Volatility Report (click title for full report)
February 13, 2022
“Being mindful of your calendar can help you avoid mood swings”
An anniversary reaction is renewed feelings of grief or anxiety on or around the date of a traumatic event.
Gann was one of the more prominent names that anchored cycles to anniversary dates. How he anchored the cycle is a mystery to many.
I can say that technical analysis is about the scrutiny of mob behavior aka the market.
It follows that Contrary Thinker being the romantic I had to bring up the concept of anniversaries today because it is the 93rd anniversary of the “Saint Valentine’s Day Massacre.”
On the morning of February 14, 1929, seven members and associates of Chicago’s North Side Gang were gunned down in the Lincoln Park garage. Is there a lesson here? Yea, if you forgot Valentine’s Day, don’t look up, and more likely, “live by the sword die by the sword.”
In any event, going into the trading week, the expectation is for a pick up in the rate of decline and the possibility of a massacre based on the time element discussed in MarketMap Issue#6 and price-based analysis presented in Volatility reports.
February 10, 2022
Actions speak louder than words, and they are telling a bearish story.
While the little guy is shying away from the market according to the AAII stats propagated on the internet, the big boys are still chasing risk. From the bitcoin futures to the high beta stocks and FAANG shares, their actions reflect a one-sided bullish sentiment in the highest form of risk-taking.
February 9, 2022
The stock market is a metaphor for karma
What does buy the dip look like? Based on price, time, and implied risk it looks like this, and you can understand why everyone was screaming “blood in the streets” in January. Because BTFD stopped working. But today the wishful thinking bulls have put their long pants on and are “leaning” toward the bull market.
Whereas, the market by itself –
February 6, 2022
Being reflexive and being objective regarding the views of other professionals is being a Contrarian
February 2, 2022
“Get your motor runnin’ Head out on the highway Looking for adventure In whatever comes our way…”
Born to Be Wild Steppenwolf
Before you have a price target or a call for direction, you need to know HOW the market is going to get there. You could end up with a year like 2000 locked in a range of 20% with the best month being up 15% and ending the year at the same price where it began.
Context – the market’s pre-condition – will tell you what to expect with the right tools. It does not matter your time frame, do you trade the range or do you trade the trend, that is the question.
I have covered the background of the monthly chart previously, so no need to rehash that again. Today looking at short-term conditions and what should follow after triggers are hit is focused on the short term (S-T).
Featured here are the short-term (S-T) bars on the main stock index futures. The progression by each market is the same so I have focused on a particular Technical Event (TE) in each chart window to be as clear as possible for newer members.
Starting from the left,
January 29, 2022
The frantic chatter from the public stream is misguided and uncertain.
All talk about panic and wash out and the market meeting expectations that every expert advanced for a 10 to 20% decline seems to be the majority view of the professional advisor/content provider. The problem is the so-called “correction” has no signs of a correction. That is it looks and feels just like a BTFD event and 99% in line with all the previous dips of 2021. But no signs of a correction, no long bar day decline that exceeded 3 ½%.
There is some confusion that a few believe will be sorted out by the bulls, back to “how the markets are supposed to work.”
I hear that it just can’t be that crude oil is making a seven-year high while some of the grains are coming back real strong all in the face of a strong U.S. dollar and the weakness of other currencies. This is not normal, they are saying.
How can that happen when
January 28, 2022
Nearly everyone has jumped on the idea of an S&P washed out and the idea sentiment of the everyday investor at extreme bearish readings, they say, has got to be bullish.
When it comes to contrary thinking, the old school looks at what they have been told is the public who is hard-wired to lose 90% of the time. Yea that is old school TA, goes back to monitoring the “odd lotter’s” back in the 1920 and 1930s. The inference was dumb money because they were too poor to buy a round lot, 100 shares of stock. Hell, today they pander to the people to buy fractional shares.
Well, the point is that it was genius on Wall Street who told me he looked for a wave of consensus among the professionals, the advisors, the wirehouses, and today the instantaneous internet market experts.
While surveys of little bitty old people are fine for the people that use them, the actions of the traders, capital managers, and hedgers tell a story of
January 26, 2022
“Do not wait until the conditions are perfect to begin. Beginning makes the conditions perfect.”
Two of the most profitable patterns chart watchers can come across are the irregular top and the extended fifth. They are rare but worth the wait. They are unorthodox from an EWT point of view because its the third wave that is normally extended and tops normally finish on a five wave structure
Irregular is a new high like the one shown on the Glamor/value ratio chart inserted below where point (B) was achieved on an A-B-C advance as opposed to a motive wave, five-segment structure.
It is also worth repeating TEM’s monthly charts revealing where panic buying began, which is where the market’s risk level is and
January 24, 2022
Hey Easy Money!
“Easy come, easy go.”
The Perma bulls are slowly flipping to a cautious point of view, while the majority is referring to the decline as a correction. The decline has shown no signs that it is a correction in an ongoing bull market to date.
Here is a stat that is well known in the industry, one I would not hang large investments or hedges on. Rather the sentiment coming from the bullish side of the talking heads is more noteworthy.
January 18, 2022
“Here Comes A Revolution!” – Saxo Bank Unveils Its ‘Outrageous Predictions’ For The Year Ahead