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    Volatility Reports 10/2/23

    October 2, 2023

October 2, 2023

Volatility Reports 10/2/23

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Change is easy to spot. The things that can go unnoticed. When good news is ignored and spun the other way. Here is an example:

“Congress has averted a government shutdown in October but the political circus will resume in mid-November.” But the drum beat of negative thinking has always been there in both bull and bear markets. It’s when the market does not respond to the good news that is the tell.

Going into Sunday’s open the bulls ran the thin Globex market higher lead by the Bitcoin. Given the bullish tendency this year for Monday’s to be up days any failure to meet that expectation in the face of the good news from Congress fits the scenario outlined last week. After the low with the tidal cycles on the 29th, I pointed out the Volatility Model reached an extreme rule#1, a short-term panic low.

I pointed out on the 28th, “This is the spot where the bulls have been able to grab victory from, the jaws of defeat since the October 2022 low and more so since the Market 2023 low. In the face of all the rationalisms like the hardening of the risk market’s mentality to 4%+ rates on the long bonds, the current pause was expected.

The pause that was 90% assured remains in place. Ideally the preference would be to see the short term (S-T) model cycle to another of the four extremes setting up a change of context. This is where in 2022 the expectations of a continuation of the panic event into an ongoing condition, a 10% occurrence, still not unfold. If they had a nice profit year, they would have funded a few more retirements. On the humility side, this is why from a tactical point of view CT the first three months of 2023 favored the other team, the BTFD crowd.

Astro-Calendar and Change of Trend Dates (COT.)

Early in the week the quick post in VR group was that the timing of a near term low was suggested by the volatility model reaching a mini panic (TE#1,) and “it is happening when the tidal cycle is due for a low (red dot on the featured chart here.)

But the key is the recurring astrological (Venus square Uranus) event that produces double tops +/- six days on either side of the event that hit Friday. Dow & Co pushed above the last four-day range, for one of the highs. Any rally this week is expected to be short lived for the second top. It’s more than the high correlation to a S-T double top, but the right hand of the double top would be from a rally into major change dates, highlighted in the featured chart. These events are expected to turn prices lower.

 

The Crawford attractor is currently set up for a low pivot mid-November. It may be THE low, but most of the work done thus far, points to Spring of 2024 for a major bear market low. More on that in MarketMap™ 2024 Scenario Planner.

Tactics and strategy have not changed. We are holding major short positions via bear ETFs with a few long Volatility plays in the high delta long puts and calls.

Here is a fact. When most NYSE members are below their 200-day MA, the odds of hitting a short winner are increased.  I created a simple oscillator to reflect this. So, a move by it below 50% has a bearish implication. However, a move below its own MA (red line) is a solid clue that bearish trades are favored. CTT likes to see it stay below that MA. I feel that any failure to rally this week will lead to this another straightforward signs that the bullish recovery is over.

Trade Ideas

Keep in mind, if you do not want to build your own trade plan to trade ETFs or high delta puts/calls, the ideas are available on your smart and iPhones.  To access the channel, there is a one-time setup fee of $10 to Contrary Thinker to gain access. After that it is $10/month to Trade Exchange for the app.

Profit sharing Long Put/Call incentive fees capped on each idea. I only trade in-the-money contracts. The trade plan is NOT transaction driven. I wait for trades.

Profit >10% pays $10.00

Profit >25% pays $25.00

Profit >50% pays $50.00

Profit >75% pays $75.00

Profit >100% pays $100.00

Profit>200% pays $200.00

 

 

Great and Many Thanks,

Jack F. Cahn, CMT

Contrary Thinker since 1989,
Copyright 1989-2023

 

 

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