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    Volatility Reports 9/8/21

    September 8, 2021

September 8, 2021

Volatility Reports 9/8/21

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Going for the record books, again, but does that matter?

For the record books how many times have you heard this:

The economy “is caught in an ongoing ‘liquidity trap’ where maintaining ultra-low interest rates are the key to sustaining an economic pulse. The unintended consequence of such actions, as we are witnessing in the U.S. currently, is the battle with deflationary pressures. The lower interest rates go – the less economic return that can be generated. An ultra-low interest rate environment, contrary to mainstream thought, has a negative impact on making productive investments, and risk begins to outweigh the potential return.”

and how many times have you read this:

“The ironic truth of the current bubble is this: it’s not the effectiveness of Fed policy that rules out market losses. Rather, it’s the willingness of speculators to rule out market losses that makes Fed policy effective.”

or how many times has this content popped up on your phone’s data stream:

“Friday was the 52 and Monday all indications are that we will get the 53rd record high with 2021 set to have a record number of all-time highs”

and the catch 22 faced by the western civilized world:

“With inflation on both sides of the Atlantic now rising by more than anticipated, not tightening monetary policy risks letting the inflation genie out of the bottle in America and in Europe. However, for different reasons for Powell and for Lagarde, tightening monetary policy now risks triggering serious financial market crises both at home and abroad.”

Without the intent of lecturing,

all this is great stuff but when the bull’s time has come, its time has come. All the doctors of money have written this elderly patient off. A market that is riddled with every record to break in the history books, yet that pacemaker keeps on ticking. Still, we all know, when its time has come, its family will gather around to see it off peacefully, no?

But what is the market saying about itself?

For one it is unquestionably obedient and very compliant.

It is gratifying to see my competitors, especially the ones who get their dial on TV following me so closing in time and space with the same idea. One difference is that I do not hedge my statements. So when they say their indicator does not “intended” to call tops or bottoms” one understand how they can look at their own work and say in the fourth quarter 2018″…the data below the surface was turning bearish and the current %5 dip ‘could’ see further downside.” He goes on to include the 2020 peak, which he missed ” as his indicator did “not expect to produce larger moves (lower.)

Since 1987 there are few tops I missed that rendered the market helpless for 20% or more, from 2015 peak through 2020, Contrary Thinker is perfect. Here in 2021 we are early with the risk-off since May 2021, as in walk away May and come back in October (see more details below regarding impact on P&L).

In any event what my CMT pal is trying to say is that, since the fourth quarter 2020 low, the advance has been increasingly low volatility. After each steady advance reaching an extreme of complacency, the ensuing corrections have been milder and shorter in time. The S&P chart on the right is a prime example. The indicator on the left is CT’s %BB-VIX which is one of our measurements of market emotional preparedness. 

At the moment the market is ill-prepared for a decline that reaches 2 to 3% in a single day. But to repeat here an important rule is if one expects a bear market, do not expect a crash near the high pivot.

Use Bitcoin as an example. It made top tick on 4/13/21 – my birthday so you can mark that in your calendar and send referrals. Relative to its long bar history it did not have a panic day until 5/12/21 when it declines 23%. Such action is similar across other broad risk-taker markets.

That gives contrary Thinkers two conclusions here.  One regarding the BTC, it is in a bear market with that mini panic being part of the decline, not the end, because it did not exceed the previous long bar decline with its 21% range day sell-off.

Dito for the Dow & Co, while the sell-off that is expected from here into October should be brisk, there should not be a long bar decline that exceeds 5%. If one does, the bear will be like the 2020 crash, which is too soon to be likely else it is only an S-T to an I-T correction of 10% inside of a longer-term bull market.

Change of Trend Table

So you know astrology was a $2.2 billion industry last year, and most of them are generalists writing for blogs, magazines, and the Sunday paper regarding a person’s sun sign. A product that leaves them and the science open to the critic of being so general it could fit anyone. Fair enough, but I have a long-time friend who called the peak of the 1987 market to the minute based on Geo-cosmic events. Today he is more retiring but the point is it works, does so consistently especially used in conjunction with other tools.

Since I added tidal waves to my studies and expanded the research from 2016, my calls for market turns have been on the money. Out of the last four major off-risk signals, only the current one has had my advisory over my skies, which is on the right-hand side of the ATH.

However, the way I strategize around the pivots is a low-risk high reward ratio of 1 to 10, leaving my portfolios down since May 8.6% in the S-T product and 9.8 in the I-T product.  I encourage any visitor to the LinkedIn Group to sign up for one of our discounts deals because come mid to late October we will be set up to provide the trades ideas on a transactional basis with a percent of profits kicker. In other words, this is your chance to get in while it is still inexpensive.

As always the discount offers only apply to current visitors in the group or returning customers.- Thanks to the many that have been inside the group since early July and hope to work with you in the near future. 

Calendar counts, cycles, tidal and geo-cosmic events are clustering this first week of September. Anniversary dates are big in the first week ten days of September. For example, on September 6, 1901, President McKinley was shot, he did not fully recover with his relapse on September 13th setting the market into a mini panic.

The Bull market is at the point of either melt-up or shut-up.

Don’t be a lone wolf, be a pack animal, collaborate with Contrary Thinker membership.

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