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September 29, 2021

New Trade Ideas

Top Ten Positions

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September 27, 2021

There are more than 6,500 cryptocurrencies in existence as of September 2021. The bullish case is not based on a limited supply, it’s a matter of branding.

Bitcoin is the bellwether of risk-takers
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September 27, 2021

Volatility Reports 9/27/21

Historical Thresholds are Rare, Hence Money Managers, Investment Advisors, and Economists Tend to Operate and Think in Crowds.

They are comfortable that way justifying why they take risks with the objective of beating the average return of the S&P when max drawdowns are always possible based on their own rationale that no one can time the market?

Instead, let us see what is the market saying as of Friday.

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September 27, 2021

Volatility Reports 9/27/21 Dollar Index

Expectations from the 9/16 Volatility Report called for a two to five weeks bull run in the buck.

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September 22, 2021

Volatility Reports 9/22/21

Monday it was pointed out that “cycles are lower into the next COT due early this week, the 20th”

To be clear MarketMap – 2021 issue#14 said, “Here is the key if the market blows clear through that date and without any traditional TA calling for a low plus the new TA dynamics timing supporting a forceful trend, the odds will favor the new bear market into mid-October.”

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September 22, 2021

Volatility Reports 9/22/21 CGX and EEM

Typical trend following content is beginning to flood the social media tracks with all the reasons why one should be bearish on the Shanghai Dow.

The execution of our bearish positions began in March 2021 and was filling out in July. Our bearish positions are now up over 50% +/- and we are only halfway there; and will double down on the break (see execution table below.)

While the negativity is over the top, it is clear that at least an I-T cyclical peak has been established in the PacRim and emerging markets; and from China to Nikkei risk is 30%

The top chart is the monthly bar of the…

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September 19, 2021

MarketMap2021 Issue #14

A major test of the cubby bear market is expected this week. The downtrend that started in the Dow on August 16 needs to invert the shortest cycle lows due early this week, in order for the bear to be for real and a forceful trend.

Trends are aberrations.  For a pro-directional move to take place ( i.e., the market was down yesterday means it will be down today and that will be followed by a down day tomorrow, etc) the market must break the cycle to one smaller degree.

MarketMap™-2021 pointed out in the last issue that “tidal forces tend to keep the low and highs trading in two weeks from low to high and two weeks back to a low.” This is a natural occurrence that all investors and traders observe daily. It is a four-week peak to peak cycle and a four-week cycle from low to low.

It should be intuitive and obvious that during up trends the high pivots become inverted – may only last a day or less and during meaningful declines the low pivots last only a day or less, aka cycle inversion.

From the peak in the Dow on the 16th of August – a tidal low was expected- and since that inversion, each row in the table is highlighted in red denoting a downtrend.  The high on the 7th of September happened for the FANG and Nasdaq pointing cycles lower into the next COT due early this week, the 20th.

Here is the key if …

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September 16, 2021

Volatility Reports U S Dollar

Two weeks to five-week bull run expected in the USD

The change of trend that hit on 9/6/21 is followed almost always by a 2 week to a 5-week trend. Like all COTs, they are direction neutral but the Dollar index is taking off higher and triggering buy signals.

Thanks to members and new network pros for keeping the previous post from one week ago in mind,- on the COT 9/6/21. Three weeks back in the blog post-VR 8/26/21 the price-based background provided long-term bullish conclusions.

URL to private LinkedIn Group for open-minded investment/trading professionals https://www.linkedin.com/groups/13677288/

Here is the three window look at the buck and what is attention-getting is that all three bars have put the Technical Event Model (TEM) at an extreme rule#2. This is not the typical analysis talk, it is not a sales gimmick, it is the tool used to see when a market’s dynamics are about to change. What the Technical Event #2 signals are to play the break, enter on the MA crossover, or whatever is used that triggers your entry position.

What is expected to be powerful is the bullish break because all time frames are on a TE#2. You can see the breakout levels on the charts that should add confidence to bull market traders. It is also the pain trade carried by the large managed funds, in an attempt to keep the dollar depressed, which is bullish for their stocks.

You don’t need to trade with a bias, but based on what else shows up on the charts, which is bullish. On 9/9/21 I added to my long USD/JPY and short EUR/USD. That advisory was posted in this space. #dollar #change #network

Long-term cycles are pointing higher into 2026-27. This fits with the analogist background that the dollar throughout US history is strong when the Dems. control the white house and weak when the Reps are in power.

The above bullish analysis on the dollar is not very popular. That may be because it is not full of hyperbole that we all find in the social media information stream regarding Bitcoin & Co, Gold, Silver, and the Euro, not to mention the hot stock pick of the week.

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2020

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.

— 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

September 13, 2021

Early & Late Trades 9.13.21

If you did not read the Volatility Report sent out Sunday, the blog post is not encrypted yet for members only plus it was emailed. Have a read see the undertow for yourself.
Three new trades this afternoon, click to enlarge the screengrab, cheers.
Here are a few newer trade ideas, keep in mind the opportunity vs risk is 10 to 1, so work the orders, there is nothing magical about my fills, you do a little better or worse for the same ratios
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September 12, 2021

Volatility Reports 9/13/21

The Rule of Alternation Tells Us to “Expect Something Different” That is one of the many first principles advisors, managers, and traders know but it does not tell us “when.”

But this ebb and flow, this process from motion to rest and back is demarcated. The when is after natural or human-made divisions in time, as the calendar week-month-quarter or the accounting period when the books close, or anniversary dates when cycles begin and end.

So, after the lowest year in volatility -according to the media – 2017 was it; and what proceeded was a change, with a 13% correction in nine trading days from January 26 to February 9, 2018. Followed by a near 20% correction in the fourth quarter of the same year. Something different indeed.

Today, nearly the last quarter of 2021 we have a similar background. Our social media friend Charlie Bilello posted the following stats:

“The S&P 500’s maximum drawdown this year is only 4.2% (closing basis). Going back to 1928 only 3 years have had a smoother ride than 2021: 1964 (-3.5%), 1995 (-2.5%), and 2017 (-2.8%).”

Based on the Rule of Alternation – after 300 days (10 months) without a 5% correction – investors and traders should expect something different after a financially repressed stock market.  But I will throw another factor into the equation. While 2021 thus far has been a low drawdown year, it does not compare to 2017, which was a true low volatility bull market, because 2021 has an undertow of spiking volatility as the first featured chart points out.

The chart is the trailing P&L of our affiliate TMT long-only VX futures scalping system. When the underlying index VIX advances it reflects perceived concern and fear of changeability – normally the changed that is feared is of a decline. However, while the chart reveals the long volatility profit runs when the S&P witnessed corrections and a bear market, it also shows a trend of profits in 2021 with only minor declines with the majority of profits coming from the fear of missing out in the bull market driving spikes higher in the VIX.

This understanding is in gear with Contrary Thinker’s observation that over the last 5 months the advance has been marred by fear buying as measured by the Technical Event Model (TEM) on the month bar. Charts are shown previously on all the majors including the Macro sector Fang Index.

This is also in agreement with the Google Alerts following keywords like “FOMO” and “Stock Market” among others that have spiked to extremes over the same period as seen in this chart from Global Market Perspectives.

Lastly, in recent issues, I have displayed charts of the Skew index reaching historical highs. This index is based on perceived tail risk by big money players. In other words, with their “ear to the ground” they hear a known – unknown coming at the markets and possibly a black swan event, an unknown – unknown.

Staying with the underlying context of the markets the next four window chart tells the story of the current readings of the historical volatility of perceived volatility for each market on a short term (S-T) basis. That jumps off all the charts is the Technical Event Model reaching an extreme rule #2. These signals – setups – as a rule, precede breakouts with carry-over or trends. And here I am talking about breakouts in volatility, in other words, “fear is about to go into a trending mode since that is what the CBOE data measures.

Based on the above, for traders and hedgers that have scalping Algos with Turtle Style contract sizing – esp if filtered by TEM – now is the time to be engaged.

The bottom line in the Volatility Report dated 8/23/21 stated: “The rally into today’s COT is expected to fail and the downtrend that began on the 16th will be capped off on the 23rd and 24th going to an “out of the blue” bear market. iCahn Hedge is engaged, more on that in the last two hours of trading.

Dates Net $26rt per contract No of trades Win Rate
9/10/2021 $6,056.00 6 83.33%
9/7/2021 $314.00 4 50.00%
9/6/2021 ($196.00) 1 0.00%
9/3/2021 ($112.00) 2 0.00%
8/31/2021 ($1,540.00) 4 0.00%
8/26/2021 $3,660.00 7 85.71%
8/24/2021 ($202.00) 2 0.00%
Account Size $7,980.00
$100,000.00 7.98%

The Dow is always our focus as it is a household name and most widely followed. Plus we have data going back to 1889.  What is important to see on the daily Dow chart is the peak came in on the 16th of August, the exact date in the COT table; and the secondary high hit on September 2, the day before a high tide event was expected and early in the week of high COTs. The chart shows this market just not failing to keep up with the S&P but being rejected but intermediate-term resistance followed by the breakdown of its wedge pattern and its lower channel line.

Another daily bar chart of the Dow shows a truncated fifth wave high. It’s more than another way of saying it failed to confirm ATHs with the S&P and Nasdaq, it broke an EWT rule, as such – if it is a failed fifth wave – the old school EWT boys will be jumping on this with massive selling this coming week.

The chart also uses Gann angles to point out target areas for this first phase of decline. Each zone is highlighted in blue and the price levels are cross-checked with CT’s Gann’s excel sheet that projects targets, where the focus is only on the 360-degree target nothing in between. Contrary Thinker likes to see the 360-degree projections nest with the angle crosses seen on the chart. 32,000 should be a walk in the park by Friday.

If you recall how bear markets are structured, if the market does has a long bar day of greater than 5% – a place where banks and funds have their trend following bands that kick in – shortly after the ATH, it is only a correction. If it is a bear (by definition greater than 20%) it will unfold with longer bars following a geomatical expansion.

Historically, the market does not go into any form of panic – aka long bar days greater than 5% until a month after the peak. The Dow is there now, so the pace of the decline is expected to pick up this week. The next meaningful COT is Monday the 20th, but that series of COTs works it way out to the end of the month, September 27. What is key – assuming the above scenario is correct – at the end of this week or over next weekend, CT needs to see where TEM is along with its Panic Index and on all time frames along with an EWT count, with the expectation of an S-T bounce

Trade-Ideas are the same.

Any of the positions that were stopped out does not mean the position is wrong it means the goal is to keep losses small. All of the positions will be reentered. Last week as noted I doubled up on long USD/JPY and short EUR/USD.  More on positions and new entries and re-entries to follow.


Don’t get caught looking the wrong way.  Don’t think all the social media contacts are friends providing solid advice for free. Wouldn’t you rather have four quarters than one hundred pennies? Value who you work with.

The new you is going to cost you. For starters giving up the old you. Join our group without question. 

Copyright 1989-2021

Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 8006183820 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.

— Contrary Thinker does not refund policy; all sales are the finale.
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.

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