July 20, 2021
The Fang’s days are over, traders see low-risk high-reward short selling here.
Almost a year ago I pointed out that Tesla was: “From a risk management point of view, the type of L-T buying for the last eight months is FOMO, panic buying, see the left window of the monthly chart, as easy to flip as the gold markets flip recently.
Contrary Thinker will be looking at the S-T charts for a sell signal. The I-T to L-T risk is 600, where it began its panic buying.”
Today the Fang+ index is looking at a double top that happens to be at predicted COT dates. The 2/19/221 dates were astrological and set a theme of corrections for the year and the COT on the 14th was a Solar-Lunar COT, an Astrological COT date, and the exact date of the secondary peak of the Nasdaq dot com peak in 2000, which is also in gear with the 45-year cycle (22 1/2 year).Visitor’s Lowest Price Offer
July 6, 2021
Demand for the USD from all corners of the world is expected to increase with economic opportunities created by Biden’s “Build it Back Better” plans.
Contrary Thinker is bullish on the buck since its double bottom in 2014. Along the way, I have pointed out that the Euro was a farce based on numerous sovereign nations forming a union because their proximity would not overcome their differences in culture and language and leadership. The central bank for the EU has its own QE issues to deal with and a lack of economic recovery hangover because of the austerity measures they took after the WFC. To date, they are still trying to catch up.
But that is the speculation behinds the bearish Euro bullish Dollar outlook. What is more important is what the market is saying.
The features three window screen grab shown here moves from left to right, long term monthly bar to intermediate-term weekly bar to short term daily bar. The red shaded area is the sell-off into August of last year, reaching a panic extreme. When TEM hits Rule#1 like that, it calls for a flat, choppy period to follow. The proverbial dead cat bounce after a panic sell-off. When TEM hits rule#1, 90% of the time or better, expect a low to be in place, and the market builds a new base.
Like a panic top, it is a change of trend, and the emotional pain that short positions are in will give them the impetus to flip out of their positions. The emotional selling started at 94. Thus the market will move to this area now without much problem. Why now?
My volatility model – TEM – for both the weekly and daily bar have cycled to new extremes that suggest a trending move will pick up a following on the next breakout or MA crossover. The latter has happened on the weekly bar, and my AlphaTracking MA gave a standalone buy signal three weeks ago.
However, what is more, important is the S-T daily bar is on a fresh and leading TE#2, setting up the spring for a breakout. I have included the data window in the chart so traders can see the breakout levels. A move above 92.80 is bullish, and as stated above, a move to 94 should be easy.
While the relationship between Gold and the USD has typically and very publically been one of negative correlation, it is not a necessity. Furthermore, a strong dollar does not put the bash on commodity-based inflation. Regarding the latter, the demand for raw materials priced in dollars is not the same as monetary-based inflation, which all the gold bugs and inflationists can talk about.
Bottom line and current working positions and suggestions.
June 15, 2021
“I used to think that if there was reincarnation, I wanted to come back as the President or the Pope, or as a . 400 baseball hitter. But now I would like to come back as the bond market” James Carville
In the previous group post and blog post, I pointed out how interest rate cycles are regular and reliable. I pointed out as well that the fear that rates are moving higher had not abated since the initial run higher and that implied fear data reveals a coiling up of the data denoting frustration and confusion by the market regarding the viability of inflation.
Our model suggested a rapid and sudden movement in this data, and while I pointed out that “Volatility modeling is direction neutral, it tells the investor/trader, in this case, to trade the break, to trade the trend following signals. As noted above, TY rates have given a bullish signal on the rates.”
In our LinkedIn Group, I said ” TY is in a cluster of resistance as mentioned previously in this space. The 132.68 price if broken is a reversal trigger until the last Friday of June. Contrary Thinker’s bias is bearish for reasons outlined before and suggests TYO or shorting the nearby futures.
The market after implied volatility spiked lower ending its counter-trend of complacency, the government bonds sold off and the ten-year notes broke below 132.20, the low side of I-T (monthly) resistance, a failure sell signal.
In the Chart Gallery below the first chart shows clearly the drain of liquidity according to the Fed, and that drain is from the reopening of the REAL economy, inflation caused by none monetary reasons, like supply chain problems and drought.
The next three charts in the Gallery are about commodity-based inflation, which the majority believe what the Fed has said is “temporary.” Contrary Thinker is bullish on commodities from the March 2020 low.
CT’s chart of the 30-year T-bonds shows a massive failure. The 4 1/2 year cycle that has been posting up timely cycle lows has failed to do so with the last sequence of bottoms expected in early 2020 that produced a one-week wonder followed by a bear market. This left-hand translated cycle points to the next low series of S-T lows at the end of July, mid-October, and early December of this year.
The market has moved below its long-term moving averages and the pair of MAs have made a death cross, calling for more downtrend. Long Term support sones in from 134 to 147^19.
Suggested trade TMVDirexion Daily 20+ Year Treasury Bear 3x Shares. Buy TMV at 71 ob, stop 66 with a profit target of 120, the low side of L-T resistance. I-T Volatility model is a fresh TE#2 supporting a forceful trend.
Stop, listen and learn. Don’t let time get by you.
The “time factor” provided in MarketMap™ will be critical to keeping you and your clients on the front foot. The New Era of Market Timing is Here. Get the full picture with this 45 day trial with CT’s eBook of cycles.
Chart Gallery Reflecting Pressure for Higher interest Rates. Bond Buyers will Demand it.
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
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.
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June 10, 2021
Major Change of Trend (COT) Time Window June 11 +/-2 days
COT’s are price and time-based events that apply to all markets; hence investors and traders should expect “hyper-correlation.” The outside world event may be dramatic and out of the blue, what the media calls Technical.
May 28, 2021
The FX log jam is breaking.
Part of my checklist for an ultimate peak in the risk markets was for the ultimate risk market to peak and fall on its face. The bitcoin did so, and it did so based on our outlook 4/16/21. Nice call Jack, even though I say so myself. The decline thus far in the early stages of a new bear market, sell rallies long term, if a day trader is careful buying dips now as the panic low is about worked off may continue to work before the trading range comes to an end. But more on that in the next BTC commentary.
May 12, 2021
Worth Repeating: “Price Based Method, Risk/Opportunity Forecast, Strategy, and Plan or Algo System Engaged with Timing”
If you did not read the post from 5/7/21, I suggest that you do, and I will not repeat it here. Instead, focus on the leadership of the bear markets. https://contrarythinker.com/volatility-reports-5-7-21/
The Dow and the S&P are the stalwarts of the old yet great bull market and showed cracks yesterday right on cue with MarketMap’s COT date expected on the 11th +/- a day. CT will wait for at least a few hours before we jump on the short side regarding the old guard.