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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.

 

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Chart Gallery Below

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July 28, 2022

Volatility Reports 7/28/22

The Fed has always followed the markets.

While many see the correction in the commodity market as the end of inflation, there are higher consumer prices on the way. The Fed will follow the rates going higher.
On the equity markets

I have found that when my good friends at EWI retreat from a primary call to a second scenario it is the alternate call that it pays to be contrary. They are one of the most followed market publications in the industry and provide mass amounts of liquidity.

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July 25, 2022

MarketMap™-2022 Planner for Crisis Alpha

Everyone trades volatility

The majority is almost always short volatility – long stocks and bonds managing risk via asset allocation/diversification

Yet, superior performance is rarely if ever stagnant.  Peter Lynch did more than put the Fidelity Funds on the world stage, but he proved that active management works.

It takes guts, vision, and execution after you realize that it is the process of timing the move to long volatility on either end of the risk curve that reduces risk and achieves Alpha.

Simple Question: why take a market risk for an average return?

Crisis Alpha is specifically defined as an uncorrelated return stream whereby the balance of risk and reward is skewed toward heightened market volatility without the constant negative carry associated with always being long or short VX in some fashion with portfolio insurance.

The fund that seeks superior returns through the use of crisis alpha should have a positive risk-to-reward ratio portfolio overall BUT with the best gains reserved for market crashes, such as in mid-2011 and during the financial crisis of 2008.

This may not be the Peter Lynch style and more attuned to a Richard Dennis or a George Soros, but here is what the Contrary Thinker wants its people to understand; and to some degree implement to preserve their client’s capital and achieve superior returns.

To beat the market the advisor, the capital manager, and the analyst has to use to some degree and proportion “Crisis Alpha,” the execution of trades that take advantage of either kind of tail risk.

Such investments are there to make doubles, triples, and better and with small risks based on good timing methods.

Focus on change of trends (COTs)

Bear markets have several distinct features that corrections do not. One is the inability to make new highs in the new year before taking out the previous year’s low. So getting beyond the simple definition of a decline that exceeds 20%, is adding to your body of knowledge.

This featured chart is a good example of a bear market unfolding based on that factor. However, the focus here is a change of the counter uptrend that started on June 16. I pointed out in the group that a change was hitting on Friday. Along with the diverse methods clustered in the COT table below, on this chart of the Nasdaq, the hot spots kicked off at the ATH in 2021 are Annotated on the chart.

They have all been highs except the late April date. The reversal on Friday was also coincidental with our Volatility Model signaling a rule#3, calling the S-T up trend old, feeble, and due for a change. Contrary Thinker does not believe in coincidences.

I shared this chart in the group for traders and advisors to have a head start going into the opening Monday. As mentioned in that post, the change will be affecting most markets over the next 10 trading days and there will be new trade ideas on Trade Exchange.

Bradley has really never been widely used or understood, his Son runs the outfit now and was trying the give away for free route early on and today he has realized it’s worth more than free.

The next featured chart is 95% of the model applied for the stock indices. I’ll let you do the little back checking if you like but the key is his model is pointing to a COT here in late July and early August.

The next featured chart is the crash of 1907

I had a breakthrough over the weekend with the help of a programming wizard. After I did this study and looked at the dates it generated back to 1850, the month and year October 1, 1907, jumped out at me because it was in the fall of the year that did the most damage in the Rich Man’s Panic.  The astronomical event that occurred on that date happens again in early August 2022 fitting in with the COTs expected by several other methods highlighted in the COT table.

On the chart, you will see the last six dates when a fall was expected. This study correlated with high pivots +/- 5 days, which I only saw early. Plus, only one out of the six was a miss. As I go to press, here are a few more, 9/23/2012, 11/20/2015,10/19/2017, and 12/21/2017. Out of the ten sited 8 got hits adding to the confidence of a renewal of the bear market near term.

Please do not waste your time trying to reverse engineer this one, trust me on that

All charts and tables enlarge to fit the screen with a click

The COT listed below in Mid-July was expected to invert. TEM provided rule#2 calling for an acceleration of trend after a breakout or a new trend following the signal. As posted the lows on the 14th were seen as the acceleration point of the larger downtrend. Instead, the Dow & Co rallied to new recovery highs into the next series of COTs 7 days later on the 21 of July.

Sometimes it is worth repeating that for trends to exist, oscillations need to invert. Hence if the downtrend is valid, and all evidence from, the trend following EWT to momentum internals, to short Volatility extremely oversold, and bullish sentiment from a contrary point of view supports the bears, the low on the 14 should function as an acceleration point.

When that low failed to hold the full 45-day cycle (6.5 weeks) should take hold, take the decline into the COT low due the week of September 5. that would blow through the COT low projected for August 12, the 3.25-week cycle

From the high pivot, the 3.25-week cycle takes the market into the 90-year anniversary low on 1932 August 12.

The reversals lower now will lead to long bar days between Aug 5-12 that exceed anything previously. By that, I mean from high to low the day’s range will exceed the longest declining long bar into that time frame.

A few events were moved or edited but not much. A COT is expected regarding precious metals, currencies, foodstuff, bonds, and the stock markets both here and offshore. 

Trade Ideas on your smartphone, for $10/ month plus a profit-only incentive. 

From an EWT point of view, the counter-trend is completed in textbook form and is tittering on a cliff. What you will see on the S&P chart below is a bar chart structure that looks like this textbook example from a real market. This textbook example fits the scenario MarketMap is expecting now.

There is no need to go into how each wave fits via Fib ratios to each other. But I will point out that the counter-trend from the June 16 low has traced out a near-perfect a-b-c counter-trend, where c=a and the retracement hit resistance near the .382 level of the entire decline.

Contrary Thinking Starts Here

Back Story 

5 Risks For The Rest Of 2022
Click here to view the original web page at 5 Risks For The Rest Of 2022
1. Summer Flash Crash
2. Major Fall Correction
3. Financial Contagion
4. COVID Resurgence
5. Unexpected Geopolitical Development

The author is confusing the market with the outside worldly causes the media would focus on. Be that as it may, he has not hit the extra-market risk that would be blamed for a further market decline.

Here is what could be the catalyst of a major problem in the USA. 

Garland Has to Prosecute Trump for January 6 to Restore Faith in the Justice Department

Click here to view the original web page at Garland Has to Prosecute Trump for January 6 to Restore Faith in the Justice Department

“As the January 6 Committee hearings reveal shocking evidence about Donald Trump’s efforts to overturn the 2020 election, pressure is mounting on Attorney General Merrick Garland and the Department of Justice to prosecute the former president. The public conversation has revolved around what are often thought to be two competing interests: Garland’s efforts to depoliticize the DOJ and his duty to uphold the law…”

“…There is no doubt that prosecuting Trump will be deeply divisive in the short term. It will exaggerate partisan divisions and likely lead to political violence. But not charging him will be worse. Letting Trump’s actions go without even an indictment would establish that laws don’t apply not only to sitting presidents but to former ones as well, enshrining them as somehow above the average citizen. Such a de facto acquittal would forever undermine the rule of law and tarnish the DOJ.

The prosecution of a former president should be uncomfortable for any attorney general acting in good faith. But the nation’s premier law enforcement officer shouldn’t let discomfort distract from duty. The sanctity of the electoral process is at the heart of a democracy. Defending the ballot, Congress, and the nation from attack should be the highest goal of the attorney general, integral to their oath to defend the Constitution. Prosecuting those who attack democratic institutions, no matter what office they once held, is the best way to restore the dignity and independence of the DOJ.”

Lindsay M. Chervinsky is a presidential historian and senior fellow at the Center for Presidential History at Southern Methodist University and the author of The Cabinet: George Washington and the Creation of an American Institution The Cabinet: George Washington and the Creation of an American Institution. Follow Lindsay on Twitter @lmchervinsky.

 

Contrary Thinking Starts Here

 


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 client’s 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

July 22, 2022

Volatility Reports 7/22/22

CT’s volatility model has reached another extreme with today’s open, a TE#3.

The pro-directional move based on the previous TE#2 has run its course with an S-T advance. Along with the trend change expected on or about July 21 +/- the fresh TE#3 calling the S-T trend old, feeble, and due for a change supports a reversal of the uptrend here.

Monday I pointed out that “Today’s open – from an EWT point of view has met minimum expectations for the counter-trend.”  Based on the same method, the price structure has traced out a maximum move as of the recent highs.

The previous scenario of the cycle lows inverting was wrong, yet at some point for the downtrend to become pro-directional, a COT low needs to be taken out and the full cycle from high to low to be one-way traffic. Hence based on the 6 1/2 week cycle (45 days) a low is projected for late August to early September, which fits the overall scenario outlined by MarketMap™ -2022 Scenario Planner in January.

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Today traders should focus on failures to hold the uptrend. Here are the triggers based on the futures contract.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Back Story

The Attack On Democracy In The 1930s And Today

Click here to view the original web page at The Attack On Democracy In The 1930s And Today

As fascism spread globally in the 1930s, the U.S. responded with a series of radio programs informing the public about American democracy. Jill Lepore, author of These Truths, talks to Steve Inskeep.Volatility Reports 7/18/22

Back Story

My “Wealth Disparity Monitor” of the Fed’s Money-Printer Era: Holy Moly. April Update of the Greatest Economic Injustice in Recent History

Click here to view original web page at My “Wealth Disparity Monitor” of the Fed’s Money-Printer Era: Holy Moly. April Update of the Greatest Economic Injustice in Recent History

The wealthy got immensely wealthier. Everyone else paid for it via rampant inflation.

Become a Contrary Thinker, take the 45-day entry and save time and money, while your LinkedIn InGroup.

Membership 45-Day Trial

Stop and think, avoid risk is the best risk management. There is another 20% to 25% risk from here.

Great and Many Thanks

Jack F. Cahn, CMT

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s 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

–Futures results are not linear they can be better or worse While confident, CT does not and can not by law make any assurances.

July 18, 2022

Volatility Reports 7/18/22

Today’s close filled the gap open, that is an old fashion Larry William’s sell signal. The closing of the gap on the weekly bar after a Monday gap open on Monday’s close is a reversal signal.

Couple that simple and easy sell signal is the following posted in Contrary Thinker’s membership group on LinkedIn.

A major cycle is having an encore topping process how. The featured chart below is a helpful reference.

The same time cycle hit with high tides cycles in January / February 2022 along with astrological trigger events between Mars and Uranus. this is not a Sunday newspaper astrology insert next to the comics, telling you how your week is going to be for your Sun sign. It is about earmarking calendar anniversary dates that repeat.

The span of the cycle is shaded in blue.

What is extremely noteworthy is the same cycle made a top in late 1999 / early 2000. A period many are drawing comparisons to, which is fine and valid. I have tied into that major top based also on the date of the ATHs are the same as the time window for the Great Bull Market’s high pivot 1/4/22 based on the Dow.

Contrary Thinker sees the market’s scenario more in line with the 60-year cycle panic of 1962, which also had its ATH peak in the same time window as the 2022 window.

The bottom line sustains, sells rallies, and uses bear market tactics on rallies. On the long side is the inflation macro. I have a number of requests for more insights into that major area, which will happen in the near term.

For our new members that like the Gold and Silver market, I will provide more details but for now, there is nothing pro-directional on the horizon until a key low pivot in mid to late August.

If you are one of our visitors who just received a DM from me via LinkedIn, regarding all the benefits of membership including group access, use the 45 trail to make sure how good Contrary Thinker can be.

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In the last issues of “MarketMap™ 2022,” I pointed out that time analysis (cycles) and TEM supported

“a high ROC trend and that (context) have been behind the market since the minor low on 7/5/22.” and “what the market has shown thus far, I would view it as disappointing.”

If I was a bull, which I am not.

I went on to say that “A reversal here…should lead to a decline that does not stop at the July 18 COT and all hell will break lower into the August 22 COT.”

I discussed what most advisors, managers, and traders miss because they think in terms of “absolutes” and if the signals are not “pitch perfect” they are not up to snuff.”

What they are missing is to see the “failure” as the signal of the reversal, how else can there be trends, unless they break the current wave of cycles or oscillations.

That is precisely what we are witnessing here, from the mid-June low the market is locked in a trading cycle, a range. After a trend ranges are frustrating to most traders.

That brings me to the intent of my Volatility Model the Technical Event Matrix. It provides leading signals on these market conditions. The chart for all four majors was posted here last week and it still says “play the break!”

In other words, the background (tension) behind the market will sustain a high rate of change trend once the primary trend takes hold again.

Today’s open – from an EWT point of view has met minimum expectations for the counter-trend.

 

Membership 45-Day Trial

Stop and think, avoid risk is the best risk management. There is another 20% to 25% risk from here.

Great and Many Thanks

Jack F. Cahn, CMT

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820 or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889

— Contrary Thinker does not assume the risk of its client’s 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

–Futures results are not linear they can be better or worse While confident, CT does not and can not by law make any assurances.

June 24, 2022

“No Free Lunch” Milton Friedman

“The times they are a changing”

I have pointed out that good market research provides insights into the change of trend (time) and dynamics of the trend (context) and direction of the change (price). The problem comes when the market’s vibration (oscillation) changes. When an expected low happens but from a strategy point of view you have tightened up your profit-stops protecting profits yet have to provide a smaller profit as opposed to taking a larger profit when the change was expected.

The problem is – as you will see in the chart- at some point when the trend is expected to change point (in terms of time, price and dynamics instead it will be an acceleration point, which is what we are in the game to capitalize on. In other words to max out the profits.

CT pointed out going into this week – with a redraft and update regarding one-day wonders and suggested the COT should produce a rally and potentially a one-day wonder. The market gave us what we expected and in panic buying, (poor) right into MarketMap’s change dates expected next week.

The featured chart here shows the 60-year cycle side by side. Moreover, the way a bear dies is when investors are throwing stock away at any price. I’ve highlighted that in the 1962 chart. That capitulation has yet to happen in 2022.

And no humankind has not evolved beyond being human and it will happen again. What the 2022 bear market has done is cashed in 14% or higher in profits while not getting the media’s full negative attention or the public’s with the AAII cash vs stock holdings is still near historical lows.

https://contrarythinker.com/professional-network-best-offer/

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June 19, 2022

Volatility Reports 6/21/22 (Video)

Open positions tied into the market’s position

A 20-minute video covers all open positions, how to use the respective trade idea products, clues on doubling down, and the strategy we are looking at this coming week.

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June 19, 2022

One day wonders dominated in 2008 & 1932

People that know market history invest with an unfair advantage

Going into the new holiday Monday, June 20, 2022, I thought it is time to post a historical brief from my collection. A historical brief was published one day after a one-day wonder of 2.2% on the Dow in the fourth quarter of 2018. Contrary Thinker had called for a top and a correction at the end of September. But after the one-day wonder on the 16th of October, the bulls got their bravado back. Their timing was wrong.

I refer members to a video they will have access to shortly that reviews the market’s position along with all open trading positions and expectations for the next three to four weeks.

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June 5, 2022

Volatility Reports Commodity Based Inflation

The perfect storm is a combination of unfavorable circumstances that come together in the same time frame.

Today, the lid that was over what world because of the pandemic has lifted for better or worse, putting increased demand on goods and services.

The “build it back better” program was needed more for American infrastructures and to advance the transition to new clean industries.

Supply chain bottlenecks, primary in China with covid shutdown; and Black Sea blockade.

The invasion of Ukraine by Putin has cut off both oil and gas supplies adding to the pressure on the supply and demand equation.

Some intermediary companies are hiking prices more than the rate of the wholesale prices under the fog of media hype.

Drought in numbers 2022 – Restoration for readiness and resilience

Source ODHA Posted  

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May 21, 2022

Volatility Reports 5/23/22

Black swan events are a metaphor for an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact.

 

Back in 2013 when the Fukushima earthquake hit Japan there was a market incident where implied volatility on the Nikkei Dow jumped as high as 45 intraday in April of 2013. During that event the Nikkei Dow sold off with the Japanese government bonds selling off as well, hitting a 1% yield to maturity.

These jumps or spikes in volatility are short-covering rallies in the majority because the industry and public do not venture into trading for a bear market or a black swan event.

Rather the institutional types find a way to achieve a higher than average return by selling risk, they sell short the VX futures or the call options on the futures or some combination.

Add to that the dealer community being extremely short in volatility exposure and they have to buy it all back at once causing the spike.

The “bulletproof” mob that promotes the 60/40 split portfolio, they are faced with an interesting and inconvenient truth regarding modern portfolio theory (MPT). That is bond prices do not always move in the opposite direction as a stock market MPT has been built on the basis of an anti-correlation between bonds and stocks, which historically has proven untrue.

It is possible, if not likely, to enter an environment where stocks and bonds

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