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CT Journals
Volatility
April 11, 2021
Volatility Reports 4/12/21
A High Pivot is Expected Early This Week.
Of what proportion is the query. Some markets have already put in their primary highs, so this will be a secondary or a tertiary high pivot for some.
It may not be clear to many there is a difference between various stock averages onshore and offshore. They all do not bottom or peak at the same time. Yet the trends are in gear with each other no matter the time frame being considered.
The topping process started back on 2/18/2021 which happened to be one of MarketMap’s time windows for change. From the FANG index to the Shanghai Dow made their highs. Refer to the chart gallery used in this issue of Volatility Reports. From the S-T lows posted in on 3/9 and 3/26 – both COTs – the recovery appears spent based on TEM registering TE#3, providing a picture of the price trend as being old, feeble, persistent but due for a change.
Given their price levels on the markets peaking in mid-February being in various forms of technical resistance and that the recovery was into MarketMap’s calendar window for change early this week, and the TEM condition moves lower should begin to pick up momentum.
From the Nikkei, the Emerging Markets Pac Rim, and the FANG gang plus the small-cap via the Russell 2000 (RTY) are expected to make lower high pivots here and begin their next phase of decline. See the first seven charts in the gallery.
With the new highs made by the Dow and S&P, they have rallied into a time frame that has a high degree of confidence for change. Such change is based on the trend direction when entering that time window, which was up. Hence the change should be from up to down or up to sideways.
Chart number eight is the S&P high tech sector, a leadership group. It’s a new high produced by the tension created by the horizontal triangle seen on the chart. This pattern is typically a terminal move, not the beginning of a trend. This late in a long-term bull market the move makes its terminal natural all the more likely. What adds to the likelihood that a major high is in place the TEM signaling seven months of panic buying from the 100 level of the index, which has changed in April signaling the uptrend is old, labored, persistent, and overdue for a change, a TE#3. Risk is over 40% and as the buying was irrational, without reason, flipping the investors will be based on their investments going underwater. From a tactical point of view, waiting for the initial decline and pull back over the next four weeks, is the plan before any new shorts in that sector or similar.
Going into the major and final top may still be pushed out into mid-May, May 11 +/- 2 days, the Dow and the S&P may hang in there. But the last chart in the gallery of the Nasdaq reflects a double top, the failure to make a new high is bearish. The chart shows the same volatility background of a long-term panic buying peak followed by that FOMO advance fading into a lumbering yet persistent trend that is overdue for a change.
The overall outlook is for an S-T should peak early this week and markets should be lower over the next 10 days two weeks. The debate of what the final high pivot will look like is academic here. If the Dow and S&P make new highs in Mid-May or only secondary peaks does not matter. What matters from a Long Term point of view is risk-off and patience. From a strategy and tactics point of view, it’s waiting for low-risk entry points for bear trades and adding to the weakest markets as momentum picks up to the downside.
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.
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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
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April 7, 2021
Volatility Reports 4/7/21
Is Everybody Ready? “Yeah!” Ok, so here we go, a 1 a 2 a 1-2-3-4
Well hang on there, not so fast.
The sentiment is not – as nearly everyone knows – a precise timing tool. Surveys of what members of the American Association of Individual Investors are doing or put/call ratios are all good to know but as a background factor. AT a major turn or an S-T pivot, out of the massive proliferation of sentiment services, not all will be at an extreme of one side of the other. Some analysis will find a source that is unique and preferable, but to date, I have not found anything that works better than my team’s measures of VIX.
You will see below I use two recent charts from the public domain from “SentimentTrader” who from a researcher’s point of view provides some of the better insights around. I show them when my group sees them tieing indirectly to our independent research.
April 5, 2021
MarketMap-2021 Annual Scenario Planner Issue #8
The Confluence of Major Long Term Cycles 2021
The change of trend (COT) table presented here provides new users the ability to see how – when the market is in a channel – not a forceful trend – can pinpoint the short-term (S-T) high and lows. The most recent being a low-pivot by the Dow on March 25. The updated table for the new quarter can be found later in the report.
The Time Factor
It took me over twenty years to put together a comprehensive all-reaching investment and trading strategy. A system that combines price analysis by looking at its volatility background for context to get an accurate forecast of market dynamics (published in Volatility Reports). Adding into the system the study of time, which is a critical factor that most people do not talk about in my technical analysis field, you hear about everything else but cycles. I believe that is because demarcating time for many is like looking at a craze, only ephemeral events with little use.
But it is the time factor that is critical; if you are going to be able to time the market accurately along with its dynamics, you need to time the change of trend (COT) to be accurate and achieve alpha. But if your analysis of the coming dynamics is not valid, your COT could lead to nothing but a flat market. So, context and cycles are essential to complement each other. …”The Time Factor” continued below
Please Note because of “hyper-correlation,” the COT table pertains to all markets. So as a generality, if the market is advancing into a COT date window, expect a pivot, and if the market is declining into the COT time window, expect a low. The dynamics are predicted via the Technical Event Matrix in the LI group and Volaltity Reports.
March 31, 2021
Volatility Reports 4/1/21
“All things are poison, and it is the dosage that makes it either a poison or a remedy.”
The bottom line is anything in excess will kill you sooner or later. No one needs to tell Powell or Yellen this; the facts are the road back to normalcy will be a rocky one.
The S-T two-week tidal model used by MarketMap-2021, our scenario planner, has been accurate this year when contained within this ascending channel since the March/April 2020 low. The first chart used today shows the easy “in on the open out on the open” two-week cycle filtered by our “Alpha Trend Tracker.” Available now on the TradingApp Store of TradeStation, includes CT’s publications. http://bit.ly/AlphaTrendTracker
The tidal cycle without filters is reliable for backing the trader up with his S-T bias and keeps him on the front foot when to expect change. More on that in the newest issue of MarketMap-2021 Scenario Planner coming soon. It is a critical tool used to help discern bigger cycle change of trends when nesting them with the volatility background expecting a change in dynamics.
March 31, 2021
Volatility Reports Bonds 3/31/2021
Just like most people by nature, I look for the truth. Yet today, it is flattering to see others finally talking in the same terms I found critical years ago, like the timing of market dynamics based on market context.
Like the following “When we get these types of extended moves away from the 200-day MA in the 10-Year Treasury Yield $TNX, we historical get a period of sideways action following” Well, someone predicting the timing of a market condition, a trading range.
But the 80% deviation above the 200 MA as the indicator of a sideways market vs. a correction from the event is being based on the functionality of an oscillator.
March 25, 2021
Volatility Reports 3/25/2021
The start of the bear remains unnoticed
The calendar count starts with the Dow price high on March 18, 2021, and closing high on the 17th. There is more to a bull or bear market than an arbitrary definition like you will find in Investopedia. There are particular characteristics of each that differentiate them from countertrend corrections, seen by the definitions in retrospect only.
Point is that thus far there are no flags being thrown by the social media types that a bear market has started. Rather than the value class of shares, the economic cyclical companies will save the bull market in the face of the previous leadership being sold off.
The markets from the start of 2021 have given many warnings, price-based warnings overlooked by the
March 23, 2021
Volatility Reports 3/24/2021 Gold/Dollar
Gold entering a waterfall decline
The gold market from the panic high on August 6, 2020, a double top and a terminal thrust from the massive multi-month horizontal triangle has been drifting lower since. That drifting has been in a near-perfect descending channel, as you can see on the two middle chart windows, the weekly bar.
March 18, 2021
Volatility Reports 3/18/2021
Good things come to those who wait.
The same patience it takes to ride out the cycle of a cyclical bull market is also required when waiting for the time to move to cash, which began at the end of 2018 and 13 months ago. It also takes a high degree of tolerance for the all-important hedge trades, especially if you are always in the markets, which would otherwise put you and your clients at risk for a 30% to 80% drawdown.
The Long term T-bonds peaked in March of 2020 on panic buying – as outlined by TEM reaching an extreme rule #1 – it still took over five months for the downtrend to cause a MA crossunder; and not until the last 45 days to move out of low gear in the rate of descent.
March 7, 2021
Volatility Reports 3/8/2021
Social Media Mania
In the past week, since the peak was put into place 2/24/21 by the Dow, the social media market content providers have been busy seeing the market through rose-colored glasses. From February 24, I found one bear in 70 Twitter posts and a fair number rationalizing how higher interest rates were bullish for the economy, hence bullish for the market, which by itself is incongruous.
March 3, 2021
Volatility Reports US Dollar 3/4/21
The Dollar Is Dead; Long Live The Dollar
There are so many false theories and narratives about the dollar and other assets; they are not worth debunking. Advisors and managers should consider the source and the underlying assumptions used to propagate and regurgitate social media content.
To cut through the fog of misinformation, Contrary Thinker listens to the market. The two middle chart windows contain our I-T trend following systems both on buy signals in terms of direction. What gives the most recent buy signal some punch is Technical Event Model’s (TEM) setup. The weekly bar has %C on a spike, causing a technical event #2, calling for a dynamic trend. The chart on the left is TEM on the perceived risk data, which is on a new TE#2. The last time that happened, there was a 6% move that followed.