Bonds & Notes on Track for Rally into ~July ’21; Sharper Rate Rise to Follow.
Outlook 2021/2022 – Solar Cycle Synergy
05-28-21 – 2021 – 2022 is expected to time the latest upswing in the ~11-Year Sunspot/Solar Cycle that bottomed in late-2019. That is just one of many converging cycles – some that are many decades in duration – that collide in the 2021 – 2024 period… with initial focus and emphasis on those converging in 2021/2022.
As warned last issue, the resurgence of sunspot activity could create all kinds of unintended consequences as sudden solar storms can impact Earth’s geomagnetic fields with only a couple days’ warning. There have even been some in more recent history (last 50 – 100 years) that arrived in less than a day… that’s not much warning!
2021/2022 has cyclic relation to many previous (significant) solar storms and is expected to be an unstable period. As a result, it is no surprise that so many related market cycles could have a corresponding impact. They include inflationary cycles, interest rate cycles, stock market crash cycles, gold & silver cycles, and even US Dollar cycles.
Before getting into any of this, however, it is important to get a little better understanding – and appreciation – for one of the most consistent cycles governing solar activity (the other one is the 40-Year Great Conveyor Belt Cycle of the Sun’s storms)…
The Sun goes through an approximate 11-Year Cycle (11.2 years is the most recent average) that times its activity peaks-to-troughs-and-back-to-peaks again… a high-low-high cycle.
Consequently, the lowest levels of solar activity (solar storms/sunspots and the resulting electromagnetic storms that are often hurled toward Earth) are divided by about 11 years. Similarly, the most active phases are also divided by about 11 years.
That ~11-Year Sunspot Cycle is closely linked to a 10 – 11-Year Cycle of Earth Disturbances that pegged major quakes in 2010 – 2011 and was expected to recur in 2021 – 2022 (with related volcano cycles overlapping both of those periods of time and stretching an unstable period into 2024).
Not surprisingly, the Sun’s 11-Year Cycle also overlaps a similar 11-Year Cycle of Stock Panics and Global Shaping Events – described in Feb/Mar 2019. That analysis explained how multiple cycles would converge in late-2019/early-2020 and trigger a ‘global-shaping event’ (Covid ‘19???) and resulting stock panic… just as the Solar Cycle was awakening.
In recent decades, the prior phases of the 11-Year Cycle of Stock Panics timed the events of 1997 – 1998 (11 years after the stock market crash of 1987) when the economic world was rocked by a pair of crises – the Asian Financial Crisis and the Russian Ruble Crisis – in 1997 & 1998.
11 years after the events of 1997 – 1998, in 2008 – 2009, a larger global collapse ensued – bottoming in March 2009. 11 years after that, another stock meltdown was forecast – projected to bottom in March ‘20.
The markets adhered closely to that cycle, plunging into March ‘20 – when a new 1 – 2 year bottom was forecast… and when it ultimately took hold.
Solar Storms & Synergy
Dec. 2019 ushered in the current Solar Cycle – #25. As we now know, it also ushered in global-shifting events (most notably – Covid-19) and coincided with the anticipated 11-Year Cycle of Stock Panic Cycles forecast for early-2020.
While that timed the nadir – or low point – between Solar Cycle 24 & 25, it is the subsequent, upward acceleration period with which I am most concerned. That comes into play in 2021 – (2024 – 2026??). In order to get an idea of the amount of solar activity during a ‘normal’ cycle, take a look at the above chart and note that the mid-2010’s peak was NOT a normal one…
In forthcoming issues, I plan on elaborating on the chart on page 2. It shows solar activity dating back to 1750 with some specific periods highlighted. Every third peak is boxed in – highlighting the time when the ~11-Year Sunspot Cycle intersects the ~17-Year Earth Cycle (3 x 11.2 and 2 xs 17 = ~34 years).
That ~34-Year Cycle includes the sunspot peak in 1859–1861 and the greatest solar storm on record – the Carrington Event of 1859. It also includes the peak in 1956/1957 – when the Acheron Submarine Storm triggered a full-scale Naval alarm – and the peak in 1989 – 1993 timing the Quebec Storm that knocked out power in parts of Canada and was feared to trigger a domino effect down the U.S. East Coast.
~33 – 34 years (3 Solar Cycles) from that cycle peak is 2022 – 2026.
2022 – 2026 is also 6 Solar Cycles from the 1956/1957 storms and 15 Solar Cycles from the 1859 – 1862 Sunspot Cycle peak. There is much, much more to this discussion to follow…
Bonds & Notes have rebounded after setting a multi-month bottom in Mar. ’21 – the latest phase of a 64-week low-low-low Cycle Progression that links to the two most significant lows of the past few years (Oct. ’18 & Dec. ’19). As a result, the three most significant lows of the past three years are now spread in perfect symmetry.
That low turned the focus to the ongoing outlook for a secondary, lower high to be set in June – Aug. ‘21. With the latest low taking hold in late-March, a subsequent 50% rally in time (32 weeks down/16 weeks up) would take Bonds & Notes higher into July ’21.
That is also when an ~11-month low (Oct ’18) – high (Sept ’19) – high (Aug ’20) – high (July ’21) Cycle Progression recurs.
Notes are poised to reinforce that scenario by turning their weekly trend up. As described to Weekly Re-Lay readers, the biggest ‘pop’ (quick rally) could be seen in the second half of June IF [reserved for subscribers]…
On a broader basis, Bonds & Notes were projected to set a multi-year peak in July ’20 in perpetuation of 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 a secondary, lower 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. Wait until July ’21 before adding to short positions.” TRADING INVOLVES SUBSTANTIAL RISK!
Bonds & Notes have likely set a 3 – 6 month (or longer) bottom and should rally into July ’21 – when a secondary (lower) high is expected. They are in the early stages of a projected 2 – 3 year downtrend after fulfilling analysis for a multi-year peak in ~July ’20 AND projections for the top of a final, wave 5 of V advance (v of 5 of V). Many factors were projecting an initial surge in inflation into 2021… with other phases expected to follow. Bonds should drop into at least 3Q ’22 (1/2 of 4-Year Cycle; with Oct ’22 representing a 4-year low-low cycle) and likely longer (2Q ’23?).
This is also the early stages of projected inflationary surges in many commodities, likely to extend into 2022… coinciding with multiple natural and geopolitical cycles.
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.