CT Journals
Volatility Report (click title for full report)
October 24, 2022
MarketMap™ 2022- Scenario Planner Issue#22
The social media mob is really perky after last week’s performance.
With the majority of commentaries that cross my desk, it’s clear most are moving away from doubt and have bought into the annual seasonal kick-off of a bull market that makes an average of 17% in mid-term election years, from the October low.
Comments range from off-the-seat-of-the-pants use of DMAs, “Highest close for the S&P 500 in two weeks, and just above the 30-day moving average.” Well at least he is unique, I hope he is not back-fitting.
“Positive RSI Divergence on WEEKLY SPX Chart = Bullish – This positive divergence has historically preceded meaningful $SPX reversals”
The problem is his scope is only from 2009 and RSI does not work that way. A deep oversold is a confirmation of a bear and because of its extreme oversold, each subsequent new low is expected to diverge. Hence making that concept (bullish divergence) useless and the most common weakness cited by experienced professionals.
Another bullish twist comes from a good source of market data and information. However, information should not get confused with knowledge and wisdom; and I am afraid to say their analysis.
The Stock Traders Almanac annual book (2023 version is on the market, $100 +/-) is a handy reference tool. The owner publishes bits in the social sphere like the table inserted below. The publisher points out that of all the months of the year, October stands alone, since WW2 as the seasonal bear market ender. In other words, that time window starts more bull markets compared to any other month. Can’t argue with that.
But what you find in almost everything you read regarding market data and market analysis is the unwavering bullish tone. Here is what I mean,
October 13, 2022
MarketMap™ 2022- Scenario Planner Issue#21
Nature of a bear market
“…good news is ignored, and bad news is exaggerated.”
After a top is in place there is indifference reflected by the public and media. Buy dips are programmed into behavior. However, with the smart money, the early adopter uses the mass of new entrants for liquidity to sell into. As the decline starts to pick up steam, the late majority average down their cost by buying more. The good news stops getting positive follow-through in higher prices because demand is overcome by supply. Good news leads to prices going lower and bad news accelerates the downtrend.
The structure of the bear is complete with its own forms and patterns, like one-day wonder advances: sharp and short-lived reversals that live for one to three days.
Fake news begins to propagate making headlines. Add to that all of the misdeeds, scandals and reckless speculation, and corrupt biz practices of the past upcycle come to light.
The overall mood of the unreflective
October 10, 2022
MarketMap™ 2022- Scenario Planner Issue#20
The “Time Factor”
Patterns and certain regularities are revealing themselves in the US markets. “Volatility Reports” posted in our LI Group demonstrated the 6.5-week cycle, and how it nailed the low on September 30, the day of the closing low thus far for the Dow but the Nasdaq made a new two-year low today.
A subcycle of that dominant cycle, 1/8 of it made the S-T top 6 days later on October 5. The chart of the small-cap index on the left has the lunar cycles noted with green dots for the high tide and red dots for cycle low. There is no claim to efficacy at pining down the precise high or low pivots but it does a 50/50 job providing a near-term idea for a change of trend. Moreover, when the high or low cycle is inverted, that failure itself is notable.
Two rules:
September 29, 2022
Volatility Reports September 29, 2022
Sizzle or Fizzle?
I never thought a headline phased as a question was a good way to introduce a news article or a research brief. A question reflects doubt, and I think readers want answers, not more questions. Be that as it is this morning, our pals at the “Seeking Alpha” mailer is headed up with that query, which I assume reflects the doubt permeating the gaggle of content-providing market observers.
Tie that in with other mainstays of the personalities on financial networks which have either given into bearish notions with observations that “late cycle” economic events are happening that preclude the beginning of a new bull market, or the manic sales type permeating the podcast airways and popping up on Fox business who has gone nuts over the revelation that he has found a relationship between Cryptocurrencies – the stock market and the US dollar. “if the USD would break below 103 it be like 2017.” If not it’s the bear city.
Well ok then, that ties into the notion of a breakdown finally after nine months of correction is the fact that the perma-bulls are giving in. Both on social media and cable channels and it’s time to run with the herd.
Well, let’s start with what we know, we know that a bear market while larger than corrections, still corrects something.
The people at Charles Swabb put it this way, “It’s called a correction because historically the drop often “corrects” and returns prices to their longer-term trend. Is It the Start of a Bear Market?
Well according to the compliant sell side phrase “Nobody can predict with any degree of certainty whether a correction will reverse or turn into a bear market.”
On the contrary, there is a risk in the market from here of 10,000 Dow points and it is correcting the FOMO buying that pushed prices into their ATHs at the end of 2021.
The featured chart here is annotated for anyone in the public domain to review. Members already have seen the additional details on how the Dow will get there when it will get there, and the why of the risk assessment.
With a high degree of certainty in Mid-May 2011 Contrary thinker told its people “off risk.” and this has not changed since that date. You will not hear anyone disputing this fact.
We suggested to our people to sell into rallies and hedge their accounts.
Contrary Thinker was provided the opportunity of a private channel on the Smartphone app “Trade Exchange” and we took it. Our market opinions and positions are our own and do not reflect the opinion of any of the principles of Trade Exchange, while we hope that they have made millions from the ideas
(click to enlarge)
With that said, from the ATH that we called in the NASDAQ on 11/19/21 our middle-risk big swing ETF bull and the bear trading products to date performance is on the left on the screen grab here.
For investors, hedge fund managers who want to reduce their cost of carrying the hedges, deep-in-the-money options traders, and aggressive traders who swing trade the futures here is how our trade ideas have done on a 100k account from November 2021
In the past 11 months, Contrary Thinker’s trade ideas on 100k made it into over $1 million USD today.
(click to enlarge)
Trade Ideas? We do things the old fashion way. Contrary thinker provides support and market analysis to form the basis of the trades and get that to our informed membership and LinkedIn private group members.
You are dealing with a team led by a veteran with over 30 years of experience and suggest that if you are not experienced and have a low threshold for account balance changes, you look elsewhere. If you can take a loss, all you have to do is get the app, pay me $10/month, and after that a nominal incentive fee only on winners greater than a preset threshold. I have to win for you to make money.
On Shore USA, yes? Use this URL https://tradeexchange.app.link/jack_cahn
Offshore go to your local app store and get the free Trade Exchange App, after installing it on your handheld, use the URL from your handheld device. https://tradeexchange.app.link/jack_cahn
Let me know when you are on board, so I can get you into the group.
Work up your own trade plan based on some of the best and most complete research in the industry.
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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 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.
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–Futures results are not linear they can be better or worse While confident, CT does not and can not by law make any assurances.
September 15, 2022
MarketMap™ September 15, 2022 #19
When you have the enemy on the run, in retreat, you must pursue them relentlessly.
Volatility means big swings up and down. The news media has picked up that word as its euphemism for a market decline. However, it is volatility that is the trader’s live blood as opposed to the lack thereof for the bull-only long-term investors that simply buy and hold.
If you have looked at enough daily bar charts with the 200-day simple moving average you will see that when prices are above it, the changeability of the market is low, it’s steady as she goes. However, once the market drops below the 200 day that is where all the action is for traders.
This featured chart provides a textbook example of what two very different long-term opportunities look like. The stats that are always quoted are from the 1950s,stating: “the S&P 500 has fallen >4% in a long bar 55 times. 49 of those times happened beneath the 200-day MA. As you can see, before 1950 the same truth applied, as 90% plus of all long bar days happen beneath the 200-day.
This Macro change in the context of the market dictates if one invests or trades (both long and short). If you are so indelibly programmed to think only in terms of investing, the next ten to twenty years will be a depression for you.
MarketMap’s primary cycle chart suggests the next meaningful low,
