Volatility Report (click title for full report)
March 31, 2021
“All things are poison, and it is the dosage that makes it either a poison or a remedy.”
The bottom line is anything in excess will kill you sooner or later. No one needs to tell Powell or Yellen this; the facts are the road back to normalcy will be a rocky one.
The S-T two-week tidal model used by MarketMap-2021, our scenario planner, has been accurate this year when contained within this ascending channel since the March/April 2020 low. The first chart used today shows the easy “in on the open out on the open” two-week cycle filtered by our “Alpha Trend Tracker.” Available now on the TradingApp Store of TradeStation, includes CT’s publications. http://bit.ly/AlphaTrendTracker
The tidal cycle without filters is reliable for backing the trader up with his S-T bias and keeps him on the front foot when to expect change. More on that in the newest issue of MarketMap-2021 Scenario Planner coming soon. It is a critical tool used to help discern bigger cycle change of trends when nesting them with the volatility background expecting a change in dynamics.
March 31, 2021
Just like most people by nature, I look for the truth. Yet today, it is flattering to see others finally talking in the same terms I found critical years ago, like the timing of market dynamics based on market context.
Like the following “When we get these types of extended moves away from the 200-day MA in the 10-Year Treasury Yield $TNX, we historical get a period of sideways action following” Well, someone predicting the timing of a market condition, a trading range.
But the 80% deviation above the 200 MA as the indicator of a sideways market vs. a correction from the event is being based on the functionality of an oscillator.
March 25, 2021
The start of the bear remains unnoticed
The calendar count starts with the Dow price high on March 18, 2021, and closing high on the 17th. There is more to a bull or bear market than an arbitrary definition like you will find in Investopedia. There are particular characteristics of each that differentiate them from countertrend corrections, seen by the definitions in retrospect only.
Point is that thus far there are no flags being thrown by the social media types that a bear market has started. Rather than the value class of shares, the economic cyclical companies will save the bull market in the face of the previous leadership being sold off.
The markets from the start of 2021 have given many warnings, price-based warnings overlooked by the
March 23, 2021
Gold entering a waterfall decline
The gold market from the panic high on August 6, 2020, a double top and a terminal thrust from the massive multi-month horizontal triangle has been drifting lower since. That drifting has been in a near-perfect descending channel, as you can see on the two middle chart windows, the weekly bar.
March 18, 2021
Good things come to those who wait.
The same patience it takes to ride out the cycle of a cyclical bull market is also required when waiting for the time to move to cash, which began at the end of 2018 and 13 months ago. It also takes a high degree of tolerance for the all-important hedge trades, especially if you are always in the markets, which would otherwise put you and your clients at risk for a 30% to 80% drawdown.
The Long term T-bonds peaked in March of 2020 on panic buying – as outlined by TEM reaching an extreme rule #1 – it still took over five months for the downtrend to cause a MA crossunder; and not until the last 45 days to move out of low gear in the rate of descent.
March 7, 2021
Social Media Mania
March 3, 2021
The Dollar Is Dead; Long Live The Dollar
There are so many false theories and narratives about the dollar and other assets; they are not worth debunking. Advisors and managers should consider the source and the underlying assumptions used to propagate and regurgitate social media content.
To cut through the fog of misinformation, Contrary Thinker listens to the market. The two middle chart windows contain our I-T trend following systems both on buy signals in terms of direction. What gives the most recent buy signal some punch is Technical Event Model’s (TEM) setup. The weekly bar has %C on a spike, causing a technical event #2, calling for a dynamic trend. The chart on the left is TEM on the perceived risk data, which is on a new TE#2. The last time that happened, there was a 6% move that followed.
March 1, 2021
The bulwark of the bulls is strong breadth underpinning the advance but they are avoiding the chinks in their armor
There are a fair number of flaws in their arrangements anymore but the key one is based on work that goes back to the diffusion index used at MLPF&S and based on Norm Fosback’s “High Low Logic Index.
While the bulls had been focused on Advanced to Decline surges among other measures of buying momentum breadth, they have been lacking to the extent that based on several models that use price and/or time EXITS they are “off risk” based on these momentum surge signals running their course.
One of these exits is the diffusion index,
February 26, 2021
“The Best Reason To Be Bearish Is…There Is No Reason To Be Bearish”
Bracketing off the one-day Disney rally that took the Dow to a new high on the 24th ( I mean, who could sell short Mickey Mouse or Donald Duck?), the beginnings of a meaningful decline took the first bite out of the bull market. The change of dates from the 17th to the 24th does not make a difference in the outlook (more on that in MarketMap-2021 Issue#7.) The decline from the 17th into the low calendar time windows for a change of trend unfolded as Contrary Thinker outlined. Here is the thing.