Bitcoin Completes Final Spike High; 40-Year Cycle ‘Seismic Shift’ Imminent!
11/29/21 INSIIDE Track – “History rhymes; it does not repeat. The same mistakes might be made (’those who do not learn the lessons of history are doomed to repeat them’) but the actual events are different… often dramatically so. That does not, however, change the overall principles, cycles, or societal shifts that take place at key intervals.
I stress that principle to preface the following postulation. This conjecture is not implying that the same things – or even close to the same things – are likely to unfold. It is only conveying that some similarities or parallels are expected… and are already unfolding.
Sabbath of Sabbaths
A cycle of 49 – 50 years has been discussed before. Its origin dates back to (at least) the Old Testament and the book of Leviticus when Israel was being given a set of parameters for how to govern the land they were entering. One of the primary ‘rules’ had to do with agriculture and the principle of allowing the land to ‘rest’ during each 7th year.
That principle has been revered and applied right to the present day (in forms of organic farming) and provides the soil the necessary time to replenish depleted minerals and related elements. That principle extends beyond just agriculture.
After 7 of those 7-year periods, an additional year of ‘rest’ was necessary – a year of Jubilee – for the nutrients in the land and soil to replenish more thoroughly before being farmed again. The 49th and 50th years were critical and were when that principle of ‘jubilee’ was exercised – in society (debt, etc.) as well.
That 49-year (and 50-year) cycle has been evident in many markets. Two prime examples – that are actually not in precise sync with each other – involve the US Dollar Index (versus other currencies) and Gold (versus the US Dollar). More on those in a minute…
1973 – 1974 Redux?
The discussion of this 49 – 50 year cycle is laying the foundation for a related discussion – hypothesizing that 2022 – 2023 could possess some similarities (rhyme… NOT repeat) to 1973 – 1974. Several major events of 1973 – 1974 already possess potential parallels setting up for 2022 – 2023. They are:
- Aftermath of drawn-out military conflict.
- Transition of US President, mid-term.
- Dramatic sell-off in stocks.
- Societal shift reflected in Roe v Wade
- Dollar/Gold analysis…
Stock Sell-off
With the culmination of multiple long-term cycles in 2022 – including a 40-year low (1942) – low (1982) – high? (2022) Cycle Progression – the stage is set for a significant stock sell-off. The 7-Year Cycle of Stock Crashes (20 – 35% or greater declines that culminated in 2016, 2009, 2002, etc.) recurs in 2023 and creates a 2-year period that could rhyme with 1973 – 74…
Stock Indices fulfilled upside objectives – in time and price – surging into Nov 4 – 9 and setting another multi-week peak. That was projected to be the interim high between a preceding peak in early-Sept ’21 (2 months prior) and a projected peak in early-Jan ‘22 (2 months later). In between, weekly cycles were/are portending an intervening low in late-Nov/early-Dec (depending on the stock/index).
10-29-21 – “In all these indexes, there is likely to be more whipsawing – back and forth – between now and the next multi-month cycle high (likely in 1Q ‘22). The NQ-100, Russell 2000 and other indexes have the potential for another intermediate low in early-Dec. ‘21.”
As described all year, the expected 1Q ‘22 peak could be another divergent one with some stocks/indexes setting higher highs while others set equal or lower highs. That is reinforced by the price action, and price objectives met, during the surge into early-Nov. By reaching key upside price and wave targets, some key indexes projected ‘a more substantial sell-off’ in Nov ‘21 (more substantial than 3Q ‘21 declines) – in line with last month’s analysis.
To reiterate from last month’s issue:
10-29-21 – “The Russell 2000 peaked in March ‘21 and has been in a sideways correction since then – remaining within a relatively narrow trading range… During each sell-off, the Russell 2K has been unable to turn its weekly trend down – indicating that new highs (above the Mar ’21 peak) are likely to be seen before a more substantial sell-off becomes possible.
That (potential) new high would also be confirmation of a wave ‘5’ rally of which the overall 5-wave advance began in March ‘20…”
The Russell 2K fulfilled that wave objective and a host of decisive upside targets – and along with most indexes fulfilled ~60-day/~2-month low-high-high-high-(high) Cycle Progressions during intermediate cycle highs on Nov 4 – 9 – while peaking right at its multi-year upside trading range target (2460/QR).
That trading range was set by the early-2020 peak near 1710 and the ensuing March ’20 low near 960 and projected a surge to 2460/QR after the Russell 2000 broke above 1710 in Nov ’20 (1710 high – 960 low – 1710 – 2460/QR peak; see diagram at top of page 5). It fulfilled that during early-Nov cycle highs.
By spiking to new intra-year highs (fulfilling its weekly trend and monthly trend patterns) AND fulfilling its Elliott Wave objective AND attaining this multi-year upside target, the Russell 2000 ushered in the time for a sharper decline in Nov ’21… and potentially longer after completing its wave structure.
That 2460/QR objective had been reinforced by the Mar ’21 low (~2085/QR) – precisely at the midpoint of that overall projected trading range (1710 – 2460), a key level that supported declines in May, July & Aug ’21. For the majority of 2021, that support (2085/QR) held multiple pullbacks while creating a corresponding (upside) trading range target at the same 2460/QR level (1710 – 2085 – 2460/QR)… crucial synergy!
The lower diagram on page 5 illustrates how these ~375.0/QR & ~750/QR ranges have enveloped most of the intermediate and larger-degree swings since the 2009 bottom. As long as the early-Nov peak of 2460/QR holds, the Russell 2000 is focused on ~2085 and the potential for a drop to that support.
2085/QR is now also the ‘4th wave of lesser degree’ support (the low before this culminating rally) – heightening its significance. That identifies it as pivotal support for this latest correction AND the breakdown point if an even larger-magnitude sell-off is in the cards (that would be signaled by a weekly close below 2085/QR).
The early-Nov peak increased the likelihood for a multi-week sell-off in Nov, reiterated in the Nov 3 Weekly Re-Lay Alert:
“A peak on Nov. 4 or 5th would also perpetuate a ~60-day/~2-month low-high-high-high-(high) Cycle Progression in which peaks (preceded by a low in March ’21) were seen on the 4th – 7th trading day of every other month (May, July, Sept. and Nov?)… the next phase of that ~2-month pattern would arrive in early-Jan. ’22, the same time that multiple cycles project a more significant peak.
The Russell 2K has finally surged to new highs, fulfilling its weekly trend pattern and ushering in the potential for a 2 – 4 week peak in the coming days. That could lead to a reactive sell-off into late-Nov – in sync with a 12-week high-high-high-high-(??), a 14-week low-low-low-low-(??), and an 18-week high-high-low-(low?) Cycle Progression…”
In the same month the Russell 2000 was fulfilling that synergy of upside targets, the NQ-100 peaked right at its multi-month upside target (~16,700/NQ) and reversed lower – with key support near 15,700/NQZ. (Short-term action is showing why another sell-off could be seen in early-Dec.).
Another (leading) index also fulfilled major upside objectives in Nov ‘21 – related to a potential wave ‘5’ surge and culmination. In that case also, the attainment of a major upside target reinforced the potential for a larger-scale decline in Nov/Dec ’21.
As explained last month, the DJTA bottomed in late-Sept and projected a new impulse wave higher (’5’). The May – Sept ‘21 decline was the largest correction since 1Q ‘20 and its longest correction since 4Q ‘18 (all linked by the 16-Month Cycle). On Oct 15, the DJTA closed back above its weekly 21 High MAC and reinforced those bullish signals. That spurred a surge into Nov. 2 when the Transportation Average was the first index to fulfill upside objectives and signal that a multi-week/multi-month correction should follow:
11-06-21 – “The magnitude of the DJTA’s advance – from Sept 20 into Nov. 2 – matched the magnitude of its initial March – June ’20 rally, a potential case of wave ‘5’ = wave ‘1’. In that case, the typically-dynamic and extended wave ‘3’ lasted from June ’20 into May ’21. So, once again, the DJTA has the potential to set a multi-week or multi-month peak before others…
Another reason for expecting that is the wave structure in the NQ-100, which also signaled in Oct. that it had entered a multi-week (impulse) wave ‘5’… an initial peak is likely on Nov. 4 – 9 – perpetuating a ~60-day/~2-month low-high-high-high-(high) Cycle Progression in which a low and then a series of peaks were seen on the 4th – 7th trading day of every other month (March, May, July, Sept. and Nov ‘21?).”
The most important takeaway from stock market action in Nov. ‘21 is that many significant stocks and indexes have fulfilled 1 – 2 year upside targets – on multiple levels – ushering in a potential topping process that could stretch into 1Q ‘22 (when the stronger indexes – like the S+P 500 and NQ-100 – could set their final highs as other indexes diverge).
They have also completed wave structures that augur a significant correction. Even the NQ-100 is reflecting waning strength. Last month’s issue highlighted that fact:
10-29-21 – “The NQ-100 bottomed above support (~14,100) and has since rallied back to the highs – signaling a wave ‘5’ of its own (though on a different magnitude than that of the Russell 2000) – stemming from the Mar ‘21 low… Since initially peaking in Feb. ’21, the NQ-100 has had three successive corrections – each one bottoming right at the rising weekly 21 Low MAC.
The second and third ones represent the ‘2’ and ‘4’ wave corrections in the 5-wave sequence that has unfolded since the early-Mar ‘21 low. The weekly trend shows that this latest rally does not have the same underlying strength as its predecessors – another earmark of a wave ‘5’ rally. As a result, it might not spike too much higher than the early-Sept high…
So, there is quite a bit of synergy coming into play in 2022 as equities remain above multi-month and intra-year support levels during recent corrections. That does not, however, preclude the potential for another sharp sell-off in Nov ‘21 (potentially stretching into the first half of Dec. ‘21).”
That wave structure projected a lesser-degree wave ‘5’ peak in Nov. ‘21 and would likely lead to a higher-degree wave ‘5’ peak in 1Q ‘22… even as it increased the potential for a sharp sell-off in Nov and possibly Dec ‘21.
1Q ‘22 Review
1Q ‘22 (most synergistic in Jan/Feb ‘22 and ideally in Jan ‘22) is the convergence of a web of 16, 8 & 4-month cycles AND the latest phase of the most consistent cycle of this century – the 3.25-Year Cycle.
That cycle was last involved in creating the Dec. ’18 low and projecting an overall advance into 1Q ’22 – when the next phase should invert and time a 1 – 2 year (or longer) peak. That would fulfill a 3.25-year low (1Q ‘09) – low (2Q ‘12) – low (3Q ‘15) – low (4Q ‘18) – high (1Q 2022) Cycle Progression.
As the markets have been moving toward 1Q ‘22, repeated corroborating factors have emerged. A multi-week peak in early-Sept ‘21 was projected and increased the likelihood for a multi-month peak in Jan ‘22 (4-month high-high-high Cycle Progression).
After that was fulfilled, focus turned to early-Nov ’21 – when another multi-week peak was forecast. It has now been fulfilled and increases the likelihood for a multi-month or multi-quarter peak in Jan ‘22 (2-month high-high-high Cycle Progression).
And that would also dovetail with the 2-Year Cycle that was detailed extensively in 2018 and again in 2020. Both times, it created peaks in Jan/Feb of those respective years – as well as subsequent peaks in Sept/Oct ‘18 & ‘20 – and is on track to create a similar peak in Jan/Feb ‘22… Most indexes fulfilled the May/June ‘21 cycle peak and many stocks remain below their 2Q ‘21 peaks. That is another reason why the action of Nov ‘21 – Jan/Feb ‘22 could be so revealing.
3 – 6 month & 6 – 12 month (and even 1 – 2 year) traders and investors should have been lightening up on long positions in early-Sept…
The European STOXX 600 Index rallied to new highs in Nov ‘21 and reversed lower, selling off with most other equities and indexes. That could spur a drop to ~456 – where intermediate support exists.
The German Dax Index spiked to a slight new high in mid-Nov (~90-degrees/~3 months from its mid-Aug ‘21 peak) and quickly dropped back below its June ‘21 peak. It continues to trace out a topping phase that needs a weekly close below 14,950 to confirm a multi-month peak.
The DAX is culminating an 18-year/5-wave advance (illustrated in the accompanying chart). A peak in 2021 would fulfill a related 6-year low-low-high-(high) Cycle Progression that includes the 2015 peak and the preceding 2002 & 2009 lows… and project an ultimate drop back to the ’iv’ and ’4’ wave lows…
On a broader basis, Bonds & Notes are steadily validating the overall outlook for 2020 – 2023 in which interest rates have been forecast to slowly rise in response to developing inflation and other factors.
The Bond peak in July ’20 perpetuated an uncanny 4-Year Cycle that timed multi-year highs in July ‘12 & July ‘16 and preceding lows in mid-2004 and mid-2008. That cycle projected that interest rates would slowly rise (and Bonds fall) in 3Q ‘20 – 3Q 2022, possibly extending into 2023.
Longer-term investors and hedgers could have been liquidating long positions in Bonds & Notes and selling on intermediate rallies in 3Q/4Q ‘20… and should have added to short positions in Aug ‘21…
The Dollar Index remains bullish on a 6 – 12 month and 1 – 2 year basis after bottoming in early-2021 while completing a 4+-year ’A-B-C’ decline and perpetuating an uncanny 38 – 41 month cycle. That should lead to another advance, stretching into 2023 – when an uncanny ~3-Year Cycle recurs.
It confirmed that by turning its monthly trend up in Aug ‘21 and has reinforced that by closing the month above its declining monthly 21 High MAC. That often spurs a pullback to retest that MAC while giving it time to flatten and turn higher…
Bitcoin is testing initial downside targets at 54,000 – 56,000/BT after fulfilling the 3 – 6 month outlook for a surge to new all-time highs and then a retest of that peak (~67,000/BT). It would need to close below 54,000/BT to elevate this correction and potentially drop to 49,000, possibly 42,000/BT.”
Bitcoin fulfilled what its monthly and then weekly trend indicators have projected – a surge to new all-time highs (~66,000+/BT) ushering in a major top. On Nov 10, Bitcoin produced an outside-day/2 Close Reversal sell signal – providing the first sign that a major top is taking hold… and more confirmation is evolving. It could drop as low as 42,000/BT before year-end – the first stage of a major sell-off. If Bitcoin can sell off sharply in Nov/Dec ‘21, it will powerfully corroborate the outlook for 2022!
Cryptos are completing the expected culmination of a major bubble and the fulfillment of the 40-Year Cycle of Currency Wars – when a ‘seismic shift’ should begin to take hold. Projected Dollar strength & equity weakness in 2022 could burden cryptos throughout the year and usher in 2023 – when a major solar storm is cyclically likely (also see Oct ’21 INSIIDE Track). Rising interest rates should also pressure cryptos.
Coinciding with this, major stocks and indexes are completing multi-year uptrends with final wave ‘5’ spike highs (also in Bitcoin) projected for Nov ’21 and/or Jan ‘22. That would portend subsequent 2022 plunges to (at least) their 4th wave of lesser degree support.
What does this mean for the future of cryptos?
Why is 2022 Bearish for Cryptos & Stocks (and Bullish for US Dollar & Interest Rates)?
Could 2023 Provide Massive ‘Challenge’ with Solar Storm??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.