Interest Rates/Bonds Project Inflationary 2021! What About 2022/23?
Outlook 2021 – Inflation Pros & Cons
01-28-21 – Since late-March ‘20, the outlook has been for Stock Indices (projected to set a 1 – 2 year bottom around March 23 ‘20) and inflationary markets (led by a declining Dollar after cycles peaked in March ‘20 as Silver cycles bottomed on March 16 – 20 ‘20) to surge hand-in-hand from April ‘20 into 2Q ‘21.
While these markets – which also included grains, energy markets and other commodities – are not expected to peak in tandem, the period leading into May/June ‘21 was/is expected to see rallies in close synchronicity to each other as economies recover around the globe.
The period surrounding June/July ’21 could be the most volatile due to how these moves often culminate. For roughly 95% of the trend, stocks view price inflation favorably and rally together. Then, the market wakes up one morning (when that inflationary move reaches an extreme) and the glee suddenly turns to panic… and stocks sell off. But what about Feb. – May ‘21???…
Bonds & Notes are in the midst of a multi-week rebound after spiking to new lows and fulfilling a powerful combination of weekly & monthly cycles converging in mid-Jan. ‘21…
On a broader scale, these interest rate futures are expected to remain below the highs they set in June/July ‘20 while perpetuating a ~4-year low-low-low-low-high-high-(high) Cycle Progression dating back to the 1990’s. That was forecast to time a major, multi-quarter (and ideally multi-year) peak.
Longer-term investors and hedgers can be liquidating long positions in Bonds & Notes and selling on intermediate rallies.” TRADING INVOLVES SUBSTANTIAL RISK!
Bonds & Notes are in what is projected to be a 2 – 3 year downtrend after fulfilling analysis for a multi-year peak in ~July ’20 AND the peak of a final, wave 5 of V advance (v of 5 of V). A multitude of factors are projecting an initial surge in inflation in 2021… with other phases to follow. Bonds should drop into at least 3Q ’22 (1/2 of 4-Year Cycle) and likely longer (2Q ’23?)
Stocks & Silver (paper & commodity inflation) triggered 6 – 12 month buy signals in March ‘20 as multi-year cycles bottomed… with stocks projected to advance into May ’21 before a multi-month peak would become likely. Lumber & Natural Gas also triggered March ’20 buy signals… ushering in a multi-year inflationary period in many commodities.
2021/2022 is expected to usher in the first shift in multi-decade cycles (40-Year & 80-Year Cycles) – timing everything from War (late-2021 into late-2025), Climate (Drought Cycles peak in 2021/22 and shift to Deluge Cycles in 2022/23), Agriculture (80-Year Cycle shifts in 2022/23), Currency Wars (2021)… and Interest Rates. The final year(s) of a 40-Year Cycle of Drought (into 2021/2022; see 90/10 Rule of Cycles) could magnify commodity inflation in the coming years.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.