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    CT Journals

    Volatility

September 18, 2022

Volatility Reports Crude Oil 9/19/22

Contrary Thinking is not about being contrary just for the sake of being contrary.

 

Sometimes you have to run with the herd and follow the trend. Looks like Fidelity is sounding a tad bearish. One of their leading managers posting in the public domain, “The fact that low beta (utilities) and late-cycle (energy) sectors are leading (showing superior relative performance ) tells me that this is not (yet) a new bull market.”

The parenthetical is my needed explanation, as bulls always think that going down less than the average means “leading.”

Is $60 a barrel from here before the end of the year possible?
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August 14, 2022

Volatility Reports Tension before Panic

Truth, like light, blinds. Falsehood, on the contrary, is a beautiful twilight that enhances every object.

Data points from the Twittersphere

1. “The Nasdaq Composite Is Back in a Bull Market” WSJ
2. Up 6 weeks in a row.. big intra-week buying each time {see CT chart}
3. Weekly Mkt Mood: Risk-On, Very clean risk-on week w/stocks, commodities higher and bonds and $ lower, VIX snapped its 1-yr uptrend as investors suddenly feel ok w/ 8.5% inflation, Many reasons to think though after ~150+ $SPX points more, it could all come undone,
4. S&P 500 has now reclaimed more than 50% of its bear market decline since January
5. Comparing the current S&P 500 rally to rallies in the 2000-02 and 2007-09 bear market’s 200dma.
6. Just putting this out there for people to see that for the indices (not individual stocks), declining volume is typical of advances like now. Reversal days, off a low, might show higher total volume, but don’t expect that for an up-trending market.
7. 50 DMA Disparity Index, the highest level since Oct ’20.
8. U.S. tech stocks are poised for their longest weekly winning streak since November 2021
9. There is no way prices from 20 years ago still matter, right? Information Technology Sector/SP (ratio) is hitting the same level as 20 years ago and being rebuffed
10. $XLF – Financials did well this week. 2nd best performing sector behind energy $XLE 11. On a relative basis gained some ground this week both on a market cap ( $XLF vs. $SPX ) and equal weight basis ( $RYF vs. $RSP )

Some of the posts lack a takeaway, like #2 “Up 6 weeks in a row.. big intra-week buying each time.”  It reminded me of the top on November 19, 2021 (closing high) preceded by six weeks of advance.

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August 7, 2022

Volatility Reports 8/8/22 Harbinger of Things to Come

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” George Soros

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July 28, 2022

Bear Market Historical Chart Gallery

The Nature of Bear Market, Panics, and Long Bar Days

When it comes to what a bear market is investors and traders don’t hear much. They may read that a decline of 20% puts the market in the bear market territory. but that is about it.

Professional advisors, managers, and traders need to know the signs of a major peak, and the personality of the decline as it goes through its phases. We need to know what to expect, how to differentiate early between a bear and a correction, where panics fit in with the long-term decline and all bear markets don’t look like 1937.

Here is a chart gallery of bear markets from the 1929 event to date. Analysis of each chart to follow with an excel file download containing all the data for bulls and bears from 1900 to date.

If you are not a Contrary Thinker, here is your chance to access this report and chart gallery, the excel file, and six months of membership which includes MarketMap™ -2023 and all issues of MarketMap™ -2022 to catch you up in one fell swoop.

 

Six-Month Membership $425.00

 

Chart Gallery Below

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May 9, 2022

Volatility Reports 5/9/22 Risk Assessment

Fidelity Investments TV Spot, ‘The Planning Effect: Future Generations’

Feature this scene: A couple enjoys a gathering with loved ones. An ad reader comes in to explain that the event represents how it feels to have financial assurance and a wealth plan with the right balance of risk and reward will get you there.

Traditional thinking by the industry purporting risk and reward are somehow a balancing act. The higher the risk the higher the potential reward, which is a bunch of tripe While I can’t expect everyone I contact to understand this, not everyone sees like Paul Tudor Jones or George Soros or Stanley Druckenmiller.

But, I can expect a few of you to get it, break out of the envelope the industry has made for you to understand you can take 10% of your investment account – for one tactical example – invest it with timing in low-risk high reward trades. Make 300% plus on that 10% of your account therefore 30% on your entire account, beating the market’s average buy and hold return of 11% per year where you will need to ride out bear markets.

Select trading ideas on your smartphone that finds lower risk higher reward trades with the above policy in mind.  Only $10/month plus incentives for winning trades that exceed a predetermined threshold.

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May 2, 2022

Volatility Reports 5/2/22

If Providence is the basis of seeing the future, does it follow that the majority of vendors on Wall Street are atheists?

“We will only prosper if we relentlessly search for nothing but the truth, otherwise the truth will find us through volatility.”

MarketMap™  issue #12 outlined the scenario that persist since January 1, 2022. The topping process began in mid-May and many shares made their nominal highs in the second half of 2021 and with the Nikkei topping on 9/18/21 and the US averages peaking with the FAANG Index on 11/4/21, the Russell on 11/8/21,  the leadership average NASDAQ 11/19/21, and the Dow and S&P 1/4/22.

Ahh, the world is not perfect and confuses some Perma bulls, please excuse the snarky comment, but if you are more than a manager of a mom and pop account for the long term and the thought of common stock or the market gives you a brain cramp, maybe you should be a buy and hold and learn to suffer through the max drawdown.

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April 17, 2022

Volatility Reports 4/18/22

“This is it make no mistake where you are..”

While the bulls could try to pull an Easter bunny out of their hat, the Contrary Thinker does not see their ability to do that here.

The top chart of the SPY has the diffusion index under it which measures the new numbers of new 52-week highs vs new 52-week lows.

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April 3, 2022

Volatility Reports 4/4/22

Everyone remains bullish, it’s literally in every Twitter Facebook, and LinkedIn post.

Social media post content and full-length articles remain bullish. One out of ten headlines or titles is a “got to buy something” suggestion; even the bears are buying utilities. The notion of having to be invested all of the time has not abated and until it does the pool of late money buying “something is wide and deep for pockets of big profits to sell into.

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March 28, 2022

Volatility Reports 3/28/22 “The Bust”

How can something come from nothing? Or what happens when a one billion dollar industry goes bust?

The Dot.Com Industry did it, 22 1/2 years ago when that industry chased up the advertising cost on the SuperBowl broadcast to make a “brand” for themselves. All of that led to a bust.

The dot-com bubble was a rapid rise in U.S. technology stock equity valuations fueled by investments in Internet-based companies in the late 1990s. The value of equity markets grew exponentially during the dot-com bubble, with the Nasdaq rising from under 1,000 to more than 5,000 between 1995 and 2000. Today the Crypto Industry has done the same thing and worse it has produced an industry with no economic benefit and produce what they call an asset – something with value – out of thin air.

Blockchain technology is not revolutionary and disruptive except in the sense that it has taken to a whole new level the gullibility of just not the public but the professionals that have fallen in behind it. This new industry is nothing more than a meaningless marketing term representing an overhyped concept.

Unlike the smartphone and other high-tech gadgets, the world of crypto is living on a dream on the left-hand side of “the chasm.”  There are many reasons why they will call fall into the chasm. One is volatility which makes it impossible to regard Bitcoin and other cryptocurrencies as useful for anything other than speculation. NOT a replacement for a fiat currency as they have promoted from day one.

Besides being too changeable that the merchant would have to have such a wide bid to offer spread to cover their risk the market will not accept it until it becomes STABLE, which is not going to happen, until after the crash, when markets go flat after a dead cat bounce.

Furthermore, the big tout was limited supply vs the worldwide float of fiat currencies. Two key problems with that are the crypto factories do not have the full faith and taxing power of a government to back up their so-called coins. Plus there is no limited supply as there are opportunists every day making these things out of thin air to the extent that there are more than 10,000 cryptocurrencies in existence, and more coming every day.

All over social media and financial news, they are throwing around the idea of contrarian like it’s so easy to be one, while the bullish following on BTC&Co is cult-like and they are holding on for dear life, either to the pseudo investment or to their opinion.

All the “line drawers” that call themselves analysis in the Tweetershphere are rabid about a breakout they see in this market. Rather, the breakout is a little post triangle break that is finishing a simple correction retracing a Fibonacci 38% of the decline.

What is keen about the advance is the time factor is for a reversal today and for cycles to pull the market lower into a minor low mid to late April. 

It’s a phenomenon I have seen since the gold and oil boom in the early 80s and investors and traders – after they crashed – were still holding on and wanted to buy more twenty years later. At the beginning of the 1980s, inflation was a “way of life” and was never going to go away, never.  How the long cycles impact the markets. Today the crypto cult is even ignoring the downtrend and the underlying facts that they are actions are based on greed, and nothing rational.

The bigger problem is what happens when a billion-dollar industry goes bust?

“…both fiscal and monetary policy has painted America’s economy into a corner, a corner that has no alternatives that are positive to bail out the market and the economy when the next down cycle occurs.”  There will be no soft landing. 

So the cycles from the 2020 crash are now translated out a few years, they kicked the can down the road. But the Fed seems determined to bring things “back to normal.” Yet everyone knows that the market does not care about that. Crammer confirm that on his CNBC

I just watched a 3-minute video of a Crammer rant self-contradicting himself along the way and he’s happy with the bear market being over and what everyone is focused on “greed”.

From Covid19 in China, the Fed’s more hawkish rate policy, the price of oil, and the rate of inflation plus the war in Ukraine. The Russian threat of escalation. But the market since the invasion started on the 24th of February does not care.

So what are we missing? BTC&Co going bust.

Key stocks on the monitor list as leading indicators of the industry getting ready to puke are

The key market players are listed in the report with their revenues, sales, and strategies are Advanced Micro Devices Inc., NVIDIA Corporation,  Intel Corporation, Microsoft Corporation, Coinbase Ltd.

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Country Thinking is about letting go of traditional ways of thinking, the commonplace that no longer serves you well in investing and trading. Building from the truth, from first principles the robust into anti-fragile. Thanks in advance for your consideration, I look ahead to working with you for the duration.

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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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

March 20, 2022

Volatility Reports 3/21/22

Meaningless Facts

Without context analogical inferences have little meaning. From the get-go, analogies have a handy cap of no grounding in first principles.

So, after 2 ½ months of a downturn, the majority of retail types are grasping at straws confusing time periods and purporting long-term implications from short-term models.

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