Interest Rates: Bonds Project Rally into July ’20; ‘Stock Panic’ Imminent?
11-30-19 – “As the markets enter the final month of 2019, it is a good time to step back and view the forest for the trees. The ‘forest’ can be viewed on multiple levels – with the primary emphases on the recurrence and convergence of the 40-Year, 70-Year & 80-Year Cycles in 2019 – 2022.
That applies to the markets, to the Middle East, Europe and overall global geopolitics (including cycles of unification), to cycles of war, to ongoing currency battles and even to earth disturbances (watch late-Dec.).
Within that context, there are several key fundamentals to consider – when assessing the outlook for 2020. One of those (in no particular order) is the ongoing trade battle between the U.S. and China (that drags many other nations into the fray).
Another is the U.S. Election Cycle that is poised to enter a higher gear.
These two fundamentals are likely to merge in the coming months (as developments in the US/China trade war impact favorability or unfavorability of President Trump).
And then there is the role of Europe…
The 40-Year Cycle & Turkey
In the early-2010’s, INSIIDE Track described primary forecasts for Europe/US relations in 2013 – 2021 (with greatest synergy in and focus on 2018 – 2021).
The first supposition was that America would steadily be isolated – both politically and economically – as a collection of competitive or adversarial nations worked to supplant the US Dollar as the global kingpin of foreign exchange and trade AND sought to unseat America’s increasing power in the absence of a single ‘equal’ competitor.
That sounded a bit more outlandish, back in 2010.
The second was that Europe and the Euro would struggle through much of that period ultimately leading to a dire perception of Europe’s future. That would then – as described back in 2013 – 2015 – lead to a revised European Union, developing in 2018 – 2021 and likely reaching fruition in 2021 (at the same time War Cycles would peak in America and around the globe… is there a connection?)…
The 11 & 22-Year Cycles Join In
More than anything, the events of 2017 – 2019 have revealed and/or created a dangerous, smoldering tinderbox of global tensions and anxieties – awaiting a decisive dousing of geopolitical gasoline and a well-timed spark. For over a decade, the focus for the next serious global conflict has been on 2021 – the next phase of the 80-Year Cycle of War.
As was the case during the last two phases (and most of the preceding phases, dating back over 500 years), the decade leading into that cycle has seen intensifying conflicts on a recurring basis. The 1850’s (Bloody Kansas, etc.) led to 1861 – when America entered a full-blown Civil War.
The 1930’s (Germany, Italy, Europe, etc.) led to 1941 – when American entered a full-blown World War (II). The 2010’s have seen many parallels to those past periods (1850’s & 1930’s) that could see further escalation in the coming year(s).
It is worth noting that the heightened potential for a global, military flare-up is perfectly timed with when the Sun is expected to enter its own period of intensifying flare-ups. Evidence is mounting that Solar Cycle 25 has begun (see inset). In many historical cases, the first 2 – 3 years see a dramatic surge in the annual number of solar storms.
And, in many cases, the repeated bombardment of Earth – with intensifying CMEs and magnetic particles – has coincided with increasing human aggression. The 80-Year Cycle appears to have impacted this as well. 1858/1859 ushered in an explosive period and the most dramatic solar storm of modern history – the ’Carrington Event’ of 1859.
1938/1939 ushered in another explosive solar period with several global-impacting storms lasting into 1943 (a worldwide radio blackout also occurred in 1947).
Will 2019 usher in another multi-year period of explosive solar activity? Stay tuned…
Bonds & Notes have initially fulfilled analysis for a multi-month bottom in Nov. ’19. Bonds & Notes bottomed on Nov. 6 – 8 and fulfilled a ~13-month/56 – 60 week high (July ’16) – high (Sept. ’17) – low (Oct. ’18) – low (Nov. ‘19) Cycle Progression. The early-Nov. low also perpetuated a 17 – 18 week high (Jly. 2 – 6, ‘18) – low (Nov. 5 – 9, ‘18) – low (Mar. 4 – 8, ‘19) – low (Jly. 8 – 12, ‘19) – low (Nov 4 – 18, ’19) Cycle Progression.
Reinforcing weekly and monthly cycles, Bonds & Notes completed what is most likely an ‘a-b-c’ correction from the late-Aug. ’19 peaks – first declining into mid-Sept. (‘a’), then rebounding into early-Oct. (‘b’) and then selling off into early-Nov. (‘c’)… with both declines being of almost exactly equal magnitude (‘c’ = ‘a’)… a textbook correction.
Corroborating a ~360-degree cycle, Bonds & Notes topped during the final week of August – just as they did in 2018 – and bottomed during the first week of November, also paralleling last year (in 2018, the early-Nov. low was a double-bottom, retesting the lows of early-Oct.), setting the stage for a strong rally in Dec.
This also has the chance to fulfill ongoing analysis for a multi-month low in late-2019/early-2020 followed by the next important cycle high in mid-2020 – ideally in mid-July 2020.
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. They are validating the likelihood for a multi-month low in Nov 2019, followed by a final, wave 5 of V advance into a multi-year peak (July ’20??). Longer-term cycles portend a ‘Global-Shaping Event’ (watch China) and Stock Market Panic in early-2020 (see March 2019 INSIIDE Track for details)… likely spurring a final drop in interest rates.
2020/2021 represent final, culminating years of 40-Year & 80-Year Cycles – 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 even Interest Rates!
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.