January 20, 2021
If the January high pivot holds, it would set up an “event-based cycle” (EBC) with a particular two-year pattern. More on that in MarketMap-2021 Issue#4.
If today’s rally fails to hold, the cycle is pulling the market lower into January 29+/- 1 day.
The checklist for the bearish engagement of hedges and investments is not ideal yet, which leaves LT and I-T investors risk-off.
Part of that checklist is a stronger US dollar, which appears to be in its early stages; and BitCoin, the leading risk asset leading the share market lower. that too is in its early stages. For both moving to new virgin price territory for their new trend would be helpful.
Volatility Report also wants its TEM method to provide a COT and set up a period of the forceful trend. Thus far the readings of a panic peak across time frames is unfolding accordingly with a flat trading range in the Dow and S&P.
A few items of note on the S-T charts shown here. On the Dow, you have the 2021 Resistance and support zones annotated on the chart. At the moment the majors are stalled in the I-T resistance zone. Hence a move below the low side of the I-T zone would be a sign of failure. What is shown is the new “Alpha Trend Tracker MA cross over the indicator, which remains to point up but filtering with a downturn.
TEM hit an extreme panic buying reading on January 7 and 8, a release of tension that leads to a flat trading range, 99% of the time a change of trend (COT). All three also show via the red arrow pointing lower is the signal without trend filter of a high tide market and for the market’s tide to begin to ebb.
One of the items on the checklist that Contrary Thinker needs to see is the supporting action of implied volatility. the two charts here need their three indicators trending higher to call for a growing fear behind the players in the markets. We do have that in its early stages here, but not elsewhere, and not yet on other volatility indicators that have a large impact.
The key here is not to rush to take any risk with bear strategies, because any meaningful bear market is not going to crash from a top tick. The Contrary Thinker group is looking at a few new trades. Short Euro, adding to our profitable short gold, short the Shanghiad Dow via Yang ETF and others.
Futures Trader, we are uploading all of our systems to the TradingApp Store at TradeStation, where they can be accessed for a few. TLO-Members either have the systems already.
For anyone following my long Volaltity (VX) futures trading systems, here are the last 13 months through January 15. You can compare it with previous postings in the LinkedIn Group to see there is no smoke and mirrors to generate the results. These numbers reflect being “on signal” at all times, ignoring Volaltiy Reports on/off system recommendations.
Back Story Continues to be Unsettled National Politics
NeoCon John Bolton Urges GOP To Purge Trumpism
Former National Security Adviser John Bolton, a prominent NeoCon who became a harsh critic of President Trump after leaving his administration, has called on the GOP to purge the “taint” of Trumpism from the party.
“There has to be a serious conversation in the Republican Party about how to remove the taint of what Trump has done, how to repair the damage,” he said during an interview with MSNBC’s Katy Tur.
“And while I think the damage is considerable, I think it can be repaired, and it should be repaired. And it should be — from the purely limited perspective of the party, it should be the highest priority going forward.”
To accomplish this goal, Bolton called on the Republican Party’s establishment to exercise more control over the candidate nomination process, ensuring the candidate ultimately nominated has “real character” and “a real philosophy, as opposed to people like Donald Trump.”
The new decade of market timing is here after 13 years of being out of favor. Get ahead of the trends. It’s inexpensive to join and expensive to discard for any reason.
MarketMap-2021 Annual Scenario Planner provides historical parallelism based on 160 years of data, repetitive extra market events and their effect on markets, tidal cycles peaks and lows, market cycles for predicting time frames for lows, and astrological cycles to isolate cresting cycles.
Volatility Reports fine-tunes MarektMap’s longer-term scenario planner for the implementation of hedges and long positions. The research publication uses advanced price based systems buy and short bias signals, traditional Technical Analysis, and new volatility modeling for market dynamics timing, including sectors and newer ETFs.
Both publications share curated news media to add backstories that fit with the ongoing market-based research.
Great and Many Thanks,
Jack F. Cahn, CMT
Contrary Thinker since 1989,
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
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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.
— 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 for your financial situation. Use only risk capital when trading futures or options
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 13, 2021
An unexpected long bar move is very possible in the current time window – January 13-20
The chance of a secular change is high. Risk assessment is a drawdown in global share markets of 36% in the first leg
Working from the long term down to the short term, they all reflect FOMO buying at an extreme. The Technical Event Model (TEM) reflects rule#1, an event that is a leading signal of a major change of trend. Over time it is normally seen at lows but has the same meaning at high pivots. The past year to 15 months across all the popular markets there is a widespread emotional buying that persisted for months, It has shown up in Gold, Bonds, and FANG stocks.
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
Secular Change what it means and when.
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.”