• Background Image

    Volatility Report 12/21/23

    December 21, 2023

December 21, 2023

Volatility Report 12/21/23

Print Friendly, PDF & Email

Needed corrections in 2024 from Contrary Thinker

The key to winning is problem solving, opposed to making excuses.  For example, I was rusty trading options (deep in the money options) in 2022. The last time I traded options was in the 1987 crash when I made my first fortune. I only traded deep in the money OEX 100 options based on the advice of Dave Allman with Elliott Wave International in the late 1980’s. And trading guru Richard Diamond.

Even being rusty, I was able to turn a $100,000 account into 1 million and I could have done better. Another excuse is that futures are way different than options, the ability to use stops efficiently is true, but I still am making excuses.

The reality check hit in 2023, it was a punch in the gut, and an eye opener. The main issues are twofold.

Coming out of 2022 the expectation was the start of a major acceleration of the decline. In EWT terms, the 3rd wave, as seen in this chart.

The example on the left is near perfect and is called a leading wedge or a 1-2 series. they lead to hyper trends, the stuff that traders live for. What CT’s independent volatility model TEM signals based on the markets setup.

For new members, that set of indicators was is programed into day trading and scalping systems proven to increase the probability of a winning trade and the avoidance of dull directionless market.  It provides insights when the bar chart patterns are not there.

Back on topic, here is the problem the BTFD crowd will face when they meet head on the 3rd wave decline when it unfolds. Their oversold indicators will stop working – no or little bounce. They will be buying into what is unfolding as a high rate of change sell off that will end in a panic “V” bottom. As they say, “never try to catch a falling knife.”

 

So, one issue in 2023 was giving too much focus to the 3rd wave decline. As a team player and a trader, I do not want to be caught looking when the mega sell off is unfolding. Fortunes will be made.

However, the big number two item that needs to be corrected is what I pride myself on, hitting the low risk to no risk pivots in the markets. Missing a golden buying opportunity on October 28, 2023, was not greed or fear.

Here is my TradeStation™ chart of the Dow 30 that everyone who is part of Contrary Thinker recognizes. You have heard the rules repeated often about the four rules generated by the Technical Event Model (TEM.) That ninety percent of the time a TE#1 (rule #1) signals a “V” pivot or an inverted “V” for a top. The other 10% of the time it becomes a trend, as in a parabolic trend or a falling knives risk pointed out above.

My chart of the Dow highlights in read that low. What adds more clarity to it being a low risk to a no risk now is the TIME factor. The MarketMap™ calendar had been printed weeks before pointing to a panic low on October 28 to November 2 (see below.)

 

Look at no risk low October 27 and where the market is today

Luck favors the collective brain

I share the following story not so much for the self aggrandizement, but to get a message across on how you can improve your trading and now best to use the services published by Contrary Thinker. While a TA for Shearson Loeb Rhoades I used Joe Granville’s field method on his OBV. It gave a buy signals before the major breakout in 1982. But Joe in his newsletter remained bearish. We turned bullish and did not look back, until 1987.

I was mentored by Robert Prechter and his close friend Dave Allman in EWT. I was the TA for R. Rowland and Co. In July 1987 the wave structure of the Dow was completing a major 5th wave and a pivot was called for by Archie Crawford, Wall Streets best known Astrologer. It was called the The Harmonic Convergence for August 17-18 1987.

We nailed the high, all of my people that would listen exited the markets and went to cash. My firm ignored my warnings (which lead to their down fall and merger into Stifel.) When the October 19th panic happened it was at the end of a clear three wave event. The test of the lows held there was no new low hence no large five wave impulse to start a secular bear market.  Hence the unset of the next great depression was taken off the desk. But the folks at EWI stayed the course thus missing the bull market of the 1990s.

Option premiums went sky high and I moved on to futures trading until 2022.

The take away from the above is, panics are the end of moves. This is based on experience and the test results of my volatility model.  When TEM signals a panic, it is not the beginning of a trend in 90% of the occasions.

The other take away for you is the head of research is approachable. In that regard, I welcome your thoughts and ideas. I want to thank everyone for their support, I appreciate you. Special thanks to the membership that send me charts and messages and the DMs. Luck goes to the collective not the lone ranger. Unlike the fellas in the trading war rooms in New York and Chicago, we have the internet. I encourage you to keep in touch thorough the year.

 

Today 12/21/23 the first day of Winter.  The above Dow chart shows a high pivot finally being put in place 12/20/23

It also highlights a high probability setup by TEM. A new high late in the trend breaking above I-T resistance zone followed in a very short period of time by the model signally a TE#3. The visually indicator we’ve created automatically draws the vertical lines in color coded, red for panic (TE#1) and cyan for old (TE#3.) That configuration precedes both tops and bottoms in the vast majority, esp. when in a very short period.

Lets tie into that MarketMap™ has a COT today, a nesting of them you can find on our calendar. One note here. When Archie Crawford was asked why certain astrological events had a tendency to bring the market into that date. His answer was he was not sure they were just “strange attractors.”  He is truly one of the gifted TAs about, and this service calls them “Crawford Attractors,” and there is nothing strange about them.

I wanted to add one more chart to demonstrate the other two rules, TE#2 and TE#4. The chart seen here is a few days older but it provides a text book example of how the TEM give a signals to expect a parabolic trend. The vertical green line highlights when the forecast happened and the subsequent market action. These even numbered rules tell the trader, the market is “now friendly to a trend.

Unless you come from a systems trading background, you may have to shift a gear or gain a different perspective here from thinking in terms of predicting direction. A setup is predicting dynamics and is direction neutral. So through out 2023, every time I pointed out there was a TE#4, to trade the break when the market took out previous highs, you should have gone long, no matter what Contrary Thinker’s bias.

From an intermediates and long term point of view, the 2024 scenario will be in the next two issues of MarketMap™ 2024 with timing ideas. Issue four or five will be published after the first three trading days of the new year. My expectation is to publish the week end of January 5th. 2024.

Tactics

Tactics during the year end are rough. Moneyed traders take a break for the next two to three weeks. Market thins leaving it at risk to the whims of market markers and tax swaps. Another take away from 2022 and 2023 is be patience wait for the trades, they come to you.

 

All good things to us, and Merry Christmas
Get MarketMap™ 2024 Scenario Planner with two months of “Volatility Support and real time updates on your phone through LinkedIn for only $74.95 for two months and 249/Qtr. to follow, no contract required. Offer good until NYSE close Friday December 22, 2023
All of Contrary Thinker’s Advanced Indicators used in newsletters to your TradeStation™ for the year only $99.00 existing members Holiday specials reduced from $195.00. A year end special. 

 

 

New Membership, once a year deep discount

Sixty Five Percent discount ($49.84/Mo.) semi annual, new guys and gals only, Keep this rate for as long as you want. 

Sixty Five Percent discount for annual (43.75/Mo.) new guys and gals only, keep this rate for as long as you want. 

Contrary Thinker’s Membership Levels

Insuring your future in the global equity markets.

 

Team Level One (Junior partner) $99,995.00. 

Three-day personal meeting (Palm Springs CA or Mooloolaba Beach QLD, Aust.) Non-compete and non-disclosure agreement required. One-year mentorship.

Premier Membership,

Global market research publications: MarketMap-2023 Astro Scenario planner and “Volatility Reports”. Membership includes one on one mentorship and TradeStation addons of indicators used in Volatility Reports. Quarterly $539.00, Semi-annual $939.00, Annual $1689.00

Regular Membership,

Global market research publications: MarketMap-2023 Astro Scenario planner and “Volatility Reports”. Quarterly $495.00, Semi-annual $849.00, Annual $1494.00,

Membership Addon, TradeStation™ Advanced Trader’s Package (ATP) all indicators used in newsletters for $195.00/year

Trade Ideas smart phones and tablets, one time set up fee of $10.00, and $10/month to app provider (CC required.) Profit sharing fee structure see below.
Trade Station™ strategy addons

Advanced Trader’s Package (ATP) All indicators used in publications, good forever locked code. Include TEM, indicators, and user functions. $2,495.00

Systems locked code include TEM, indicators, and user functions. All systems package $9,995.00 or bought separately, $3,995.00 each.

Systems open code, all systems $$24,995 or $9,000 each (three swing traders off daily bars and three-day traders off id bars and three scalpers.) Open code TEM is only included in Team Level One.

The system of the month club

$45/month, $445 paid annually.

Private Support Group Only (must have a LinkedIn account as part of the application.) $25 set up fee and $10/month.

***All levels of membership include a LinkedIn support group, the “Strategy Collective” for Trade Station systems, indicators, and code. “Volatility Reports” LinkedIn group for real time market analysis and commentary. ***

Only one profit sharing criteria is set for each ETF and Long Put/Call trades

  • Profit >25% pays $25.00
  • Profit >50% pays $50.00
  • Profit >75% pays $75.00
  • Profit >100% pays $100.00
  • Profit>200% pays $200.00

***I only trade in-the-money contracts***

0 Comments

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!