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MarketMap-2020: Changed Event Based Cycles and Scenarios and January Fractal Map 2020 and More

The Technical Event Model is providing the context behind market dynamics. There is nothing more powerful than an idea whose time has come.

Two big factors are showing up on the tape. Factors noticed by me as well as other traders and advisors whose names you would recognize. One is they are painting the tape. Specifically, the big ten banks are driving the Nasdaq to new highs with a focus on two hands full of big-name FANNG stocks from Tesla to Microsoft.  Similar to the Nifty Fifty bull push into the peak of 1972 with the major institutions buying the big blue chips. Hence the A/D line diverging for over a year with the OTC averages. The inference is a thin market to new highs but a wide number of stocks declining yesterday, over 1800 on the NYSE- more than we have seen since August of 2015.

As a sidebar, that is the period when we launch hedge systems timing with FastEddie and made a bundle in that correction.

The other issue is how the banks are advertising an advance by driving the market higher during the thin hours, the Globex after-hours trading, making a market to sell into after the more liquid open.  As mentioned in our brief “Monetary Policy and Political Policy are Blurred,” the banking cartel will crack when the outlook for the Political regime outlook changes for them.

With that as a backstory, the process that puts the hedge systems online is a number of events that are capped off by the VX futures and VX ETFs breaking out after a TE#2 set up and a panic wave on the break, that is a TE#1.

The daily bar shows this clearly back earlier in the year and over the last week or ten days, and a TE#2 on the weekly bar suggesting a breakout should get carry over. A move above 38.50 would add confidence to the system on signal advice.


The supporting underlying ETFs are breaking out as well.  The short term featured here reveals the S-T breakout on panic buying supported by the long bar on the weekly chart after the TE#2 set up, suggesting strongly a dynamic trend.  A move above 41.61 puts VXX into breakout territory, and a move above 47.60 should cement in the idea of long volatility strategies.

Another chart that our TradeStation members have is the weekly VXZ; a five-month perceived risk index. The S-T story is the same as above, but the I-t or weekly bar is supported for breakout trading by TE#4. Such an event suggests that the weekly range could expand 12 points next week.  The dotted lines for today provide the breakout zone from 36.62 to 38.61, but they will adjust on Monday, so you want to keep an eye on Monday’s open if you are not engaged yet.

More to come on the stocks indices

The Technical Event Model is providing the context behind market dynamics. There is nothing more powerful than an idea whose time has come.

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2020.

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