Interest Rates: Stock Panic Spurring Bond Rally; July ’20 = Bond Cycle Peak
“Outlook 2020/2021 – The More Things Change…
02-27-20 – Late-2019 ushered in what was/is expected to be a geopolitically volatile period in the Middle East and across the globe. Part of the analysis involved in that conclusion included the recurring 40-Year Cycle and the connection to 1979 – 1981 and events in Iran. That assessment was powerfully validated by January events between the US and Iran.
It was also expected to usher in an unstable period – lasting at least 6 – 12 months and potentially for many years – in stock markets, currency markets (particularly in respect to gold), geophysical activity, natural events and in disease/plague cycles. The focus on 2019 for a new disease pandemic has been described since 2006 – 2010 and 2012 – 2014…
Gold & the Fiat Facade
There are two primary ways to value the Dollar. The more authentic way is to value it against hard currency – most notably gold.
The second way is to value it against a basket of competing currencies. Since they are all fiat (debt-based, paper) currency, that method hearkens to the somewhat disturbing analogy of ‘the healthiest horse in the glue factory’.
On a fiat-relative basis, the US Dollar has been in recovery mode since its major low in early-2008 and its secondary low in 2Q 2011.
When valued against gold, a different reality emerges. The US Dollar has been in a steady decline since 3Q 1999… that’s more than 20 years.
In the following pages, some of the prevailing gold analysis is revisited to place current action into proper perspective AND to reiterate what is still expected for 2020/2021.
Disease Cycles
The late-2019 introduction to what is now known as Covid-19 (coronavirus) was a precise fulfillment of cycles that have been discussed the past two decades – focusing on 2019 as the most synergistic time for another flu or flu-related disease outbreak.
This discussion began in 2006 and focused on 2009 as the prime time for a flu outbreak (and 2010 for Disease Cycles to spike) – perpetuating a decennial (10-year) cycle that had been in effect since 1889 – 1890 when a killer flu (Asiatic/Russian Flu) migrated from China to the US.
It also dated back to 1830/1831 when a major influenza outbreak hit (you guessed it) China and ushered in a 7 – 8 year period in which 3 major, global pandemics emerged (this was all detailed in INSIIDE Track repeatedly over the past 15 years). As detailed in 2006, that 10-year cycle also included the Spanish Flu (late-1910’s/1920), Asian Flu (late-1950’s) & Hong Kong Flu (late-1960’s).
That cycle often overlapped the Sunspot Cycle – timing the approximate 11-year period from the start of one outbreak to the culmination of the next. It timed major flu outbreaks and pandemics during the final years of one decade (’8’ and ’9’ years) and opening year of the following one (’0’ year). In many cases, these types of events occur at the nadir of solar activity, similar to the current time frame.
What happened in 2009? Right on schedule, Swine Flu arrived and plagued the globe in 2009 – 2010 – the latest phase of that Decennial (10-Year) Cycle.
That was the second H1N1 influenza pandemic, with the first being the Spanish Flu of 1918 – 1920. Both projected future focus (highlighted throughout the past decade) to 2019 – 2020 as the most likely time for another similar outbreak/pandemic.
In 2014 (Nov. ‘14 INSIIDE Track), the following was stated (after reprinting the 2006 analysis copied in the accompanying table)…
10-29-14 – “These two excerpts are reprinted to lay the foundation for a future discussion and to respond to a flurry of inquiries regarding the current Ebola outbreak. The sunspot/disease link discussed in the 1/30/06 excerpt was precisely & profoundly fulfilled with the ’Swine Flu’ outbreak of 2009 (3 years later, but right when projected) – now believed to have claimed about 300,000 lives.
And that projects focus to 2018/2019 – the next phase of Influenza’s unique decennial pattern (a ~10-Year Cycle) and the time when the next Solar Cycle (25) should be turning back up.
130, 110, 100, 60, 50, 40, 20 & 10 years from all of these Flu outbreaks is 2017–2019, with 2018/2019 possessing the greatest synergy. But, that is just one particular ’disease’.“ – End Nov. ’14 INSIIDE Track excerpt
There is another important correlation that was discussed in 2006 – 2010. It is the recurring coincidence of war and pestilence (a term that frequently appears in the Bible and refers to disease). The two often go hand in hand. So, is it any surprise that War Cycles recur in 2021?
…early-2010 analysis reiterated the uncanny correlation between upturns in the ~11-Year Sunspot Cycle and outbreaks of disease, natural and geophysical upheaval, war, and economic struggles. (It could also be the low points in solar activity – that naturally precede an upturn – that are to blame. We are just completing one.) Soon after (2010/2011), the Arab Spring broke out across the Middle East and N. Africa.
Corresponding 2009/2010 analysis had already honed the outlook for a future Disease Cycle outbreak to 2019/2020 – based on the next phase of the Decennial Flu Cycle from the then-current Swine Flu outbreak (2009 – 2010) and its H1N1 predecessor – the Spanish Flu pandemic of 1918 – 1920.
Those cycles were projecting a new flu surge for 10 years later – in 2019/2020. Late-2019 – 2021 would also arrive after a complete 17-Year Cycle from the SARS outbreak of Nov. 2002 – 2004. (The 17-Year Cycle of Disease was also discussed at that time.)
Stocks precisely fulfilled the latest phases of 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.
In the case of the Transports, that was the continuation of a multi-month downturn following the Jan. ‘20 peak of the 8-Month & 16-Month Cycles. That was also linked to the 6 – 8 week down cycle that would follow the Jan. 17 – 24 weekly cycle peak.
The uncanny nature of the 2-Year and 40-Year Cycles has been discussed repeatedly over the past two years and was the focus of multiple updates throughout the month of Feb. They began with a discussion on Feb. 5 of why the late-Jan. sell-off provided a textbook 4-Shadow Signal – exceeding the magnitude of the previous correction.
As described in the 2/05/20 Weekly Re-Lay Alert, that 4-Shadow Signal projected a subsequent 2 – 3 week rally (the exact same thing the 2-Year Cycle was forecasting) into mid-Feb. with some indexes expected to set new highs, some to set equal highs (double tops) and some to set lower highs. That was expected to trigger a sharp drop into late-Feb. – potentially validating analysis for multiple 10 – 20% drops in 2018 – 2022.
At the same time, it was becoming clear the S+P 500 & Nasdaq 100 were being artificially supported by a handful of stocks (FAANGs) – just as they were in Sept. 2018. That was projected, in mid-Feb., to usher in a bearish period in the second half of Feb…
And that was when the 2-Year & 40-Year Cycles powerfully corroborated that outlook – with the 40-Year Cycle arguing for a peak around Feb. 12/13, 2020 – just as on Feb. 12/13, 1980, before the DJIA plunged ~20% in less than two months. The DJIA peaked on Feb. 12, 2020!
Multiple other factors also argued for a peak on Feb. 13 – 17, 2020… Along with the 8-Month & 16-Month Cycles (that projected multi-month peaks in many stocks & indexes for late-Jan. 2020), the 4-Shadow Signal and these multi-year cycles detailed why a larger-magnitude decline was imminent and was expected to take hold in the second half of Feb. ’20. In most cases, a 4-Shadow signal will trigger a break below the preceding low (late-Jan./early-Feb. low) and then target the intermediate low that preceded that (June/Aug. ‘19 lows.)
As described in those Weekly Re-Lay excerpts, the overall action of the S+P 500 and Nasdaq 100 in Feb. ’20 was looking remarkably similar to late-Sept. ‘18 – when the FAANG stocks were the main driver of recent rallies and the few remaining stocks that were supporting the index averages.
Mid-Feb. action validated that comparison and ushered in a sell-off that should be similar to Oct. ’18…
Bonds & Notes are reinforcing a likely 6 – 8 month uptrend from cycle lows in Nov. ‘19 into cycle highs in mid-2020. The wave structure reinforced that potential. Bonds & Notes completed an ‘a-b-c’ correction from the late-Aug. ’19 peaks – with both declines being of almost exactly equal magnitude (‘c’ = ‘a’)… a textbook correction.
That was expected to usher in a wave ‘5’ advance which is still expected to peak in mid-2020 – ideally in mid-July 2020 – the fulfillment of a textbook, 4-year low-low-low-low-high-high-(high) Cycle Progression that last timed peaks in mid-2012 and mid-2016 and next peaks in mid-’20.
With the latest scare (coronavirus) threatening to further slow the global economy, Bonds & Notes could be providing important timing clues as to when to expect the culmination of this shift.”
Bonds & Notes remain focused on July ’20 for a major, multi-year peak (and corresponding bottom in interest rates). They fulfilled analysis for a multi-month low in Nov 2019, and have entered what is perceived to be a final, wave 5 of V advance into a multi-year peak in July ’20.
Longer-term cycles had been projecting a ‘Global-Shaping Event’ (with focus on China) 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, this sharp stock sell-off should be complete before the end of 1Q ’20… how long before that has an impact on interest rates?
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!
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.