Bonds & Notes Fulfilling New Sell Signal; ~12-Month Decline Projected.
Outlook 2021/2022 – ~34-Year Cycle
09-01-21 – 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.
That cycle also projects a future peak for Sept./Oct. ‘22 but does not indicate whether that would be a higher high. The more likely scenario is that it would be a lower high, following an initial decline and subsequent rally. The intervening ~8-Month Cycle could provide some clarity… in 1Q ’22.**
[**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…
Looking out beyond Sept. ‘21, another multi-month high is still expected in Jan./Feb. ‘22 – 8 months from the May/June ‘21 cycle high in most stocks – reinforcing the overall 16-Month Cycle as well as the uncanny 2-Year Cycle.
3 – 6 month & 6 – 12 month (and even 1 – 2 year) traders and investors should be lightening up on long positions leading into mid-Sept…
Bonds & Notes have slowly rebounded since fulfilling analysis for an initial low in Mar ‘21. That was projected to spur a 3 – 6 month advance into July/Aug ’21 – when they were expected to set a secondary peak. That would perpetuate an ~11-month low (Oct ’18) – high (Sept ’19) – high (Aug ’20) – high (July ’21) Cycle Progression.
They fulfilled that outlook but have not yet signaled an intermediate reversal lower. As a result, they have not yet removed the potential for an additional spike high.
On a broader basis, Bonds & Notes are slowly 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. Continued shortages – in everything from housing to automobiles – are likely to perpetuate some of that price inflation into 2022.
The primary 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. The next phase of that 4-Year Cycle comes into play in ~July 2024 and should time another multi-year (secondary) high.
In between those two major cycle highs, Bonds & Notes were/are expected to decline for 2 – 3 years and then rebound into mid-2024. That means that interest rates could slowly rise (and Bonds fall) in 2021 and 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 could have just begun adding to short positions.” TRADING INVOLVES SUBSTANTIAL RISK!
Bonds & Notes fulfilled projections for a rally from March ‘21 into July/Aug ’21 – when a secondary high was expected and when a new selling opportunity was identified (first was in 3Q ’20). That should lead to a new and sharper decline into ~3Q ’22. They fulfilled analysis for a multi-year peak in ~July ’20 (completing a multi-decade advance and wave structure) and should drop into at least 3Q ’22 (1/2 of 4-Year Cycle; with Oct ’22 representing a 4-year low-low cycle)… and ultimately (likely) into 2Q ’23.
Many factors were projecting an initial surge in inflation into 2021… and are portending a second surge into 2022… coinciding with multiple natural and geopolitical cycles. War Cycles are also knocking on the door. Overlapping this, many stock indexes were projected to peak in May/June ’21. A future peak (Jan/Feb ’22) could reinforce that a major top is forming and represent the final peak before ‘Crash Cycles’ kick in (2022/23). Chinese stocks are leading the way, having peaked in early-2021 and entering what should be a multi-year decline. They are expected to set an initial low in Aug ’21 and then bounce.
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 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.