ALPHA ADDER by SYSTEMIC RISK CONSULTING

Thursday, January 03, 2019

2019 View from 30,000 feet above. CHINA CHINA CHINA

HIGHLY CONFIDENTIAL NOT TO BE SHARED EXCEPT BY PERMISSION OF AUTHOR

2019 View from 30,000 feet by ALPHAADDER. January 1st, 2019

CHINA CHINA CHINA AS IN FXI

The endogenous dynamic driving the markets currently as verified by current and previous Volatility Cluster originates from CHINA.

INFLECTION POINT: 2/13/19

INFLECTION POINT: 5/1/19

SUSCEPTIBLE TO EXOGENOUS EVENT: 9/2/19

NOW LETS LOOK AT USA S&P 500 IN ISOLATION BELOW

THE USA AND CHINA ARE IN LOCKSTEP. THE DATES ARE NEARLY THE SAME.

Monday, August 27, 2018

Current Phase and Context S&P 500 from 30,000 feet above. Continuing the Wall of Worry, until,,,,,

Textbook Wall of Worry. You've already forgotten being worried during those dips, haven't you.

As I told you before it started to happen, we are continuing to climb the Wall of Worry. We dip, you think we are wrong, it turns around and goes back up. Again, and Again.

As it stands now. Potential end of cycle contracting Mid 2020. Still.

Activity between now and then either confirms this, or sets up new timing. Importantly, either way, volatility remains auto-regressive until that time. Further setting in Anchoring Behavior, and a stronger and stronger feedback loop. Double Edged Sword.

I am reading more and more negative prognostications about impending doom. This is really healthy, and holds off the Six Sigma Event. Counterintuitive.

Further; The signals are NOT as well defined and clear as they were in 2007. This has direct bearing on the size and distribution of the future event. Signals in 2007 were terrifyingly clear. Not as much currently- A good thing.

Going forward. Volatility- Yes. Expected, and of a an expected degree, that will make you cringe, and question your resolve, but in the end, will be a continued Climbing of the Wall of Worry with stopping points in the graph above.

If I continue publishing, I will do it without the timing component you have seen here. It is a distinct competitive edge/advantage that I will no longer keep in any computer. I am applying solely within my proprietary trading going forward. If I continue to publish here, I will clarify Phase, and Context.
Current Phase/Context: Self Organizing towards Criticality, and will become Susceptible to an exogenous event causing a large Volatility Event in the intermediate future. We are nearing the end of this second record long market run. Enjoy the Runup to the end-DO NOT GET ATTACHED. DO NOT ANCHOR. BE AGILE. PROTECT YOUR BALANCE SHEET. DO NOT FOOL YOURSELF INTO THINKING YOU KNOW WHAT THE UNFORSEEN EVENT WILL BE, THAT TRIGGERS THE CASCADE.
Cheers!
Bob K

Wednesday, June 27, 2018

The Hidden Hand of Contextual Temporal Value Systems, and Perceived Priorities

6/27/2018 Wall of Worry. Asset Prices Extended by many measures
Doesn't matter at this point, (for a while) Adam Smith's Hidden Hand
is in charge. Asset Prices are Temporal, Contextual and based on
Perceived Priorities-Review 8/22/05 Entry
People, AND NOW MACHINES, are being conditioned. Everybody is riding the predictable churn of autoregressive behavior by the market. As it always does, it will work, until it doesn't, Catostrophically. Of course, the other side of the coin is the old admonition to Short Sellers; That the market can stay irrational longer than you can stay solvent.
The dearth of liquidity is being caused by the increasing integration of A.I. into High Frequency Systems, and its corresponding increasing rapidity of stepping away from the market. This increases frequency of "Flash Crashes", from which we recover. My concern is what will happen the next time the System has again Self Organized to the point of Criticality, and is Susceptible to a Six Sigma Volatility event, and the Machine Firepower is potentially overwhelming combined with the normal endogenous phase transition forces.