Grain Markets (& Gold) Impacted by Solar Cycles; 2022 = Time for Shift.
Outlook 2022/2023 – Cycle Culminations
01-04-22 – 2016 – 2021 underwent another major economic shift and accompanying Currency War in line with the 40-Year Cycle of Currency Wars that has repeated since before the founding of the USA.
As described throughout the 2010’s, that cycle was expected to usher in a heightened battle against US Dollar hegemony around the globe and likely result in a new reality that would subsequently unfold in the 2020’s.
2016 – 2021 was forecast (in 2013 – 2016) to possess some subtle & some not-so-subtle ‘battles’ with a primary one projected to unfold between the US Dollar (fiat currency) and Gold (hard currency) – with Gold forecast to gain progressively throughout 2016 – 2021. At the same time, a third combatant entered the fray – digital or crypto-currency.
Even though the US Dollar Index – an index that reflects the Dollar’s perceived value versus a basket of other fiat currencies (the healthiest or least healthy horse in the glue factory) – was projected to rally from 2014 into 2017, Gold was forecast to enter another multi-year bull market in 2016 & stretch that into 2021.
The Golden Year
The synergy of cycles in 2016 was so significant that three years of articles, interviews and publications were devoted to discussing the impending bottom in Gold and why 2016 would usher in a new reality – dubbing 2016 as The Golden Year (‘The Golden Year’ – described throughout 2013 – 2015 – was the year when a new ~5-year advance would begin – see insiidetracktrading.com/wp-content/uploads/2018/07/ 2016-the-golden-year.pdf).
That Gold forecast was also tied into Solar Cycles (2020 – 2024), impending War Cycles (2021 – 2025) and Disease Cycles described in 2009 – 2014 (that projected a major viral or disease outbreak for 2019 – 2021 – see insiidetracktrading.com/wp-content/uploads/2020/04/ 2016-The-Golden-Year-III.pdf).
Gold & Economic Cycles
As it turned out, Gold bottomed in Dec. 2015, fulfilled almost everything written about 2016 (The Golden Year), and advanced into the final half of 2020 before peaking. That powerfully fulfilled the latest phase of this 40-Year Cycle of Currency Wars while ushering in the time (2021 – 2025) when the onset of a literal military conflict is cyclically likely.
2021/2022 ushers in a new cycle, with the opening years often the most dramatic (transitions are always the roughest period before a new, or revised, ‘norm’ begins to take hold). One need only look at the early 1820’s, 1860’s, 1900’s, 1940’s & 1980’s to verify this pattern. In many cases, those transitions also began new economic upswings… so they were not all bad.
2022 has the potential for some intriguing parallels and also some stark contrasts to that pattern. Part of that has to do with the principles governing cycle analysis and Hadik’s Cycle Progression…
40-Year Low-Low Cycles
In the first half of the USA’s history (roughly from 1780 – 1900), the movement of Gold swung similar to that of the economy. Stable and dependable Gold usually coincided with a stable and dependable economy (more or less). Conversely, panics in Gold (like 1869) led to panics in stocks.
Since ~1900, the correlation has been inconsistent. However, 2016 – 2021 was similar with both moving higher throughout that time frame and both suffering sharp setbacks in March ’20. In order to better understand what is expected for the coming years, it is important to review a related 40-Year Cycle that has timed pivotal lows in the US economy…
1782 – Start of new country (and financial system) after end of Revolutionary War (Treaty of Paris drafted on Nov 30, 1782; peace negotiations began in April 1782); first American commercial bank is opened and a new monetary system begins to take hold after the collapse of the Continentals (paper currency).
The chart above provides a broad illustration of the economic growth in America in 1700 – 1850 with the two intervening low points spread exactly 40 years apart (surprised?) – in ~1782 and ~1822.
1822 – Follows Panic of 1819 and recession of 1819 – 1821, one of the worst in US history. It included mass unemployment and plunging property values that bottomed in 1822. However, there were far-reaching ramifications of that Panic, particularly the heightened skepticism of paper money that it raised among the American public. That is why Gold’s movement synced with the economy. To quote:
“The national bank’s reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a protracted recession with mass unemployment and a sharp drop in property values that persisted until 1822.
The financial crisis raised doubts among the American public as to the efficacy of paper money, and in whose interests a national system of finance operated. Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the BUS in the 1830s. The national bank was in general disrepute among most Americans..” (wikipedia.org/wiki/Second_Bank_of_the_United_States)
1862 – Start of NY Gold Exchange; Along with stocks, gold rallied into 1869 (coincided with one of greatest bull markets in US stocks in 1860 – 1872)before Black Friday and a gold & stock crash surrounding an attempted corner on the gold market.
1902 – Stock market enters new advance following Panic of 1901 (attempt to corner Chicago rail market) – a sequence similar to what has played out in previous cycles as in 1822, following the Panic of 1819.
1942 – Stock market enters new advance following 1929 – 1942 bear market and 1937 – 1942 crash – setting one of its most significant lows in the 20th century (and the onset of one of the strongest advances).
1982 – Stock market enters new advance following 1966 – 1982 consolidation that included 1966 – 67 sell-off, 1973 – 1974 (50%) crash, 1976 – 1978 (~29%) decline, 1981 – 1982 (25%) drop – setting perhaps the most significant low in the 20th century (and the onset of the strongest overall advance).
While this might normally be perceived to augur a subsequent low in 2022 and the onset of a new multi-year advance, there are key reasons why this cycle is due for an inversion and why stocks could see a multi-year peak in 2022.
First and foremost is the 40-Year Cycle Progression illustrated at the top of this page. The decisive lows in the early 1860’s, 1900’s, 1940’s & 1980’s portend a likely inversion and a peak in 2022. That would fulfill a 40-Year low (~1862) – low (1902) – low (1942) – low (1982) – (high; 2022) Cycle Progression.
Reinforcing that is the 20-Year Cycle Progression illustrated at the top of this page. The decisive lows in 1942, 1962, 1982 & 2002 portend a (similar) likely inversion and a peak in 2022. That would fulfill a 20-Year low (1942) – low (1962) – low (1982) – low (2002) – (high; 2022) Cycle Progression.
Soybeans, Corn & Wheat are mixed with Wheat expected to extend its evolving bull market in 2022… Wheat had signaled a secondary low in Sept. and was expected to initially advance into mid-Nov ’21. That was seen and Wheat – along with Soybeans & Corn – entered corrective phases in late-Nov. Soybeans & Corn set intermediate lows but Wheat has extended its correction – making it comparable to that seen in 2Q ‘21.
Wheat has monthly trend support near 720.0/WH and 3 – 6 month wave support near 690.0/WH. Those levels should hold if Wheat is to enter a new 3 – 6 month (or longer) advance in the first half of 2022.
On a broader basis, Corn has consolidated since surging into 2Q ’21 and setting its highest monthly close on June 30 ’21. That fulfilled 3 – 6 month & 6 – 12 month analysis for an overall advance into July 2021 – the culmination/perpetuating of a 2-Year Cycle that already included 1 – 2 year (or longer) peaks in July ‘13, July ‘15, July ‘17 & July ‘19.
A future peak – higher or lower is yet to be determined – is likely in [reserved for subscribers]…
The midpoint of that ~4-year cycle could produce a secondary (higher) low in June – Aug ‘22 (and be followed by an overall advance into mid-2023). Since these are much broader cycles, intervening price action needs to validate this initial outlook.
Over the past few decades (and in keeping with the focus on Sunspot cycles), commodities have seen a related ~11-Year Cycle that created peaks in Sept/Oct 2000 and Sept/Oct 2011. That could push a final inflation/commodity price peak into Sept/Oct 2022 – when other related cycles concur.
If a final peak is likely to extend into Sept/Oct ‘22, a precursor peak was likely in Sept/Oct 2021 – when many related cycles converge. Sure enough, the GSCI (Goldman Sachs Commodity Index) surged into Sept ‘21 and set an intra-month peak in mid-Oct ‘21 – reinforcing analysis for a final peak in Sept/Oct ‘22 (1 year/360-degrees after the Oct ‘21 peak – fulfilling a ~1-year/360-degree low-high-high Cycle Progression as well as all existing cycles).
In the interim, the GSCI has a ~5-month/~21-week low-low-low-low Cycle Progression that next comes into play on Jan 10 – 17, ‘22 and should time the next intermediate turning point.”
Stocks are projected to peak as commodities portend another surge (perhaps weighing on equities now that inflation is becoming real). Wheat is projecting a parabolic move higher in 2022 – while Soybeans & Corn could see final surges, similar to the parabolic advances seen in 1973/1974. This is occurring as the final stage of a 40-Year Cycle of Drought & 80-Year Cycle of Agriculture (~2021) enters a transition year (2022) when volatile action is commonplace. It is also the time when parabolic moves are most likely (90/10 Rule of Cycles) before a dramatic shift takes hold.
~11-Year, ~40-Year & ~80-Year Cycles collide in 2022 and pinpoint what could be a seismic shift in natural (climate, precipitation, etc.), geopolitical and market cycles at the same time food/commodity inflation cycles culminate. 2022/2023 is expected to produce major disruptions including climate shifts (Drought/Deluge Cycles) and solar storms.
On a 1 – 3 year basis, Corn has a 3-year low (July ‘07) – low (Jun ‘10) – high (July ‘13) – high (June ‘16) – high (May/Jun ‘19) – high (May/June 2022) Cycle Progression – projecting the next 1 – 2 year peak. Wheat has a ~6-year low (‘04) – low (‘10) – low (‘16) – high (2022) Cycle Progression that is reinforced by a ~33-month low (3Q ‘16) – low (2Q ‘19) – high (1Q 2022) Cycle Progression. Soybeans have an ~8-month Cycle Progression that portends the latest peak now – in ~Jan ’22.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.