CT Journals
Volatility Report (click title for full report)
April 10, 2023
Volatility Reports 4/10/23 Technology
Could there be another fantastic opportunity like 1974?
Some in the investment business go a little punchy when they try to imagine the Dow at 575, not just once but twice at double the bottom in 1974. Wow life was great, the IPO market was the best opportunity. Some of the big names went public around that time. Some are still around, like AMEX and FedEx; and some are not like MCI Communications bought up in pieces.
Today in 2023, the early part of the new decade, the growth process will be the same as it was going into the eighties. Part of it is in the headlines now with the major oils buying into shale oil companies.
That restructuring will happen as well in the broad technology area, which feeds into every facet of the infrastructure and economy.
Progress is always dialectic, or else society and culture fall back on itself. If you are moving ahead, it is toward the antitheses – the destructive stage- way before the new end-user products make headlines.
March 27, 2023
the Buzz
To everything there is a season and a time to every purpose under the heaven:
A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted; a time to kill, and a time to heal; a time to break down, and a time to build up; a time to weep, and a time to laugh; a time to mourn, and …
December 2019 marked the beginning of Solar Cycle 25. The Sun’s activity has quickly ramped up and even though we haven’t reached peak levels in this cycle, the Sun’s activity is already exceeding predictions. Solar events will continue to increase as we near solar maximum in 2025, and our lives and technology on Earth, as well as satellites and astronauts in space, will be impacted.
A More Active Solar Maximum
During the Sun’s natural 11-year cycle, the Sun shifts from relatively calm to stormy, then back again. At its most active, called solar maximum, the Sun is freckled with sunspots and its magnetic poles reverse. (On Earth, that would be like if the North and South Poles flip-flopped every decade.) During solar minimum, on the other hand, sunspots are few and far between. Often, the Sun is as blank and featureless as an egg yolk.
With more activity comes an increase in space weather events including solar flares and solar eruptions, which can impact radio communications, electric power grids, and navigation signals, as well as pose risks to spacecraft and astronauts. We have an increasing dependence on space-based technology and ground-based infrastructure that are susceptible to the dynamic nature of space. For many new commercial and government stakeholders, this already stronger-than-expected solar cycle will be the first they navigate.
During Solar Cycle 26, the GDC mission will be able to provide valuable insight that isn’t available during this solar maximum. By Nicola Fox, Director of NASA’s Heliophysics Division
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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.
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Contrary Thinker since 1989,
Copyright 1989-2023
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92264 USA. 760-459-4681 OR
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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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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 1989-2022
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR
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.
— 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
— Privacy Policy, we do not share your information with third parties. Full policy details here.
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.
January 24, 2023
Volatility Reports January 25, 2023 (Video)
Anticipated changes can be more forceful than events happening out of nowhere.
The chart above shows the correction that happened when the last so-called “budget crisis” happened. The pattern is similar to the 2022 sell-off and the second half recovery into a double top the 12/1/22 and 12/13/22 tops. If a valid fractal, the decline that is forthcoming will be a waterfall…
…but as experienced traders you know to expect something similar but different based on the rule of alternations. So what could be different? 2009 just finished a 3-year bear and put a cap on the WFC. Two years later we were bullish but could it be that this time it’s really bearish not leading to recovery after the mini panic on 10/4/11?
