Bonds Validating ‘Seismic Shift’ Forecast for 2021/22.
Outlook 2022/2023 – Mid-Year Review
06-29-22 – In order to prepare for the second half of 2022 and all of 2023, it is crucial to review what was anticipated for this time period – and the months or years leading up to it – as well as what has transpired in the first six months of 2022.
On a 6 – 12 month basis, Nov ‘21 ushered in a decisive shift in the markets as three key stock indexes fulfilled major, multi-year upside price and wave (‘5’) targets and paved the way for a projected 6 – 12 month and possibly 1 – 2 year equity decline. At the same time, Bitcoin was attacking its major upside target and cycle highs – fulfilling the final phase of its projected bubble.
On the geopolitical landscape, Russia began to mount troops on Ukraine’s border as the long-forecast 80-Year Cycle of War began to take hold (late-2021 – late-2025). Gold & Silver had already signaled 6 – 12 month lows in late-Sept ’21 and were projected to surge into late-Feb ’22. These outlooks and analyses were part of a much bigger forecast…
2021 Culmination & Transition
For almost a decade, a momentous shift in major cycles has been anticipated for late-2021/early-2022. That was forecast to be preceded by the culmination of the latest 40-Year Cycle of Currency Wars (and many other things) in 2016 – 2021, with major rallies projected for Gold & Bitcoin leading into 2020/2021.
As those markets were fulfilling their projected parabolic advances, equity markets were going through a topping process with initial peaks in May ‘21 & early-Sept ‘21 – reinforcing analysis for subsequent peaks in early-Nov ‘21 and a final, divergent peak in early-Jan ‘22. The Jan ‘22 cycles fulfilled multi-month, multi-year & multi-decade cycles and were forecast to trigger the sharpest decline since Feb/Mar 2020.
A ‘seismic shift’ was forecast to begin in late-2021/early-2022 and usher in a very unsettled period in late-2021 – late-2025, when War Cycles returned and when Solar, Seismic & Volcano Cycles collide. In other words, 2022 is only the beginning…
2022 Shift & Inception (of New Cycle)
Throughout 2020/2021, our publications highlighted this culminating 7th phase of America’s 40-Year Cycle of Currency Wars (finales/shifts in 1781, 1821, 1861, 1901, 1941, 1981 & 2021) and explained why that – along with a myriad of corroborating cycles and indicators – should lead to a dramatic economic and financial shift in the years and decades that follow.
That Phase VII included a new antagonist with a three-way battle between fiat (paper), hard (metals) and digital (cryptos) currencies. A pair of Weekly Re-Lay Alerts published in May 2021 reiterated this, explaining why Bitcoin was about to enter the final stage of a massive bubble that should peak in 2021 (the title reflected that outlook) – reinforcing what had been forecast for Bitcoin in 2020/2021.
The May 27, ’21 Weekly Re-Lay Alert explained it this way:
5-27-21 – “The first five months of 2021 have powerfully reinforced the perspective on the current phase of ‘Currency Wars’ and the ongoing forecast – since 2015/2016 – that Gold and other anti-Dollar vehicles would move higher into 2021 (with accelerated advances projected for 3Q ‘20 – 2Q ‘21) as the Dollar corrected into 2021. At that point, the US Dollar was/is expected to set a multi-year low while Gold, Bitcoin, et al were forecast to set multi-year peaks.”
That built on what had been described in multiple issues of INSIIDE Track, including the May ’21 issue – which recapped what had been published during the preceding 5 – 6 years. This is critical to understand in order to place 2022 in proper context:
4-29-21 – “The markets have entered a momentous time when 5 – 10-year trends and shifts were projected to culminate, 40-year cycles and trends were projected to shift and larger-degree cycles – like the 80-Year Cycle of War – were projected to enter a new and decisive phase. At least part of these shifts are also linked to the uncanny influence of the ~11-Year Sunspot/Solar Cycle that bottomed in late-2019 and is likely to accelerate higher in 2021 and 2022.
That could create all kinds of unintended consequences… Among the events or shifts projected for 2020/ 2021 were:
– Completion and transition of ongoing 40-Year Cycle of Currency War.
– Parabolic phase in Gold/Silver bull markets as well as Bitcoin/crypto bull markets.
– Food Crisis Cycles prompting substantially higher prices in grains and foodstuffs – whether supply or demand related.
– Related accelerated advances in grains, beginning with Soybeans in 2020 and shifting to Wheat (and Corn) in 2021 and back to Soybeans in 2022.
– Culmination of US Dollar correction from 2017 peak (and onset of new 1 – 3 year advance) – in the first half of 2021.
– Major bottom and onset of multi-year uptrend in interest rates, beginning in mid-2020.
– Onset of multi-year war cycle linked to 80-Year Cycle of War (1781, 1861, 1941, 2021) – beginning in 2021 and impacting several years that follow.
In crucial respects, all of these expectations are related. The key is identifying the connecting threads and acting accordingly…”
With the benefit of 20/20 hindsight, it is now possible to better assess those 2020/2021 projections – some of which had been forecast for 5 – 10 years prior, pinpointing 2021/2022 as the time for their fulfillment and a massive shift:
Culmination of Currency War – √
Parabolic rally & peak in Bitcoin/cryptos – √
Parabolic surges & peak in Gold/Silver – √
Food Crises in 2020 – 2022 – √
Soybean, Wheat & Corn Surges in 2020 – 2022 – √
US Dollar Bottom in 2021 & 1 – 3 Year Advance – √
Multi-year uptrend in interest rates – √
Onset of War Cycle in late-2021 – √
The May 19, ’21 Weekly Re-Lay Alert (titled: “Rock, Paper, Scissors (Bitcoin Bubble?) and 4WoLD”) explained the connection between the currency combatants and why Bitcoin was entering the final stages of a major bubble.
5-19-21 – “Currency Wars Heat Up – Once again, the three primary ‘currencies’ – roughly categorized by fiat (paper, debt-backed), hard (metals) and digital (cryptos) – are swinging in close synchronicity when viewed from a broader vantagepoint…
Bitcoin fulfilled about 97% of the downside expectations it triggered when it fulfilled its major upside target at ~65,000/BT… That was projected to trigger a sharp plunge back toward ~29,000/BT – the 4th wave of lesser degree support…”
After fulfilling wave v of 3 of V in April ‘21, Bitcoin did bottom near 29,000/BT (4 of V) – in May/June ’21 – while maintaining positive weekly & monthly trends (see perceived wave structure in chart from Nov ‘21 reprinted on page 11). Those trends projected a rally back to the major high – reinforcing the perceived Elliott Wave structure and corroborating the outlook for a final blow-off top before the end of 2021…
Despite its limited history, Bitcoin had a 4-Year Cycle since its origin (the same cycle that also governs its ‘halving’; see page 2 diagram) – creating a ~4-Year low (2009) – high (Nov/ Dec ’13) – high (Nov/Dec ’17) – high (Nov/Dec ’21) Cycle Progression.
That 4-Year Cycle high powerfully reinforced its overall outlook, its Elliott Wave structure, the 40-Year Cycle of Currency Wars, cycles in the US Dollar, gold & interest rates, and a myriad of other cycles portending a ‘seismic shift’ in 2021/2022 as a multitude of generational cycles transitioned (the most volatile & dangerous time).
Bitcoin surged into Nov ’21 and spiked above the ‘3’ of ‘V’ peak – completing what was necessary for a ‘5’ of ‘V’ wave peak (see page 11) while fulfilling what the weekly & monthly trends had projected – coinciding with major cycle highs and ‘5th of 5th’ wave peaks in multiple stock indices (Russell 2000, DJTA & Nasdaq 100) and setting the stage for a bearish period that could/should extend until Sept ’22.
On a 6 – 12 month basis, Bitcoin remains on track for an overall decline into Sept ’22 and could easily reach its primary 1 – 2 year downside target at ~13,800. That is where the June ’19 peak took hold (resistance turned into support) and is where the current decline since March ’22 (‘C’ wave) would equal the magnitude of the initial decline (‘A’ wave) from Nov ’21 into Jan ’22.
It is also where the 80/20 Rule of Bubbles would be fulfilled. This principle was displayed and discussed in 2002 with regard to tech stocks and in 2015/2016 with the XAU. (It also applied to Japanese stocks in the 1990’s.) In all these cases, and potentially in Bitcoin, a bubble gives back roughly 80% of its value and drops to a level that is ~20% of its peak price.
Japanese stocks peaked in 1989. The dot.com bubble peaked in early-2000. The XAU bubble peaked in late-2010 – almost 11 years later (Solar Cycle correlation??). And, the Bitcoin bubble peaked in late-2021 – almost 11 years later.
Will it ultimately lose 80% of its peak value?
Appetite for Risk
As discussed last month, the stock market reflects so much about our (society’s) priorities & problems, hopes & dreams, fears & anxieties – so it is a great place to look for current & future concerns.
As a result, stock market cycles reflect far more than just stock price movement or turns. They reflect developing underlying shifts that are often not apparent until weeks or months after the markets have begun to factor them in.
Speculation in cryptocurrency is often tied to stock market swings with pundits often referring to investors’ ‘waning appetite for risk’ as a reason for declining prices in Bitcoin, et al.
That dovetails with equity analysis published in Nov ‘21, when at least three primary indexes (Russell 2000, NQ-100 & DJTA) fulfilled multi-year upside targets and ‘5th of 5th’ wave peaks – signaling 6 – 12 month (or longer) peaks and the onset of a major sell-off. The stronger indexes were projected to diverge and provide brief spike highs in early-Jan ‘22 – before an accelerated decline (roller-coaster analogy).
Déjà vu?
As stocks were signaling the culmination of 8-month, 2-Year, 3.25-Year, 20-Year & 40-Year Cycles – in Jan ‘22 – another long-term cycle was also projecting a Jan ‘22 peak followed by a prolonged sell-off in stocks – a sell-off that could stretch out for the better part of 2 years. It is a cycle that has been prevalent for thousands of years. The Dec ‘21 INSIIDE Track explained why 2022/2023 was poised to resemble 1973/1974 when stocks underwent a ~2-year bear market:
Sabbath of Sabbaths
11-29-21 – A cycle of 49 – 50 years has been discussed before. Its origin dates back to (at least) the Old Testament and the book of Leviticus when Israel was being given a set of parameters for how to govern the land they were entering. One of the primary ‘rules’ had to do with agriculture and the principle of allowing the land to ‘rest’ during each 7th year…
That principle extends beyond just agriculture. After 7 of those 7-year periods, an additional year of ‘rest’ was necessary – a year of Jubilee – for the nutrients in the land and soil to replenish more thoroughly before being farmed again. The 49th and 50th years were critical and were when that principle of ‘jubilee’ was exercised – in society (debt, etc.) as well…
1973 – 1974 Redux?
The discussion of this 49 – 50 year cycle is laying the foundation for a related discussion – hypothesizing that 2022 – 2023 could possess some similarities (rhyme… NOT repeat) to 1973 – 1974. Several major events of 1973 – 1974 already possess potential parallels setting up for 2022 – 2023…
With the culmination of multiple long-term cycles in 2022 – including a 40-year low (1942) – low (1982) – high? (2022) Cycle Progression – the stage is set for a significant stock sell-off. The 7-Year Cycle of Stock Crashes (20 – 35% or greater declines that culminated in 2016, 2009, 2002, etc.) recurs in 2023 and creates a 2-year period that could rhyme with 1973 – 74…
Stock Indices fulfilled upside objectives – in time and price… the expected 1Q ‘22 peak could be another divergent one with some stocks/indexes setting higher highs while others set equal or lower highs. That is reinforced by the price action, and price objectives met, during the surge into early-Nov. By reaching key upside price and wave targets, some key indexes projected ‘a more substantial sell-off’…
The Russell 2K fulfilled that wave objective and a host of decisive upside targets… By spiking to new intra-year highs (fulfilling its weekly trend and monthly trend patterns) AND fulfilling its Elliott Wave objective AND attaining this multi-year upside target, the Russell 2000 ushered in the time for a sharper decline… after completing its wave structure.
In the same month the Russell 2000 was fulfilling that synergy of upside targets, the NQ-100 peaked right at its multi-month upside target (~16,700/NQ) and reversed lower…Another (leading) index also fulfilled major upside objectives in Nov ‘21 – related to a potential wave ‘5’ surge and culmination.
In that case also, the attainment of a major upside target reinforced the potential for a larger-scale decline…
The most important takeaway from stock market action in Nov. ‘21 is that many significant stocks and indexes have fulfilled 1 – 2 year upside targets – on multiple levels – ushering in a potential topping process that could stretch into 1Q ‘22 (when the stronger indexes – like the S+P 500 and NQ-100 – could set their final highs as other indexes diverge).
They have also completed wave structures that augur a significant correction. Even the NQ-100 is reflecting waning strength…
1Q ‘22 Review
11-30-21 – 1Q ‘22 (most synergistic in Jan/Feb ‘22 and ideally in Jan ‘22) 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 1 – 2 year (or longer) 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.
As the markets have been moving toward 1Q ‘22, repeated corroborating factors have emerged. A multi-week peak in early-Sept ‘21 was projected and increased the likelihood for a multi-month peak in Jan ‘22 (4-month high-high-high Cycle Progression).
After that was fulfilled, focus turned to early-Nov ’21 – when another multi-week peak was forecast. It has now been fulfilled and increases the likelihood for a multi-month or multi-quarter peak in Jan ‘22 (2-month high-high-high Cycle Progression).
And that would also dovetail with the 2-Year Cycle that was detailed extensively in 2018 and again in 2020. Both times, it created peaks in Jan/Feb of those respective years – as well as subsequent peaks in Sept/Oct ‘18 & ‘20 – and is on track to create a similar peak in Jan/Feb ‘22…
3 – 6 month & 6 – 12 month (and even 1 – 2 year) traders and investors should have been lightening up on long positions in early-Sept.”
All of this analysis – from April – Nov ‘21 (as well as years of corroborating analysis from 2015 – 2021) – reinforced why late-2021/early-2022 was expected to trigger a massive shift in the financial markets, culminate a bubble in cryptos, usher in War Cycles, provide a unique parallel to 1973/1974, and trigger a major sell-off in stocks (that would likely not culminate until 2023) – the opening salvos of a larger battle.
The first six months of 2022 have powerfully fulfilled and validated those projections and pave the way for what is expected in the next 6 – 18 months…
Bonds & Notes, on an intra-month basis, spiked below major support at their 2018 lows – ~136 – 137-00/US & ~117 – 118-00/TY – but would not signal a break of that support until/unless a monthly close below it. That also had Bonds retesting pivotal range support at ~135-00/US. That was/is the convergence of ~10-point, ~15-point & ~20-point ranges created over the past several years.
This action leaves intact the potential for a sizeable rally between mid-June and late-July, possibly stretching into early-Aug ‘22 – before the next multi-month peak is expected.
On a monthly cycle basis, Bonds & Notes could see a substantial rally – in the next ~4 weeks – and perpetuate a ~12-month/~360-degree cycle that has timed sequential highs. They set pairs of highs in July/Aug ’18, July/Aug ’19, July/Aug ’20 & July/Aug ’21 (the most recent two phases – in 2020 & 2021 – were both set during the first week of August).
These annual cycles reinforced the ~4-Year Cycle that timed multi-year peaks in July ’12, July ’16 & July ’20 (and which is likely to time a lower high in ~July ’24). If they are going to fulfill analysis for another multi-month high in July ’22 (potentially stretching into early-Aug ’22), Bonds & Notes would need to rally back to [reserved for subscribers] – by early-Aug.
Longer-term investors and hedgers could have liquidated long positions in Bonds & Notes in 3Q ‘20 and sold intermediate rallies in 3Q/4Q ‘20 and added to short positions in Aug ‘21, in sync with trading strategies described in INSIIDE Track. 3 – 6 month traders could have just covered a portion of these short positions, looking to re-establish in early-Aug.” TRADING INVOLVES SUBSTANTIAL RISK!
Bonds & Notes are poised for a rebound peak in late-July/early-Aug ’22 followed by another drop to new lows. Inflation cycles are poised to keep pressure on Bonds (and consequently stocks) in 2022 and to ultimately push interest rates higher into March/April ‘23.
2021/2022 was expected to usher in a dramatic shift in multi-decade cycles (40-Year & 80-Year Cycles) – timing everything from now-validated War Cycles (late-2021 into late-2025), European Unification Cycles (2022 – 2025), Drought Cycles that peak in 2021/22 and shift to Deluge Cycles in 2022/23, Agriculture Cycles that time 80-Year shifts (beginning in 2022/23), Currency Wars (2021)… and Interest Rates.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.