Interest Rates: Bonds Peaking as Stocks Project Surge into May ‘21.
05-29-20 – Stocks remain strong, surging after precisely fulfilling the 1Q ’20 expectations linked to the 2-Year Cycle AND the 40-Year Cycle – as well as multiple indicators and some uncanny weekly cycles in the DJTA – all of which forecast a sharp sell-off during the second half of Feb. ‘20 and lasting into March 23 – 27.
If the DJIA continues to follow the 40-Year Cycle, as it has done so in an uncanny manner throughout 2018 – 2020, it could wait until April/May 2021 to set its next 3 – 6 month (or longer) peak. That is 40 years from the 1981 peak. That is only one miniscule factor in the outlook for equities, so it should not be given too much weight on its own.
There are, however, some reinforcing factors. One of them is the most accurate monthly cycle of the past decade – the 16-Month Cycle (and its half-cycle, an 8-month cycle). That has been most accurate and most readily observable in the DJTA.
Leading into 2020, the Transports were forecast to set a 3 – 6 month (or longer) peak in mid-to-late-January – fulfilling a 16-month low-low-low-low-high-(high) Cycle Progression (and the latest phase of a corresponding 8-month cycle). See diagrams on this page. The fulfillment of that Jan. ‘20 cycle peak would reinforce focus on May ‘21 for a similar peak.
Reinforcing that outlook, the Transports fulfilled an uncanny 11 – 12 week high-high-high-high-low-low-low-low-high-(high) Cycle Progression that projected a multi-month peak and subsequent 7 – 8 week decline following a Jan. 17 – 24, ’20 cycle peak. Sure enough, the DJTA reversed lower in late-Jan. ’20 – fulfilling all those cycles – and equities plunged into March 23 – 27, when cycles bottomed.
An interesting aspect of the April/May ‘21 time frame – and the potential for another peak at that time – is the symmetry it would provide in several indexes… as well as the potential for an expanding triangle on a multi-year basis.
In Oct. – Dec. ’18, stocks plunged for 2+ months. In Jan. – Mar. ’20, stocks plunged for 2+ months. In between, they rallied for 13 – 14 months – from Dec. ‘18 into Jan.(/Feb.) 2020. If the Mar. ’20 low holds, a 13 – 14 month rally would peak in April/May ’21.
A peak in May ‘21 would also fulfill an over-arching 32-month low (Jun ’13) – low (Jan. ‘16) – high (Sept. ’18) – high (May ‘21) Cycle Progression in the DJTA and other indexes.
The ideal scenario would have another form of divergence at that time, with [reserved for subscribers]…
And that would continue to fulfill what has been forecast for 2018 – 2022. Since late-2017, that outlook has been frequently repeated and involves a wide and volatile range of trading with stocks forecast to experience at least 3 – 4 declines of 10% or more and at least 2 declines of 20% or more as sharp declines quickly give way to strong rallies… and vice-versa. That remains the outlook…
Bonds & Notes are powerfully confirming the 6 – 12 month outlook – for a 6 – 8 month uptrend from cycle lows in Nov. ‘19 into cycle highs in mid-2020 – and the multi-year outlook that has also been projecting a major peak in June/July ‘20.
These cycles raised the warning signs after signaling a 4th wave low in Dec. ‘19 and projecting a wave ‘5’ advance into mid-2020 – the fulfillment of a textbook, 4-year low-low-low-low-high-high-(high) Cycle Progression.”
Bonds & Notes are poised to set a major, multi-year peak (and corresponding bottom in interest rates) in/around July ’20 – while fulfilling analysis for a final, wave 5 of V advance into a multi-year peak in July ’20. Longer-term cycles projected a China-focused ‘Global-Shaping Event’ and Stock Market Panic in early-2020 (see March 2019 INSIIDE Track for details)… likely spurring this final drop in interest rates.
In sync with numerous cycles, that sharp stock sell-off was projected to bottom on March 23 – 27 and begin a new 12 – 18 month advance into May ‘21. If that is accurate, Bonds could begin to fall when the masses recognize this next stock market rally.
2020/2021 represent final, culminating years of 40-Year & 80-Year Cycles (see Nov ’19 INSIIDE Track) – timing everything from War (watch late-2021 into late-2025), Climate (Drought Cycles peak in 2021/22 and transition to Deluge Cycles in 2022/23), Agriculture, Currency Wars… and ultimately Interest Rates. The first ~5 months of 2020 have powerfully validated that ongoing analysis!
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.