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CT Journal
Volatility
February 25, 2020
Volatility Reports 02.25.20 Risk Markets and Hedge Tactics
While there may be a new shallow set of parameters to new buy dips with the goal of holding for new all-time highs, there are no signs of a meaningful bottom here
The short term volatility model is only showing the Dow hitting a panic event while it was entering I-T support. In a vacuum that is a sign for a snapback today, but follow-through is doubted.
All the markets after yesterday’s decline look very similar so the Dow is as good of a proxy as the others.
From the left, OB/OS readings remain overbought after the 3 1/2% sell-off. It is also easy to see the shallow – buy dips – in the uptrend via the weekly chart. I highlight each with a vertical green line. The low-risk buy is highlighted in red, a situation which does not exist today. In fact, our twin paid of oscillators are not even modestly oversold.
On a S-T basis, the daily bar, CT’s panic index has hit 70.57 and our twin oscillators are modestly oversold and in gear.
In MarketMap-2020 I pointed to the early February low and a mid to late February high. The date range for a low was the 5th to the 9th and for the high from the 16th to March the 2.
The tidal cycles will be flipping over to point lower today and Wednesday for the stock indices. A recovery today or tomorrow should be greeted with additional selling.
Lastly, once a low is made it will be tested within days before there can be much confidence in its ability to hold, short term.
Short term the decline is expected to continue into the early March period, with the 9th and 10th being ideal.
If this is the first leg down of a new bear market, do not expect a larger down day than witnessed yesterday.
Long term investors and capital managers should be in cash or two-year notes. More long volatility ideas on the way.
Great and Many Thanks,
Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
Copyright 1989-2018
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November 20, 2019
Crude Oil Waiting on the Break
Gain Better Control of your Strategy Engagement with CT’s Technical Event Model
As an example of strategy engagement, the use of the popular and highly reliable horizontal triangle. One of the main reasons some traders don’t do well in the markets is their inability to wait. A key strength of all great traders you will ever read about.
Please, if you know an active day trader who trades daily and is doing what Soros has or what Trout has or Dalio let me know, I will give you a free subscription to VR for 6 months.
In any event, this chart of the crude shows the horizontal triangle we have been watching for a few months. First, Contrary Thinker is not engaged in trading Crude here. That does not mean some systems are not working and some that are working very well.
Key I-T R&S Zones for break
The following numbers are from my %BB-DBR trading Crude Oil. Over the last ten years made 325k with contract management. That’s all good, and that is how the groundbreaking systems development began back in the ’90s and progressed into the first decade of the new millennium.
Today, however, system trading is more sophisticated. It is more like the way most investors and traders think anyway. They make a forecast, and after they have a forecast, they believe they come up with a trading plan – a strategy – to take advantage of the forecast. They typically do this without a highly accurate dynamics forecast and have no timing for the forecast.