Bonds’ Sell Signals Gaining Steam as Multi-Year Stock Cycles Turn Down.
Outlook 2022/2023 – Cycle Culminations
01-29-22 – 2016 – 2021 was the culmination of the latest phase of multiple 40-Year Cycles – expected to time another multi-year advance in Gold as part of recurring Currency Wars – and ultimately give way to real War Cycles in 2021 – 2025.
The Currency Wars emerged right on schedule and Gold experienced the bull market that was forecast to last from late-2015 into late-2020/early-2021. In many ways, those types of financial and/or societal shifts and instability are often harbingers of more overt and geopolitical shifts & conflicts smoldering below the surface.
War Cycles… in China
Since the early-2010’s, INSIIDE Track has focused on 2021 to usher in many major shifts and represent a tumultuous period into (at least) 2025. That is the recurrence of an uncanny 80-Year War Cycle that has impacted America since its founding, Europe since (at least) 1301, AND also China.
Before reiterating the European/American cycles, a quick look at ‘recent’ events in China reinforces this cycle. In 1850 – 1864, China was devastated by the Taiping Rebellion – a massive civil war, considered the bloodiest civil war ever (~20 – 70 million deaths). It overlapped the Second Opium War in 1857-1860.
80 years later, in 1934 – 1945, China was rocked by the triple whammy of the Soviet Invasion, the 2nd Sino-Japan War, and the Chinese Civil War.
In between, at the 40-Year Cycle interval, the Boxer Rebellion (1899 – 1901) culminated a ~7-year period of conflict beginning with the First Sino-Japanese War in 1894 – 1895, followed by the Dungan Revolt and then the Japanese invasion of Taiwan.
80, 120 & 160 years later pinpoints 2019 – 2024 as the period with the greatest synergy of these overlapping War Cycles for China and parts of Asia.
War Cycles… in US & Europe
For the past 10 – 15 years, however, the primary focus of this ~80-Year Cycle of Wars has been the West… particularly America. That cycle has been forecast to usher in a new phase in 2021 – 2025 – the latest in the following sequence of major conflicts that impacted Europe, England, and then N. America:
1301 – 1302 – Byzantine raids with Ottomans attacking Nicaea; Battle of Bapheus (following founding of Ottoman Empire in 1299); Ottomans defeat the Byzantines – the Eastern Roman Empire – in the first major victory of what would be a ~600-year empire controlling Eastern Europe… a momentous shift.
1381 – Peasants’ Revolt in England – a battle against high taxes, serfdom, etc. … and a 400-year precursor to 1775 – 1781.
1461 – Battle of Towton (largest & bloodiest battle ever fought on English soil; ~28,000 died in a one-day battle; part of War of the Roses with three other major battles occurring in 1461.
1541 – Seige of Buda – led to 150 years of Ottoman control over Hungary (western extreme of Empire).
1621 – Final phase of Dutch Revolt (an ~80-year war triggered by over-taxation of Netherlands for ‘unnecessary wars’) began in 1621 after a 12-year truce. 1621 also marked the beginning of the end (1621–1629) of the religious wars throughout Europe.
[Overlapping these phases, there was the corresponding 80-Year War – from 1568 – 1648 – in which the Dutch gained independence from Spain… another powerful corroboration of this 80-Year Cycle of War.]
1701 – War of Spanish Succession (another battle for independence; a precursor to 80 years later).
1781 – 1783 – Culmination of America’s Revolutionary War (began in 1775/1776)
1861 – 1865 – Civil War in USA (triggered by conflicts in 1855 – 1856)
1941 – 1945 – US entry into WWII (in Europe since 1936 – 1938)
2021 – 2025 Next Major Conflict? Watch China, Russia AND Middle East.
The 80-Year Cycle of War timed the most noteworthy & destiny-altering revolts & battles of the last millennium – involving England, Europe & ultimately N. America. Will History Repeat? Stay tuned…
Stock Indices rallied into early-Jan ‘22 – the fulfillment of multiple daily, weekly & monthly cycles that had projected an early-year peak in 2022 – and reversed lower, right on schedule. 1Q ‘22 (most synergistic in Jan/Feb ‘22 and ideally in early-Jan ‘22) was/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 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…
An early-year peak and a January ’22 sell-off would also align with the 2-Year Cycle that was detailed extensively in 2018 and again in 2020. Both times, it created early-year peaks and abrupt 1Q sell-offs…
2-Year Cycle
Throughout the second half of 2021, the 2-Year Cycle was repeatedly discussed since it had spurred January sell-offs (a majority being 10 – 15% declines) in 5 of the past 6 phases. Jan ‘22 was next.
In 2010, stocks began the year with an early-Jan ’10 spike high and then a quick, sharp sell-off into the opening days of Feb. ’10. The Nasdaq-100 led the way and suffered a 10+% drop before bottoming.
In 2014, stocks began the year with an early-Jan ’14 spike high and then a quick, sharp sell-off into the opening days of Feb. ’14. The DJIA led the way and suffered an ~8% drop before bottoming.
In 2016, stocks began the year with an immediate sell-off after peaking in the final days of Dec ’15. They suffered a pair of sharp sell-offs into the opening days of Feb. ’16, losing ~15%.
Much like in 2021, many stocks had peaked in 2015 – in May – July ’15 – and then experienced initial sell-offs into late-Aug & late-Sept ’15… just as they did in the past ~6 months. After setting Aug/Sept lows in 2015, stocks rebounded into early-Nov ’15 – when most set secondary highs (just as in 2021).
A pair of sell-offs ensued – into mid-Nov & mid-Dec ’15 (very similar to 2021, when several indexes fulfilled multi-year upside targets in Nov ’21 and then triggered 4-Shadow Signals with their sharp Nov/Dec ‘21 sell-offs – portending a larger decline in Jan ‘22).
They rebounded into late-Dec ’15 – just as in 2021 – and then began another sharp sell-off during the first three weeks of January ’16.
Déjà vu?
In 2018, stocks began the year with a mid-Jan ’18 spike high and then a quick, sharp sell-off into the opening days of Feb. ’18 – again losing over 10%.
In 2020, stocks began the year with a mid-Jan ’18 spike high and a quick sell-off into the final days of Jan. ’20, a precursor to a larger plunge 6 weeks later.
In 2022, stocks were forecast to peak in early-Jan. ’22 – perpetuating corroborating 2-month, 4-month & 8-month cycles – and then see a similar sell-off, following that peak. That is what has transpired.
Most indexes have now created the largest declines since Feb/Mar ’20 – a 4-Shadow Signal on the next higher magnitude that could be warning of a larger correction after the next rally.
The 2-Year Cycle perfectly dovetailed with the ~8-month cycle (midpoint and 1/2 cycle of ~16-Month Cycle) that had been projecting an early-Jan. ‘22 peak since early-May ‘21 (later reinforced with midpoint peaks in early-Sept and then early-Nov ‘21).
The DJTA and other indexes had set multi-month peaks in the first half of Sept ’18, May ‘19, Jan ’20, Sept ’20 & May ’21. That 8-month sequence forecast another peak to take hold in early-Jan ’22.
That cycle then broke down into successive ~4-month cycles that also projected an early-Jan ‘22 peak (early-May ‘21 – early-Sept ‘21 – early-Jan ‘22).
In the midst of that, it also broke down into successive ~2-month cycles that also projected an early-Jan ‘22 peak (early-July ‘21 high – early-Sept ‘21 high – early-Nov ’21 high – early-Jan ‘22 high; see accompanying HCP diagram).
The DJTA was the most uncanny, topping in sync with a very precise ~2-month/~60-day high-high-high-(high) Cycle Progression – previously timing highs on the second trading day of the month in July, Sept. & Nov. ’21… and doing the same on Jan 3/4, ’22.
In recent weeks, the S+P 500 and Nasdaq 100 indexes reversed their weekly trends to down… That is a lagging/confirming indicator that often times (within a week or so) an initial low and the onset of a reactive 1 – 3 week bounce. It also signals that a higher magnitude decline is unfolding and another sell-off should follow that reactive rebound…
All of that would dovetail closely with the 7-Year Cycle of Stock Crashes (20 – 35% or greater declines that culminated in 2016, 2009, 2002, etc.) recurring in 2023…
Bonds & Notes remain in multi-week downtrends after setting divergent peaks in early- and mid-Dec. and triggering the onset of new declines. The failure (Notes) and fulfillment (Bonds) of weekly trend signals at that time projected multi-week sell-offs that could be setting initial lows now.
However, the overall decline from July ‘21 could stretch into March ’22 and fulfill an overlapping ~1-year high (Mar ’20) – low (Mar ’21) – (low; March ’22) Cycle Progression.
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. Since that time, a ~1-year/ ~360-degree cycle formed a secondary peak in July ‘21 and could time a lower peak in July ‘22.
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.” TRADING INVOLVES SUBSTANTIAL RISK!
Bonds & Notes remain on track for a convincing decline into ~3Q ’22 (1/2 of 4-Year Cycle; with Oct ’22 representing a 4-year low-low cycle)… and ultimately into at least 1Q ’23. Equity markets are validating analysis for a multi-week, multi-month (possibly multi-year) peak in early-Jan ’22 followed by a major decline… reinforced with several indexes fulfilling multi-year upside price targets (‘5th of 5th of 5th wave’ peaks) in Nov ‘21. That projects significant declines back to multiple levels of ‘4th wave of lesser degree’ support.
‘Crash Cycles’ also kick in in 2022/23 (a ~7-Year Cycle that last timed sell-offs and lows in 2001/02, 2008/09 & 2015/16). Inflation has been forecast to see a second surge into 2022 with Bonds, Notes and Stock Indexes poised to drop in reaction to that.
2021/2022 was expected to usher in a dramatic 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 culmination of, and shift from, a 40-Year Cycle of Drought (in 2021/2022) could sustain commodity inflation into 3Q/4Q ‘22… keeping negative pressure on Bonds.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.