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July 16, 2021

Chance favors the collective mind

Why Join Contrary Thinker?

It is just not about the services. The two market analysis newsletters meld into a system and actionable ideas. It’s just not about getting ETF and Option trade ideas on your phone. Plus, it is singularly just not about systems and indicators available on TradeStation’s TradingApp Store. It is about Collaboration in our private group in the space LinkedIn provides me.

Back in 2003, I read a magazine article, “Why Collaborate?” It pointed to the trend of sharing as nothing more than a meaningless fade and something only used for sales/marketing, aka social media marketing (SMM).

Today, collaboration remains widely doubted when it comes to trading, investing, and risk management. The aftereffects of WFC linger. Plus, the “Great Bull Market” has created a cottage industry of “do it yourself” types with little or professional know-how, all caught up in the work-a-holic “hustle culture of social media. Where the trend bails them out of mistakes, at least it did until twice in 2018 and 2020 in a big way. The decade of market timing has started, only a few have noticed.

The point is being open to “teamwork” because it is essential. The internet has broken down the bastions of Wall Street to allow groups outside the boardrooms to develop ideas and methods that can compete with the big boys.

All of that is simply anecdotal evidence to support the notion that collaboration is worth investing your time in. The fact that so many new software apps and add-ons are coming to market that support collaboration spaces and direct messaging – confirms this notion. But to assume that it is all available for free via the public stream of Twitter or Facebook is naïve, which will become clearer as the market becomes more dominated by experienced market timers.

While it is a historical FACT that collaborating in teams, groups, guilds, associations, or corporations historically and today spearheads our capitalistic system, cynicism remains.

Nothing has been invented without group collaboration independent of the abstract model of capitalism of Ann Rand’s Fountain Head.

So, the question is: HOW do you want to leverage your time? And WHO do you want to collaborate with?

If you are a professional advisor (RIA) or a private capital manager, a family capital manager, or a trader, Contrary Thinker provides you with a professional private group to participate in.

Thus, providing you with just not static and isolated ideas in newsletter format or on a blog that the analyst group thinks is good for you and your people. Rather, you have access to good analysis for your people, fits your objectives, fills gaps, and assists you in leveraging your time by allowing you to do what you do best. How? By collaborating through feedback, questions, and request.

Thank you for visiting with us in the private space LinkedIn provides my team and me to communicate and support new friends and existing members.

Please accept this letter as a friendly reminder not to let your visitors pass run out and become a full member to Contrary Thinker today.


Take the 45-day subscription trial, which includes the eBook of MarketMap’s 2021/22 cycles, the Special Report “Traits of a Market Panic to make a Fortune PLUS eligible for a long-term discount when you subscribe. 
Includes all of the ETF trade recommendations! and CT will be adding Options and Futures shortly.
If you are a systems trader with TradeStation™ renting any of my products from the  TradingApp™ Store is the same as Contrary Thinker membership. Check them out here. 

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 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,
Copyright 1989-2020

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR

25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— 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

July 13, 2021

Volatility Reports 7/13/21

A long-time mutual fund type said Monday there is no “bell ringer” of excessive optimism by the markets that would give a “risk-off” signal.

That in and of itself is a bell ringer because it’s not the train you see that will kill you, it’s the one you don’t see.

I’ve written in these pages that the panic pandemic sell-off was not a black swam. It was a known unknown because it was news in the public domain in 2019 hence the 19 in Covid19 yet the market in its blithering way advanced into February 19, 2020. Just like the run-up by Enron in 2000, where the news was out regarding its accounting practices, yet it climbed to all-time highs on August 23, 2000. Here again, a known unknown, what I think of as dump risk assessment.

I am sure that many will think I am simply projecting. However, a “known unknown” is the risk a person or organization is aware of but is unaware of the size and effect of the issue. As I have pointed out along with several United States Senators my advisory told my people to raise cash, gave “off risk” advice in the early part of 2021.

“Hmm, potential pandemic, what risk?”  Yet the media and the administration downplayed it for a time.

For example, my Father founded a raincoat company in the 40s “Aligator Raincoat Company,” as in the overcoat that William Faulk adorns in the Columbo TV series of the 60s, and never took off. For my Dad a rainy day was a good day, for him, drought was a risk, a known unknown regarding when, where, and how long, and so on. A known unknown risk.

Today there is a clear risk to the markets and not the ones that we all hear streaming in social media. Since the Trump election, I am more aware of the Geo-Political problems that face the markets. From the internal issues in the USA to the international issues that exist with Russian hacking to China’s competition.

Previously the following chart has been used to point out that the pros, the smart money see tail risk – which is hyper-deflation or hyper-inflation. That must see a catalyst that would cause such an extreme, as drought causing hyperinflation. The chart data on the right is making all-time historical highs along with the data from the CBOE, both suggest protecting your risk investments.

Meanwhile, the advisors to the public, many of them compete with my publications are extremely bullish. Above levels seen before the 87 crash, the dot-com peak and the 08 WFC, and others.

Investors chasing yield in junk bonds have reached an extreme of greedy action. A sign of irrational buying that is associated with major turning points. The chart used here from CNN reflects that fact. 

On top of extreme sentiment supporting the bearish expectation of a topping process is the internals of the market have providing”off risk” signals.

The 52 weak highs MA10 peaked with the initial high by the Dow & Co back in May as this featured chart clearly shows. As well as the last two peaks preceding tradable top s of the major averages.

Our “Churn and Burn” index provided Contrary Thinkers with an “off risk” warning back in March of this year and as the title implies the market has churned under the annual highs of the Dow, highlighted by the blue dots on the chart. From the most recent breakdown by the index in May and three days ago, the market has been laboring.

MarketMap High Lighting Change

When cycles have discovered that track the market’s oscillations when the data is outside the market and outside any related news you would hear or read on Fox Business or CNBC.

The following chart is based on the geo-cosmic cycle, which is part of the January Fractal membership have access at the beginning of each year.  Here however I wanted to demonstrate how it stands along provides a “ball park time window when the market is expected to make a change of trend (COT).

Below are two cross-check charts starting with the 2009 low, and the 13-year cycles. The problem with many is they may be looking for 100% bottom picking and top picking ability. Where it a matter of evidence that supports the COT from different methods; and July 12-14 is a good example. A time window associated with extreme optimism as pointed out above along with other facts.

In any event, it’s fairly easy to see how the Geo-Cosmic oscillator’s turn dates line up near the COT dates of the Dow. Imparticuallry is the high pivot in late 2015 on the Geo-cosmic date of 7/4/2015, six years from our real-time window today. Plus it was followed by a meaningful trading market where our scalping systems and long VX system were put in their environment.

 Please note the same coincidence in changes in the direction of the market near the Geo-Cosmic peak and throe dates. What is more striking is the 3/9/20 low, the November 9/20 low, and the high dated 5/13/21 that happened when the Dow and offshore major indices made ATHs. p.s. There is no such thing as a “coincident.” 

Trade-Ideas

Buy FAZ at $27.75 or better  PT = $38.5 SL = $25.5 
Contrary Thinker sees a good chance of the high-risk players getting clipped here. The Bull ETF we want to play the bear side of invests at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index. Other leading high beta indices have rolled over and are trending lower. FAZ is the bear trade with 35% S-T potential and 7% risk.  FAZ is 3X Shares seek daily investment results,  300% of the inverse (or opposite), of the performance of the Russell 1000® Financial Services Index.

Direction Neutral Thinking

A concept that for many is difficult and some may see as racially based on old habits. But the market’s background, its condition is not its direction, it is how the market is trading, is it flat and sloppy, is it choppy and range-bound, is it expanding its range or is it pro-directional trending; and has that condition reached an extreme and ready for a change to something else?  It’s a powerful concept once you “get it” and it provides better risk and opportunity assessments, as well.

Back in mid-June, I reported the expectation for lower prices into the end of July, and “thus far, the action has been bearish; the Cash S&P has traced out a clear five waves down with a clearly defined 4th wave triangle, which is now forming resistance (highlighted in blue.)”

The chart on the left presented TEM signaling a rule#2 predicting a strong trend after the next trend-following or breakout trigger. Well, CT’s bias was not placated. Instead, the S&P broke out and ran to new ATHs.

I think this will provide a better understanding of the Volatility modeling I do. In that vein, the daily TEM is on a new extreme rule #3, painting the S&P’s trend as being old, feeble, persistent but due for a change.

Chance favors the Collective Mind
Here is one way to access the group, the “Volatility Reports” newsletter and MarketMap-2021 Scenario Planner, Blog access, LinkedIn private group access plus eBook on major cycles 2021-2022, and more for one low price without long-term commitments. 

Plus all of our trade ideas.

Copyright 1989-2021
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 8006183820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s 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.
— Contrary Thinker does not refund policy; all sales are the finale.
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.

July 5, 2021

MarketMap2021 Issue #12

Brutal Reality Check Expected

If you believe in Technical Analysis, your working assumption has to be that form (the market) precedes substance (media rationalization or the extra market news). No, the market is NOT a discounting mechanism. News event – hundreds are being presented daily via social news feeds to community blogs from Zero Hedge to Seeking Alpha. Contrary to Thinker’s looks at price context and the time factor, everything else is a “Back Story,” the sizzle, not the steak.

Today social media pundits and providers of market data are in utter amazement. They have never seen their event-based analogies break so many records. The headlines are streaming ” never have we seen…”  For example, no dips quarterly, monthly, weekly, and daily exceeding all previous extremes among every observer that provides content in the social domain, but they remain optimistic. For the economic and media event-based bears, their story is the “same old same old,” with accessive debt being the primary issue and a crashing dollar and a gold rush. The bulls pointing to a reflation after the pandemic shut down will grow the market out of any problem.  The news background has not changed much over the last four years.

Overvaluation, no fiscal or monetary tools to assist in a soft landing when the next downturn happens to the competition coming from China.

The debate seems to be over inflation. Is it a problem or not, is the relation trade-off, or will it get out of hand? The messages are confusing to investors.  Here is an example:

Inflation May Have Peaked, Killing The Reflation Trade

“The reflation trade may have just died a horrible death on June 10. The CPI reading came in at 5% year-over-year, ahead of estimates for 4.7%. But despite the hotter than expected reading, bond yields continued to slide. Despite months of hotter than expected inflationary data points, bond yields have been moving lower, and breakeven inflation expectations are now plunging as well.”

Smart money is talking with their pocketbooks with a concern about either tail risk, both deflation, and hyperinflation—more on that below.

In the  LinkedIn group space, I pointed out last week how the market tipped its hand from the beginning of 2021 as irrational in the same way that it made its peak in late January 2018 and late February 2020.

I understand that many Technicians base their work on the premise that all market activity – is irrational (aka fear and greed), excluding the lone Technician. However, I have found that many technical analysts are heard, thinkers. As a rule, they are social animals. Be that as it may, my Technical Event Model (TEM) provides a clear insight into the buying and selling motivation: TEM tells me if market action is rational or emotional and when it reaches an extreme. With the irrational signals being rare on the long-term bars, they are more important when they do happen, at both tops and bottoms.

As stated from the beginning of the year, near 30,000 Dow, the buying became irrational and, on that basis, will be easy to flip as it is grounded in fear of missing out, aka greed. Hence these buyers will be guided by their account balances as they drawdown instead of a rational technical reason to be an owner.

From the start of the year – see the eBook “Time Factor” I have outlined the big cycles that have crammed themselves into this period 2021-2022, and the point they are cresting as this publication is being written over the 4th of July holiday weekend. With the background, the context of the market primed for a reversal of trend in the first six months of 2021 is now all about the critical Time Factor. The 245-248 years of the beginning of this glorious country, which by the way, is a critical returning cycle as well.

One of the primary large cycles is the 90/45 year cycle, which I will not rehash here. But there is no coincidence that when the numbers 1 through 9 are added, as in Pythagorean theory, they add up to 45 or that the 360 degrees in a circle are eight 45 degrees.

The current time window is the same as 1931-1932 and 1975-76, one period of deflation and the other of stagflation, the former left-hand tail risk, and the later right-hand tail risk.

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June 1, 2021

MarketMap2021 Issue #10 w/Chart Gallery

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June 1, 2021

Volatility Reports Crude Oil

Walking away from a winning streak is rough.

One good thing for every Contrary Thinker is that I am read and respond to comments and feedback from my traders and team.

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May 8, 2021

Chart Gallery 5.10.21

Charts Support the Following Summary Outlook

From early May into the end of July, volatility should spike across all markets.  The composite index Contrary Thinker developed represents just not the S&P but the world index, the bonds, the metals, China, etc.

By industry standard definition, volatility is bearish or perceived risk and fear by the general marketplace.

Contrary Thinker is S-T, I-T, and L-T on the following:

Bullish on Interest Rates (lower bond prices). 

Bullish on the USD, it’s more than a technical point of view backing up the dollar to move. It is based on the nation’s sense of self-preservation. If any Sovereign Nation losses control of its debt it will lose its freedom.  In the face of all of the people that can only think of buying without any regard for buying power are not thinking like big money and old money here in the USA. Nor are they understanding the “full faith and taxing power of the Treasury.

Bullish on the Aussie Dollar, S-T pullback underway.

Bullish on Commodities, on a new term basis, there may be a pullback buying opportunity.

Bearish on the Euro and Pound Sterling

Bearish n the US stock markets, the Nasdaq and the Russell have already made their ATHs, along with the FANG sector and the Tech sector.

Bearish on the World Stock Index, net the USA, the Pac Rim, and Asian Emerging Marfekts have already made their ATH. The EU market is mixed with a number still a good distance off their historical highs, with little chance of making new ATHs this cycle like the FTSE, while the Dax has posted up its ATH recently.

Bearish on Gold and Silver. Late last week the bullish sentiment jumped all over the higher prices with the trope, the same old story that is repeated during bull markets and bears. The inferred breakout looks like the move that occurred in January of this year.  A head fake, the market will tip its hand early this week.

Crude Oil and Carbon Energy, S-T bearish and leaving the longer-term for fresh look after the expected “hyper-correlated” downturn.

Bitcoin and Cryptocurrencies, bearish. The first nine charts in the Galley feature how all of the markets made long-term peaks on irrational – panic – buying. The bonds are the leading example of what to expect after a FOMO peak. Regarding Bitcoin and others, they have no economic function, they serve no purpose in fiance or they do not feed people or build infrastructure. Plus, they are too volatile to be a currency for any country, and the supply is unlimited with new brands hitting the street weekly.  As Buffet warned they are “risky and worthless. I can say almost with certainty that they will come to a bad ending.”

The second patch of charts features cycles both mundane (math-based) and others that are Galatic. They all suggest a trend starting this week and going into late July. Rates and the dollar up everything else down.

Click to Enlarge COT Table below for change dates and acceleration periods

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January 2, 2021

What Contrary Thinker Told its Membership

The One Factor that Trumps the New Market’s Giddiness

Published on: Jan 22, 2020: “All measures of market sentiment are at highs or extreme highs, from put/call ratios to CNN’s greed index, you name it. The outside world’s focus for this outright giddy disposition and  talk of a potential “melt-up” in equity values focuses on the following four elements…” Read it here. 

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December 18, 2020

On The Wings Of Tail Risk

Making Money from the Turbulence of Secular Change is 180 degrees opposed to Investing for a Long Term Average of 10%. So why take the risk of a 35% to 85% drawdown?
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December 4, 2020

Long Volatility Inching Toward Go

Attention: Long only VX futures breakout scalping systems without on/off risk engagement has produced a triple for the year, thus far.

This highlights the change in the market’s condition that began back in early 2018; where long volatility began to outperform long-only investments, aka short volatility investments.

KeyNote:  You love to build code from proven basic and essential price based concepts. But a bundle of  1000 files for a low low low price and get three months of free look at the above long volatility scalper! 

Volatility Reports has intimated that the local stock averages are wedging out a top that should carry over into next week when a number of meaningful COTs windows happen. During that stretch, the group will be looking for TEM ( our volatility modeling ) to provide clues of a high pivot among other signals. The tact we try to take requires waiting for the ideal set up. Low-risk high reward, getting in too early is the rough bit.

Hence Volatility Reports prefers to see a reversal off the second L-T panic low in the USD. Bearish sentiment is widespread on a variety of methods for the US buck.  The next chart shows the underlying shorts that provide potential buying power.

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November 5, 2020

MarketMap2021 Issue #1 the Long Cycle

THE 45-YEAR MARKET CYCLE
Some power work comes from independent scholars and academic types when it comes to isolating cycles. There are many used in text and published in trade journals most of which have a strong rationale behind them but few that show real empirical occurrences.

The long cycles are grossly overlooked for a few reasons. It’s clear the industry promotes to their own ends that timing does not work. Also, not in their interest is the long cycle does not contribute much to their transactional models.

The problem with the long cycle is it is difficult to pinpoint their exact top and the topping process can take a year or two. Just like the 2007 peak among others. Leaving aside the topping process, cycles are critical to your financial wellbeing among other things.

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