Interest Rates: Bonds Fulfilling 4Q ’19 Sell-off; July ’20 = Major Cycle Peak
Outlook 2019/2020: The ~11-Year Cycle – Part II
09-30-19 – Late-Aug./early-Sept. ’19 ushered in a transition phase on so many levels, its significance should not be underestimated…
For starters, there was the stock market. Since 2017, a primary focus has been on 3Q ’19 – ideally on late-Aug. ’19 – for the culmination of another sharp sell-off…
Then there were precious metals. They surged into late-Aug./early-Sept. with Gold perpetuating an extremely unique web of weekly cycles (~14-week, ~28-week, ~56-week and even ~112-week cycles) that has governed its action since 2011.
That action ushered in what should be a multi-month peak and projected an initial, intermediate sell-off to 1460 – 1470/GC & 16.50 – 16.80/SI.
Overlapping that, Bitcoin & Cryptocurrency – which had already signaled a 3 – 6 month peak in late-June ‘19 – declined into late-August, reinforcing intermediate analysis and cycles.
After a bounce into early-Sept., Bitcoin generated another sell signal and projected a new plunge into [reserved for subscribers]…
Grain markets sold off into early-Sept., setting secondary lows while completing ‘b’ or ‘2’ wave pullbacks. That was/is expected to spur a new multi-month rally, with Soybeans projecting rallies that could easily reach new year-long highs [reserved for subscribers]…
There is another overriding cycle that could also be playing a role, even though it is considered more general and abstract. It does, however, govern the explosive nature of the Sun which does have a measurable impact on Earth…
11-Year Cycle
The Sun goes through an approximate 11-Year Cycle (11.2 years is the most recent average) that envelopes its activity peaks to troughs and back to peaks again. So, 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 and the most active phases are also divided by about 11 years.
In a strong parallel to Earth’s 17-Year Cycle – and its overlapping and more consistent 34-Year Cycle – the Sun possesses a 22-Year Cycle that is able to filter out some of the ‘white noise’ and demonstrate a stronger correlation between sunspot peaks or troughs and coinciding events.
It is that 22-Year Solar Polar Cycle that is a more precise or consistent cycle, partially due to how the Sun’s magnetic oscillations evolve. During each ~11-Year Cycle, the Sun alternates the polarity of its sunspots – basically from northern-oriented to southern-oriented… and then back again.
So, it takes a full ~22-Year Cycle to return to a similar phase (with similar polarity) as its predecessor… Previously, I made reference to another moderate link that now deserves some added attention and reiteration…
The reason I refer to it as a ’moderate link’ is due to the small number of data points involved. However, it has maintained a 100% correlation – with those data points – so it should not be ignored. The data points all involve the time when the Sun is exiting its lowest point of solar activity – when few or no sunspots are detected for many months – and then begins to enter its next Solar Cycle with an intensification of these solar storms. Like so many cycle transitions, this shift is often when the most abrupt reactions are witnessed in our world.
As is always important with analysis like this, I view it from an imprecise-enough perspective to be realistic. In other words, I am not foolish enough to expect related events to occur every ~11.2 or ~22.5 years on the dot. Instead, I view this cycle as an approximate 2-year period when the trough and subsequent surge in solar storms occurs.
With that said, see if you notice anything similar to the following time frames – each of which represent the same start of a new Solar Cycle – when a sudden burst of solar storms begins after a prolonged dormant period:
1867 – 1869, 1974 – 1976 & 1996 – 1998
Now add in 2019 – 2021, the expected transition into Solar Cycle 25. If you haven’t noticed the common thread yet, let’s throw in a few names: Johnson, Nixon, Clinton & Trump. In the history of the United States, the only four attempts or movements toward impeachment happened in lockstep with this volatile solar cycle transition.
Admittedly, that is a small data set. But it is 100% accurate (assuming that Solar Cycle 25 begins within the next 1 – 2 years) and occurs in sync with the other discussions already centering around the ~11-Year Cycle and the upheaval it has timed.
Late-2019 times momentous cycles… 11 years from the start of a previous price-inflationary period from late-2008/early-2009 into 2011/2012. It marks the convergence of major seismic cycles. And it times a unique cycle of US geopolitical upheaval. Perhaps even more important, it is the time when the Sun could finally come back to life! Could we see some fireworks (begin) in 4Q ’19? IT
Bonds & Notes sold off in lockstep with the most significant annual reversal period of the past 4 years (late-Aug./early-Sept.) – a time that has spurred sharp sell-offs during each year since 2015 (a ~360-degree ‘high-high-high’ cycle that reinforced 2019 similarities to 2015). In 2018, that drop lasted into early-Oct.
From a wave perspective, they experienced their largest sell-off of the year and their largest decline since that previous annual one in Sept. 2018 – fulfilling that 360-degree cycle but leaving them in a very uncertain period.
They are trading in the middle of a ~2-month trading range – creating some ambiguity regarding the next intermediate cycle in mid-to-late-Oct. (the next phase of a 13 – 14 week/~90-degree low-low-low-low Cycle Progression). With the weekly trends failing to turn down, that increases the potential for Oct. 14 – 25 to time a high (inverting the cycle) – even if it is just a retest of the previous peaks. Could this be revealing anything about equities?
That will likely be clarified in the coming days (and updated in the Weekly Re-Lay). Looking ahead, a multi-month low is expected in late-2019/early-2020 followed by the next important cycle high – expected in May – July ‘20.
Bonds have traced out a consistent 4-Year Cycle (since 1996) that timed more recent peaks in June/July ‘12 and July ‘16. Prior to that, they set lows in June ‘08, May ‘04, May ‘00 (a secondary low after late-’99 events spurred a dramatic drop into Jan. ‘00) and June ‘96. That creates a textbook, 4-year low-low-low-low-high-high-(high) Cycle Progression – next peaking in mid-’20.”
Bonds & Notes remain focused on mid-2020 (July ’20 = greatest synergy of cycles) for a major, multi-year peak… and corresponding low in interest rates. To set the stage for a final rally, they are expected to first decline into late-2019… and then enter a final, wave 5 of V advance into a multi-year peak. Longer-term cycles portend a ‘Global-Shaping Event’ and Stock Market Panic in late-2019/early-2020 (see March 2019 INSIIDE Track for details)… likely spurring a final drop in interest rates.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.