won’t get you into NYC, it will take a full Dollar”

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January 20, 2019

Market Outlook: Long-Term Trend Following Models Are Turning Bearish

Volatility Report January 21, 2019

From the many analysts and capital manager reports, I read they almost all sight the well-publicized concerns but only a few are bearish. Not a good sign from a Contrary Thinker point of view. From the many I found one who at least toned down his bullish enthusiasm as seen in his summary: “Some popular long-term macro models are turning bearish on stocks for the first time since 2008-2009. Throughout 2019, other macro models will slowly turn long term bearish as well. The probability of a pullback/retest is still high. As the stock market rallies higher and approaches its 50%”

However, Volatility Report dated September 24, 2018, explained things this way, “The problem with the bulls waiting for a clear reason to sell is the vast majority point of view. Add to that fact that the majority of systems and strategies all have sell signals within the same price range when the signals hit it will be a rush to the exits.”

That is what the market witnessed from late September right into Xmas. The only thing that is slow, is the unfolding of a bull market mentality. Bear markets are fast, that is why they are preferable for aggressive trading and hedge funds. Plus systems are already engaged and when this low volatility advance has run its course and the first S-T volatility expansion hits, the bear market will be back off and running.

As a market analyst, I stick with the facts, the high probability ones opposed to wild ass speculation.  Like the following statement is 100% ungrounded, “Dow Theory signal confirms that the short-term trend is up for stocks. Several converging factors increase the likelihood of another short squeeze.”

Well, from a one world point of view, the new highs by the Dow and Nasdaq in September were not confirmed by the world index – net the USA. They have not recovered back to their highs of 2007. Regarding the Dow Theory is how the novice TA and social media bloggers do not know the rules of Dow Theory and that the December lows by both the Industrial and the Transportant indices confirmed the downtrend, with the Transports hitting prices not seen since November 2016, the beginning of the extended bull market CT expects the market to correct completely.

Regarding the speculation of a short squeeze, there is no sign of panic here, TEM has just reached a Technical Event #3, an event that tells the investor/trader the current trend is laboring, it is old, persistent and ready for a change.

Systems traders, our group, has a library of trading strategies that fit every trading style. All of our algo trading strategies have the risk and opportunity management model – Technical Event Matrix (TEM) – embedded their code. Our member investor/traders can implement a comprehensive system with no second-guessing. They have the governing model for visual control as well. Membership includes ongoing tutorials with open code; non-members locked code only with 45 days of support. Library Link Here


Great and Many Thanks,

Jack F. Cahn, CMT

Copyright 1989-2019

Thinking Man’s Trader 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. www.ThinkingMansTrader.com, 800-618-3820

— Thinking Man’s Trader 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 to your financial situation. Only risk capital should be used when trading futures or options.


November 27, 2018

How to Time Long Volatility Strategy

How to use the Technical Event Model

Here is an example of waiting for near 100% certainty set up. The overarching measurement for engagement of the long volatility strategy is our Technical Event Model (TEM).

One reason why a many will ignore this idea is they expect to see profits every calendar period for the system, but consistency is not the point here, at least not yet. Instead, can a trader use a filter to tell him when to trade a market strategy and when to trade it aggressively or not to trade it at all?  That is the point; we can work that into monthly and annual profit consistency later.

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November 19, 2018

No Christmas Party for U.S Markets

Technical Event Model – Volatility modeling

Market backdrop provides a springboard for a dynamic trend.  In the new millennium, the Read More

November 6, 2018

MarketMap 2018 4th Quarter


What is typical of a major market top is how most professionals in the industry speak about normalizing the corrections.

Contrary thinking looks for one of two circumstances to correlate with such major turning points.

The one is when data or events remain the same but the marketplace’s interpretation of the events changes. The other is when the data/events change yet the way the market is interpreting the events remains the same. The one is a shift in mood, and the other is a denial of change both imply a regime change regarding the market; and possibly the economy.

These interactions give subtle clues of change that allows the contrary thinker to act before others, before the majority.

So today while the facts have remained the same, the interpretation has turned to the above-referenced normalization process, which is par for the course after the first signs of the new bear markets.
This normalization process sounds like this industry-wide: “Wall Street has seen 56 pullbacks (retreats of 5-9.99%) in the past 73 years; the S&P index dipped 6.9% in this last one.”

And they will add that, “…the benchmark fully rebounded from these pullbacks within two months.”

They are also eager to point out that since the March 2009 low there have been 5 or 6 setbacks of 10% +/- while the S&P is still up 335% even after the October decline. But here is the catch, there working assumption is they can not time the markets. Furthermore, the inference is that if they can’t no one can.

That’s because as one “wealth manager” puts it based on the current bull market history: “…waiting out the shocks may be highly worthwhile. The alternative is trying to time the market. That can be a fool’s errand. To succeed at market timing, investors must be right twice, which is a tall order.”

Why would it be a “tall order?” It only makes sense on what he says next: “Instead of selling in response to paper losses, perhaps they should respond to the fear of missing out on great gains during recovery and hang on through the choppiness.”

Wow! Instead of looking at price-based timing models to avoid the risk and to find opportunity, he is reacting to the profit and loss trail, which is post hoc, reactive and emotional based. Hence this wealth management is not based on any “discipline” I recognize. It is based on the profitable of the portfolio. This explanation is what brokers normally say about their client’s failure because its based on fear of loss and FOMO.

Another sign of an important top is in place along with the above apathetic attitude is the modest appearance they are giving to the risk. The rare bearish voices have only modest expectations for the decline.

Lastly, the majority of financial news pundits are kicking the can down the road with 2019 being the consensus.

With that said, done and dusted, our focus is on risk management point based on an objective model not a rationalization or cherry-picked array of Technical Analysis. It is the independent use of price-based tools, strategies, and macro filters to provide actionable and straightforward support.

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November 6, 2018

The S&P’s November to Remember

What follows is a blurb from the 14-page big issue Volatility Reports that is going out today covering all the various time horizons and where the market is at this eventful period.

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October 23, 2018

Market Timing is Dead

If irony evades you, you are in the majority, heads up.

Contrary Thinkers know,” the market programs the investor to do just the opposite of what he should be doing.” Contrary Thinkers also know that investors are not hard-wired to fail at achieving alpha, like so many others, would like you to believe. Its all a matter of being a Contrarian. Read More

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