CT Journals
Volatility
March 6, 2023
Volatility Reports US Treasury Bonds
Long-Term Bear Market in Top Shelf Bonds Persist
Details from Bloomberg
- The US accounts for the greatest volume of distressed debt in the Americas
- The media sector had the greatest amount of distressed debt as of the latest week
- Bausch Health Cos. had the most distressed debt outstanding of any issuer as of Feb. 17, data compiled by Bloomberg shows
- The media sector had the greatest amount of distressed debt as of the latest week
US Treasury Bonds
The pendulum swings from extreme optimism to extreme pessimism. For the life cycle of the market, nothing has changed. It doe not matter if you start your analog correlations from 1950 or from 2000 or start at 1854 the market’s life cycle will never change.
The bonds along with most others have corrected the emotional buying highlighted in red on the monthly bar. Only the Risk markets have not yet made adjusted for the profit chase post-pandemic liquidity injection.
The bonds have only made it halfway through their major bear with par as the next target and a measured move sees 86 on the 30-year bonds.
All trends are down, and the set-up model (TEM) supports the trends in motion long-term, Intermediate-term, and Short-Term. Refer to the annotations on the chart, just click to enlarge.
US Bankruptcy Filings Surge At Fastest Pace Since 2009
Click here to view original web page at US Bankruptcy Filings Surge At Fastest Pace Since 2009
For the past year, both the Biden White House and the Fed have been desperate to usher in a (mild) recession in the US to break the back of runaway inflation and the wage-price spiral with little success. But judging by the surge in bankruptcy filings, they are about to get their wish.
One month ago, when looking at the recent pace of large bankruptcy filings (those with more than $50MM in liabilities), we noted a troubling trend: in the first month of the year, the number of US bankruptcies topped 20, the highest in any other January dating back to 2010. Back then, 25 filings were seen as the economy was still reeling from the aftermath of the GFC.
The spike in defaults was not a fluke, and according to Bloomberg data, one month later – as of the end of February – no less than 39 large companies had filed for bankruptcy in the US so far this year, as February’s pace matches that of January; the YTD total represents the fastest pace of companies filing for bankruptcy since the immediate aftermath of the global financial crisis in 2009. By comparison, US bankruptcy courts had seen 63 large filings at this point in 2009.
Last week’s seven large filings — those tied to at least $50 million of liabilities — include the liquidation of generic drugmaker Akorn and the Chapter 11 filing of Covid-19 testmaker Lucira Health
This year, some of the most notable bankruptcy filings have been festive retailer Party City Holdco Inc, mattress maker Serta Simmons Bedding LLC, and cryptocurrency lender Genesis Global Holdco.
The pile of dollar-denominated corporate bonds and loans in the Americas trading at distressed levels rose to $237.2 billion in the week ended Friday, about a 1.63% increase from $233.4 billion a week earlier, according to BBG data.
- The media sector had the greatest amount of distressed debt as of the latest week
There are four issues that combine into a comprehensive market analysis, forecast, and strategy: price, time, dynamics, and sentiment.
None of Contrary Thinker’s competitors includes all four in their product and strategy. If you know of one, let me know and I will give you 45 days free, else take the trail or get the Trade Exchange app.
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February 17, 2023
Volatility Reports 2/17/23
Bull Market in Fear, Not Today.
Unlike 2010-2013 the market is not discounting the next 2007-2009 market crisis. Rather they are focused on statistical inference. After three down days in a row and I-T MA systems giving sell signals Anthony Scaramucci is widely quoted by content providers on Twitter that “The S&P 500 closed today at 4147.6, above its 200-day moving average for the 18th session in a row…” and
“No prior S&P 500 bear market in history has made a new low after making 18 consecutive closes above its 200-day average…”
So absolutely there is no concern among the bulls, without considering each case in its own context.
To be clear, if you are a bull, you are short volatility.
Traditionally it is thought that the alpha from active management comes down to two factors:
(1) asset selection and (2) short volatility or short correlation exposure.
The problem is that when markets become more correlated, asset selection becomes increasingly irrelevant. As in all risk assets and subgroups move in the same direction. Bitcoin is up, commodities are up, stocks are up, and bonds are up. The only thing that remains is the short volatility exposure to beat the benchmarks.
Many classic active management hedge fund strategies derive a lot of their alpha from simply being short volatility and short correlation. Long–short strategies operate in this way, as do relative value arbitrage strategies.
Even buy-and-hold, classic value investing is synthetically short volatility. In fact, one of the components of replicating a short variance swap is buying on lows and selling on highs—that is, actively timing the market.
This is the task of Contrary Thinker, timing the market and improving results based on experience.
The chart on the left reveals two key facts. Both the S&P and Dow rolled over after three down days and gave a trend following a sell signal.
Whatever idiom you like, ” Kill or be killed, move it or lose it, puff it or pass it, cook or get out of the kitchen. Just don’t stand in line order or get out of line. It’s your time to move your business to the next higher level. Start on the SmartPhone at $5/month, and $10/month.
The other fact is the new sell signal is supported by the setup going into today with the volatility model seeing the context as tense and ready for a trend, a TE#2. The timing for the low is outlined below based on Market Map studies.
The “Time Factor”
February 6, 2023
Volatility Reports 2/6/23 Video Stock Averages
Sex sells!
It’s true, from the six-pack shirtless men in the 90s advertising Coke to the pretty faces of today. Well, look at the coke ads from day one over the generations, nothing more American than apple pie, mom, and a Coke-Cola.
Sexy also reflects confidence. I would imagine that many outside of social finance would see the background of sexiness as meaningless for the direction of stocks. Furthermore, I am sure that anyone that sees themselves as skillfully navigating the markets today sees himself as more evolved than the man of the 1930s.
Bulls in Love with the Dow at higher levels of bullish sentiment than when the Dow was at ATHs.
But the “Hemline theory was allegedly launched by George Taylor, an economist at Wharton who
claimed in 1926 that in booming economic times many women raised their skirts to show off their silk stockings.” After the roaring 20s, the Great Depression subsequently set in and hemlines fell to the floor once again.
So that’s all good and fine but you may ask what does that have to do with today? Well two rules, if you will. If some hemlines fall to the floor, they cannot go any lower implying the market is in the time frame of an important low.
On the other hand, when hemlines go up so high they cannot go any higher, the market is within the time span of a major high. CNBC in 2010 over a year from the important low John Carney Senior Editor, CNBC.com wanted to put the economy as the cause saying in 2010″the current economic crisis predicts ankle-length shirts around 2011 and 2012″ John is now at Breitbart.
Sports Analogy
From action to dull trade, from motion to rest. The market is like batting against Bob Gibson or any other Cy Young award winner. They throw the fastball ten times, a few times to bruh you back only to catch you looking with a change of pace.
This is a 12-minute video “Volatility Report” 2/6/23 for members and visitors only.
Keep in mind this is not a public stream.
There are four issues that combine into a comprehensive market analysis, forecast, and strategy: price, time, dynamics, and sentiment.
None of Contrary Thinker’s competitors includes all four in their product and strategy. If you know of one, let me know and I will give you 45 days free, else take the trail or get the Trade Exchange app.
Whatever idiom you like, ” Kill or be killed, move it or lose it, puff it or pass it, cook or get out of the kitchen. Just don’t stand in line order or get out of line. It’s your time to move your business to the next higher level.
***Start on the SmartPhone at $5/month, and $10/month.***
Contrary Thinker’s Channel Code WRKZ0
January 31, 2023
Volatility Reports 1/31/23 Traditional TA on Primary Indices
“When everybody thinks alike, everyone is likely to be wrong.”
The ten words quoted above are, according to Humphrey B. Neill, a potent factor behind all economic booms and busts that blight our civilization.
Whatever idiom you like, ” Kill or be killed, move it or lose it, puff it or pass it, cook or get out of the kitchen. Just don’t stand in line order or get out of line. It’s your time to move your business to the next higher level. Start on the SmartPhone at $5/month, and $10/month.
December 21, 2022
Volatility Reports The Financials (Video)
The facts have been ignored since 11/6/2016 and the market screaming to be released from the financial and volatility repression became clear from the peak 1/23/2018. From that point to today, traders have played nothing but long volatilioty vhencials and out performed the S&P by a wide margin. Are you ready for 2023, All Contrary Thinker wants is to back investors, managers and traders to reach their best.
December 10, 2022
Volatility Reports Long Term Bonds (Video)
Kiplinger’s Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or for more information. Fed Chair Jerome Powell offered investors both good news and bad news at his press conference on Nov. 2. The Fed’s policy statement included new language that it would consider the effects on the economy of previous rate […]
Click here to view the original web page at Interest Rates Likely to Continue Climbing
The Long Bonds
Before you get into the video on the long-term outlook for bonds and how to use the new excel worksheet for cycles, here is a short-term update I started in the group. If you are a visitor and have signed up on the TradeExchange app, let me know. In that regard, they are in the process of updating my UI and dashboard, make sure I know so you lock in your spot here in the group.
Unless you tell others that Contrary Thinker can make good calls, I have to continue to point them out. At the end of 2018, I warned the boys from Boston, the capital of the mutual fund factories, that the so-called “bulletproof” portfolio (60/40) would come to an end with the same kind of “hyper-correlation” seen in 2008.
Well after the first six months of 2022 all they are doing now is belly-aching about the 60/40 demise. Well, that is all well and good but in this industry, it is always about “what have you done for me lately? The updated chart featured here should help.
For equity players, it demonstrates how the bonds are leading the downturn. There are other leading markets, but this one has a broad economic impact. with that in mind, CT’s featured chart demonstrates the way the bond market speaks to you, once you understand volatility. Here I will point out how rule#3 preceded COTs by a day or two at the August high and the October. TE#3 is the definition of a low-energy trend that is due for a change. The trend lower walked the smoothed BB lower on the middle TE#3 with the help of an intervening TE#4 supporting the trend.
On Friday the decline in the 30-year futures was a failure, a reversal, and an S-T sell signal. With the TE#2 behind it, a move to 124 should unfold. That corrected the panic buying, retraces 62% of the counter-trend thus far, and moves below the smooth BB, which is an oversold signal.
Dates are highlighted in this chart that can be used if you plan to use the excel cycle worksheet.
Enjoy the 15-minute video, the other five are on the way.
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.
