Bitcoin Pullback Likely Before Culminating Surge; 40-Year Cycle Portends ’21 Peak!
09/01/21 INSIIDE Track – “2021 remains as one of the primary focal points for the culmination – and transition – of diverse major cycles. As stressed throughout the past decade, 2021 was forecast to time the fulfillment of the latest phase of the uncanny 40-Year Cycle of Currency Wars.
The overall period from 2016 – 2021 was projected to time another strong advance in Gold as it again battled the US Dollar and other fiat currencies for ‘supremacy;. That was expected to be similar to the previous phases of that 40-Year Cycle – in 1976 – 1981, 1936 – 1941, 1896 – 1901, 1856 – 1861, 1816 – 1821 & 1776 – 1781 – and could time the swan song for the yellow metal.
At the opposite end of the spectrum, though paradoxically related, is the culmination of an inflationary boom in paper instruments – most notably stocks and debt instruments (bonds, notes, etc.) Bonds & Notes were forecast to experience major, multi-year peaks in 2020 and to move steadily lower into 2022/2023.
As for equities, it is conceivable that stocks could stretch a final peak into 2022, based on a few overlapping cycles.
One of those is the 40-Year Cycle that spanned the 1942 and 1982 lows – the two lows prior to major inflationary advances in equities (following 13 – 16 year volatile sideways patterns) – and which comes back into play in 2022.
If stocks (at least some) set highs in 2022, it would fulfill a 40-year low-low-(high) Cycle Progression and turn the focus to 2023, when a 7-Year Cycle of Equity ‘Crashes’** (**defined as 20 – 40% declines) comes back into play.
That 7-Year Cycle timed the completion, or low points, of crashes that bottomed in Jan ‘16, Mar ‘09 and Oct ‘02.
This could easily be corroborated by the 16-Month Cycle and its half-cycle – the 8-Month Cycle (see diagram in adjacent column). The 8-Month Cycle next comes into play in Jan/Feb ‘22 and has been discussed in the context of the converging ~2-Year Cycle – at that time. The June ‘21 INSIIDE Track revisited this topic, when stating the following:
5-28-21 – “One of the leading/overriding factors influencing this outlook is the 16-Month Cycle (and its half-cycle – an ~8-Month Cycle) – which last timed the Feb. ‘20 peak and led to a sharp correction in the 4 – 5 weeks that followed. Prior to that peak, equities had topped in Oct. ‘18 and underwent another sharp sell-off – stretching into/through Dec. ‘18…
A multi-month peak in Jan./Feb. ‘22 – 8 months from the May/June ‘21 cycle high – would also reinforce another cycle that has been uncanny throughout much of the past decade – the 2-Year Cycle.
It would arrive 2 years from the Jan./Feb. ’20 high, which was 2 years from the Jan ’18 high that was 2 years from the Jan/Feb ’16 low that was 2 years from the Jan ’14 low.]”
The 7-Year Cycle
Another corresponding cycle has been discussed (in INSIIDE Track and related publications) since the 1990’s and is also fairly consistent. It is a ~7-Year Cycle and was cited when projecting multi-year equity tops for 2000 and 2007… and resulting ’crashes’ into 2002 & 2009.
In 2008/2009, it began to gain a lot of popularity and was often described as the Shemitah Cycle – linked to the Old Testament cycle governing the nation of Israel that was described in the 1990’s – when others began to quote this cycle.
It recurred in 2014/2015 (high) and 2016 (crash low) – when Asian and European equities were hit the hardest.
All of those occurrences project focus to 2021/2022 into 2023 for the next potential ’crash’ (stock market peaks have occurred at a 7+-year interval while stock market lows have occurred at a >7-year interval). With the majority of the most recent highs occurring in 2015, the next peak could easily stretch into 2022.
2021/2022 also represents the midpoint of an overlapping ~14-Year Cycle that timed market sell-offs in 2001, 1987, 1973, 1959 and 1931. A broader ~28-Year Cycle concurs.
The 3.25-Year Cycle
Another corroborating cycle was last highlighted in late-2018/early-2019 when anticipating a 6 – 12 month (or longer) bottom in stocks. It is illustrated in the diagram above – taken right from late-2018/early-2019 publications that also included the related price targets for a major low.
That 3.25-Year Cycle was powerfully validated with the Dec. ’18 low in stocks and projected an overall advance into 1Q ’22 – when the next phase should invert and time a 1 – 2 year (or longer) peak.
So, there is quite a bit of synergy coming into play in 2022; particularly in 1Q ’22. (Before that time, there is still the potential for a second corrective period in the majority of stocks – following their May – July sell-offs.)
However, 2022 would be the first time (since 2007 – 2009) that a significant convergence of natural cycles ALSO occurs – creating what could be a Perfect Storm of colliding cycles…
Stocks & Solar Cycles?
There is another cycle that corroborates this outlook and is worth reiterating. It involves a pivotal ~34-Year Cycle (33.5 – 34.4 years) that is both a multiple of the 17-Year Cycle and the solar-related ~11.2-Year Cycle. This cycle was cited extensively in 2006/2007 – as it projected a “35 – 50% crash in a 1 – 3 year period” – and prior to that, in 1999 – 2001.
Consider the following major rallies in equity markets, dating back to 1857 and each lasting 33 – 34 years in duration (with some overlapping others)…
Oct. 1857 low – May 1890 high
Aug 1896 low – Sept 1929 high
July 1932 low – Feb 1966 high
Oct 1966 low – Jan/Mar 2000 high
Oct 1974 low – Oct 2007 high
Aug 1982 low – Aug 2015 high
Oct 1987 low – 2021/2022 peak
The bottom line is that long-term cycles – many natural and many market-specific – are all coming to a head in 2022, immediately after the latest 40-Year Cycle reaches fruition (2021).
It is likely to usher in a new and volatile 40-Year Cycle!…
Stock Indexes (except for S+P 500 & NQ-100, being supported by a few key stocks) have consolidated after fulfilling their 1 – 2 year outlooks from 2020 that forecast a major advance from late-March ‘20 (when multi-year cycles bottomed) into May/June ‘21.
A multi-month peak was forecast for May/June ‘21 – the latest phase of an uncanny ~16-month cycle that has governed the majority of equities for several years. That cycle previously helped pinpoint the Sept/Oct ‘18 and Jan/Feb ‘20 highs as well as the sharp declines that followed each.
Most of the indexes fulfilled that cycle peak – topping in May/June ‘21 and triggering 15 – 30% corrections in a diverse array of sectors and stocks. Those stocks and indexes – with the DJTA and Russell 2000 in the lead – were projected to initially bottom during the week of July 19 – 23, with July 19 forecast to create a blow-off low in a majority of stocks.
During that time frame, many completed multi-month declines, as airline (AAL, DAL, LUV & UAL) and other transportation stocks dropped 25 – 30%, key energy stocks dropped 20 – 30% (BP, MRO, APA, SLB, HAL, etc.), many metals stocks dropped ~20% (with some, like AEM, NEM, etc. stretching those losses into July 23 cycle lows).
Financial stocks took a hit with key bank stocks like C & BAC down 15 – 20% during that period. And one of the primary ‘proxy stocks’ – that was cited in reference to a July sell-off (NFLX) – dropped almost 10% from July 15 – July 23. That sell-off represented the culmination of an initial 1 – 2 month decline, with key downside extreme targets attacked.
Price action validated the potential for a July 19 blow-off low with many indexes spiking right to their weekly HLS (extreme downside target) and rising weekly 21 MAC support as the Russell 2000 retested 5+-month lows and held, while fulfilling a ~6-week low-high-high-high-(low) Cycle Progression.
Then came the month of August, when a similar decline was expected – surrounding the middle part of the month. That action produced some key revelations regarding the outlook for 3Q ’21 – and likely altered one important expectation.
For starters, August ’21 was expected to mimic the pattern of July and trigger another quick, sharp drop into Aug 19…
8-18-21 – “In addition, Stocks entered the same time of month when they experienced quick, sharp 3 – 5 day sell-offs in each of the past 3 months – a type of 30-day/ degree cycle. The DJIA had sharp drops on May 14 – 19, June 14 – 19 and July 14 – 19.
Similarly, stocks – and particularly the NQ-100 – were expected to see similar plunges on Aug 13/16 into Aug 19/20… and would likely spur a near-term drop to 14,710/NQU – this week’s HLS.”
They did exactly that, dropping from Aug 13/16 (14 was a Saturday) into Aug 19 – repeating the action of the preceding 3 months. There were some key indicators – triggered or not triggered at that time – that are adding some clarity to the intermediate outlook.
Most notably, several indexes again tested and held weekly HLS levels (extreme downside targets on a weekly basis; the NQU bottomed precisely at 14,710) while the stronger indexes (S+P 500, NQ-100 and even DJIA) failed to turn their daily trends down – leaving their 2 – 4 week uptrends intact.
That prevented those indexes from elevating that sell-off into anything larger then a 1 – 2 week correction… displaying additional underlying strength.
Soon after, other indexes (Russell 2000, S+P Midcap 400, etc.) turned their short-term trends back up and projected new highs. That is increasing the likelihood to extend this rally into [reserved for subscribers]…
The Dollar Index triggered a new buy signal in early-Aug, projecting a rally to 93.70 – 93.90/DXU before another intermediate peak. That was fulfilled and signaled a larger-magnitude correction that has been forecast to drop to ~91.50/DXU (see Weekly Re-Lays for all shorter-term analysis) – the ‘4th wave of lesser degree’ on dual levels. That could include a brief spike down to ~91.20/DXU.
That is where it currently stands with expectations for a low in mid-Sept with the weekly trend likely to hone the outlook for 4Q ‘21.
On a longer-term basis, the Dollar Index likely completed a 4+-year ’A-B-C’ decline in 2Q ’21 while perpetuating an uncanny 38 – 41 month cycle. That should lead to another advance, stretching into 2023 – when an uncanny ~3-Year Cycle recurs…
Bitcoin remains strong and reached its 1 – 2 month upside target near ~50,000/BT. A spike up to 53,500 – 55,00/BTU is possible before mid-Sept. On balance, the monthly & weekly trends project a retest of the high near 65,000/BT.”
Based on its monthly trend pattern in June ’21 – while fulfilling downside targets at ~29,000/BT – Bitcoin continues to project an overall surge to new all-time highs (above 65,000/BT) before a major top becomes most likely. Projected Dollar strength & equity weakness in 2022 could burden cryptos throughout the year. If Bitcoin can peak in 4Q ’21, it will powerfully corroborate the outlook for 2022 and fulfill the 40-Year Cycle of Currency Wars – culminating a prime candidate for ‘Bubble of the Decade’!
Why is 2022 Bearish for Cryptos & Stocks (and Bullish for US Dollar)?
What would that mean for the future of cryptos?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.