January 14, 2021
Volatility Reports Euro 1/14/21
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.
The euro market has competed at least its first leg of counter-trend correcting its new long term bear market that began in 2008. Else it has completed a cyclical correction. In either case, it is about to start a tradable downtrend. A move to the 1.81 to 1.94 zone is likely.
The featured chart, hit the low side on LongTerm, resistance, which is coincidental with EWT resistance ghat runs from point 3 to 4 in the left-hand chart window. Along with the failure to get above that price level, the market failed to hold above I-T resistance shown on the daily bar chart.
The long term market peaked on panic buying and has an I-T high pivot with a TE#3, calling for the change of trend (COT). The daily bar also shows the “Alpha Trend Tracker” rolling over giving an S-T sell signal. The S-T volatility modeling supports the high to low range expansion, so the trend sell signal should get S-T carryover.
From a tactical point of view, CT will be looking for a low-risk entry point for bear trades.
more to follow.
Back Story
European Central Bank Steps Up Its Stimulus as the Economy Contracts
The central bank said it expected the economic impact of the pandemic to last well into 2022, prompting an expansion of relief programs. Credit…Yann Schreiber/Agence France-Presse
https://www.nytimes.com/2020/12/10/business/european-central-bank-stimulus-coronavirus.html
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 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 My indicators and strategies can be withdrawn for private use without notice at any time.
–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 13, 2021
Volatility Reports 1/13/2021
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.
Along with the current extreme high in Tidal Forces, the cluster of change of trend dates provided by MarketMap-2021, an inverted “V” ATH is expected here. One thing to watch is, while I expect a sudden drop like the one that hit Bitcoin recently if the high to low range exceeds 5%, there has to be follow up with the downrange of the following days exceeding that 5%, else the sell off is only a correction, not the kickoff of a major bear. In the latter case, the major top would come in in April/May as outlined in MarketMap-2021.
The weekly bar is in gear with the longer-term charts, TEM is at a panic buying extreme or the trend has reached a TE#3, calling for a change in trend because the market’s underpinnings are laboring.
The short term chart – the daily bar – has reached a panic extreme except for the Nasdaq 100 futures. I have highlighted where both S-T and I-T support zones come in for all the indices once the trend turns lower.
The implied volatility part of TEM is giving early warning signals that a high pivot is heard. It is always worth the waiting for getting on the right-hand side of the high pivot to control risk. Furthermore, Contrary Thinker wants as near to perfect set up before taking a risk or putting on a hedge.
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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,
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
January 12, 2021
Volatility Reports 1/12/21
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 of 33,145 being tested again. If it fails, the next stop is the big round number of 30,000. The daily bar uses our trend-following methods with tidal extremes are its triggers to enter and exit. The S-T trend is now moving lower with Bitcoin tidal cycles flipping on January 22 +/- a day.
The last count was that BTC leads the stock market by five days, which points to the 13th or 14th as a high pivot a the beginning of a decline. That date fits with the work published in MarketMap-2021 issue #3. Stay tuned for a short sale and hedge ideas.
CT is watching the US dollar to confirm a low and a new uptrend is in place and the leading Technical Event Model – both historical and implied volatility – is also showing some early signs of a tradable, if not a major top, in the US stock markets.
Bonds continue to probe for a low. The daily bar hit a panic extreme and the panic index is near sold out. Ss-T support runs down to 162. Longer-term risk is 137-151 for this year.
I suspect at least an S-T ( days – week or two) of working off the emotional sell-off. New shorts will be put on after the expected consolidation. the big question is will the bonds act as the traditional counterbalance for a declining stock market.
Since the contrarian point of view is to achieve that protecting it will come from investing in one end of tail risk, which means being long bonds and long stocks is a losing combination, long term. More to follow on that as well.
Back Story
Digital Poker Sites Say ‘95%’ Of Players Demand Payouts In Bitcoin To ‘Enhance’ Winnings
“As bitcoin powers back toward all-time highs unseen since late 2017, traders around the world are wondering: who exactly is driving this rally? Many probably assumed that the retail Robinhood traders who invaded the stock market this year have also found their way to trading crypto, and that’s probably a fair assessment.
But to sustain this type of a move, larger institutional players are necessary to ensure that demand never slackens, or else the volatility for which the pioneering cryptocurrency is infamous could come roaring back. Well, a reporter with Bloomberg who apparently set out to identify some of the big players in the market has made an interesting discovery: For years now, digital poker websites have been a constantly growing source of demand for the cryptocurrency, since customers often prefer to cash out in bitcoin, instead of USD, or some other currency.”
“…But as customers growing increasingly comfortable with bitcoin as a means of payment, they’re figuring out how to exploit many of the poker platforms’ policies for their own benefit. While Winning Poker Network tries to convert all bitcoin into fiat as quickly as possible, Nagy said, sometimes it gets “stuck” when bitcoin prices drop sharply. “When Bitcoin drops or does something significant, inevitably, we have people send us $100,000 or $200,000 in Bitcoin, because it’s the fastest way to liquidate it,” Nagy said. “And we are kind of stuck with it.””
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 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.
–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 6, 2021
Volatility Reports US Dollar 1/6/21
USD In the 12/14/20 update VR was expecting “one more decline to the low 90s. The market provided that and a little more. The signs of a major low setting up is the L-T condition of panic in the sell off over the last six months. Nine times out of ten a panic context is an event, not an ongoing condition. Yet the stock market during the February-Market decline in 2020 registered such extreme readings. In fact, on the weekly chart, the Dow remained in panic mode for four weeks into the “V” major low.
The weekly bar on the dollar index has reached an extreme of old age. A feeble yet persistent trend that is due for a change. In the current time from with prices being in a cluster of support for all time frames, the buck is on our watch list for more signs that a low is in the place.
The following chart shows the I-T tidal force system is short with the market oversold, being below its L-T moving average. Below the bar chart is our %BB oscillator on implied volatility providing signs of a move to the safety of the dollar.
Back Story is the broad and overwhelming consensus among the Bulls from Brokers in New York to the Mutual Fund Factories in Boston that rest on the demise of the dollar.
Contrary Thinker sees an inflationary bust and the preservation of wealth in the USA.
Membership includes “Market Map – 2021” and “Volatility Reports”
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 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.
–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
December 30, 2020
Volatility Reports 12/30/20 Bitcoin’s Cycle
The Bell Weather of the Equity Markets
The Bitcoin backers think anyone who does not believe in it just doesn’t get it—even after eleven years of experience, seeing it run from pennies to nearly $30,000, what’s not to believe.