Crude/Energy Complex Bottoming.

Crude/Energy Complex Bottoming.
1Q ’16 Low Intact; 3Q ’17 = Focus.
2017 – 2019 Could Mimic 1977 – 1980

 

01/19/17 40-Year Cycle: Stocks in 2017–2021

2017-2021

The Reaction…

          01-19-17 – Having closed the books on 2015/2016 – the first phase of a 40-Year Cycle transition – it is time to look ahead and scan the horizon for what could come to pass in the next 3–5 years…Similar to the ’Roadmap’ provided in late-2014 – for what was generally expected to unfold in 2015–2016 – this ’Roadmap II’ is intended to… revisit the basic expectations for the 40-Year Cycle…
A Generational Shift

Throughout the past decade, I have discussed my perspective on the uncanny 40-Year Cycle and what (I believe) it holds in store for 2017–2021.  Some of the most important clues were derived from previous phases of that 40-Year Cycle – a cycle that has governed the entire existence of America.  [If there were more documentation to back it up, I would contend the 40-Year Cycle has impacted most of human history.]

Those phases include the years of 1773–1781, 1813–1821, 1853–1861, 1893–1901, 1933–1941 & 1973–1981 – projecting focus to the 7th and most decisive phase in 2013–2021…

In most of those cases, the ‘3’–’6’ years (and into part of the ‘7’ year) would time the precursor events – the ramifications of which would be more strongly felt and recognized in the ‘7’–’1’ years (i.e. 1933–1936 & 1937–1941, etc.).

In many cases, the ‘7’ year also experienced serious ’Panics’ of some sort… a reaction to the events that had preceded it (see page 8).

In the current phase, that augured initial events (the projected ‘actions’) in 2013–early-2017 followed by the consequences (resulting ‘reactions’) in 2017–2021.  (That does not automatically project a panic in 2017, although there are some convincing down cycles from early-2017 into March 2018… see Dec. ‘16 & Jan. ‘17 INSIIDE Tracks.)…

Fiat Full Force

The latest phase of this 40-Year Cycle – in 1973–1981 – witnessed some repeated similarities… and some stark distinctions.  There was again a fierce battle between paper & hard currency – highlighted by these watershed events:

— Nixon Gold Shock of 1971

— Collapse of Bretton Woods in 1973

— Oil/Dollar Marriage in 1973–1975

— Jamaica Agreement of 1976

That perfect storm of inflationary events (all of which threw off the accountability & stability of gold-backed currency and flung open the door to inflationary paper currency) – triggered the most intense commodity inflation of the past century, most acute in 1977–1980.

During the 1977–1982 period, the stock market had two 15–18 month declines of 25–30% each.  In between those two declines, the DJIA had two additional noteworthy drops – lasting 2–3 months each and shedding 15–20% of its value, each time.

So, in that 4–5 year period, there were four stock market declines of 15–30%.

That is just one of many reasons (cyclical, technical, fundamental, geopolitical, climatological, geophysical, etc.) I have been expecting 2017–2021 to produce similar economic challenges… and why I still expect a more overt bear market to take hold in stocks in 2017/2018… In some ways, 2017–2022 could possess similarities to 1977–1982, particularly [reserved for subscribers]…”

 

Projected bottoming phase in Crude continues to unfold.  Sustained advance not likely until after mid-2017 (watch Sept. 2017 for early stage of new bull market).  Nov. ’16 INSIIDE Track recently elaborated on corresponding outlook for Natural Gas while Dec. ’16 INSIIDE Track explained intermediate cycles in Crude (expected to trigger a new sell-off after mi-Feb.).