Oil Markets on Track for Rally into Mid-May; Ultimate Peak Expected in 3Q 2018.
Oil Markets on Track for Rally into Mid-May; Ultimate Peak Expected in 3Q 2018.
04/30/18 INSIIDE Track: “Crude Oil – Multi-year trend slowly turning up after fulfilling cycle low in early-2016 – the convergence of monthly & yearly cycles. Cycles turned bullish in 3Q ‘17 and could spur additional upside into 3Q 2018…
Outlook 2018 – 2019
40-Year Cycle Firmly Intact
04-30-18 – As more time elapses, and more separation from the 2016 Election is gained, it becomes clearer and clearer that a seismic shift really did take hold at that time.
For the past decade, I have described the impact of the 40-Year Cycle and why it was auguring serious challenges for the late-2010’s.
Much of that discussion had to do with the 40-Year Cycle’s impact on America and why 2016 should time a new ‘revolution’ in American politics.
It had timed the onset of the inaugural Revolution in 1776.
Following that, related revolutions (often revolving around banking & currency control – including the role of precious metals) were triggered surrounding 1816 (2nd Bank of U.S), 1856 (suspension of gold & silver payment), 1896 (election focused on re-establishing the Gold Standard), 1936 (affirmation of paper/fiat Dollar supremacy) & 1976 (global divorce from gold via Jamaica Accord).
Those six ‘shifts’ coincided with and/or triggered market panics & crashes, inflationary or deflationary spirals, war, food crises and geopolitical upheaval.
In each case, the preceding years set the stage (e.g. 1773 – 1775 set stage for 1776) and the ensuing years witnessed the more overt manifestations of those shifts (e.g. 1777 – 1781).
Throughout the past decade, 2018 – 2021 has been forecast to time a tumultuous period of conflict and unity – ushering in new global orders on multiple scales. (As noted many times before, the periods of greatest conflict are often the periods of strongest unifications – even though it usually involves two opposing unions.)…
China
Another part of that focus has been on China, a nation that is becoming a key player in currency and interest rate markets (holding a large amount of US Treasuries) and whose 40-Year Cycle focuses on 2018 – 2021, as well. 1978/1979 began a seismic shift in China’s relationship with the West – politically and economically.
Sept. 1976 saw the death of Mao Zedong and much of his Marxist/Leninist economic policies. In late-1978, Deng Xiaoping began to rule and initiated massive economic reforms that are still playing out. (His consolidation of power is often identified as Dec. 1978.) With careful political maneuvering, he forced the ouster of key leaders in 1980 & 1981, removing critical impediments to his plans.
Jan. 1, 1979 timed America’s recognition of China (People’s Republic of China; in lieu of Taiwan – the Republic of China) and was followed by Xiaoping’s late-Jan./early-Feb. 1979 visit to the U.S.
For all intents and purposes, 1979 ushered in China’s economic rise to power. As that rise took hold, China ultimately experienced ~three decades of 9+% average growth (GDP). 1979 is also when full US/China relations were established.
A complete 40-Year Cycle from those events reaches fruition in late-2018 (stretching into 2021). Similar to 1978, when Xiaoping began to consolidate power, 2018 is when Xi Jinping accomplished the same thing – assuring his ‘reign for life’.
2018 – 2021 could be when China overtakes the West.
As is often the case, the midpoint of that 40-Year Cycle corroborated this progression of events. 2000 is when China was granted permanent normal relations and then Most Favored Nation trade status by the U.S.. In 2001, China was granted admission into the World Trade Organization.
2019 – 2021 is another 20 years in the future.
2018 – 2021 is also the latest phase of the 40-Year Cycle that has impacted China’s conflict with key nations, including Britain, the US & Japan as well as with her own citizens (civil wars)… and dates back hundreds of years:
Late-1810’s – America joins Opium Trade in China. Key graphs of Opium imports time the transition/acceleration points to the 1650’s, 1770’s & 1810’s – all phases of this same 40-Year Cycle. The 40-Year period – encompassing the late-1810’s to the late-1850’s – timed the tipping point in this trade, yielding two major Opium Wars.
The Second Opium War lasted from 1857 – 1860 (40 years after this initial, late-1810’s phase)
Late-1850’s – The Taiping Rebellion (1850–1864) was a massive civil war, considered bloodiest civil war ever with diverse estimates of 20 – 70 million deaths. It overlapped the Second Opium War (1857 – 1860).
Late-1890’s – Boxer Rebellion (1899 – 1901; attempt to purge China of all foreigners)
Late-1930’s – 2nd Sino-Japan War (1937 – 1945).
Late-1970’s – 1978 – 1982 = major shift in China’s economic & geopolitical approach (overlapping Sino-Vietnamese War in 1979).
Late-2010’s – 2017 – 2021 = 40, 80, 120 & 160 years from Major China-involved wars… as well as 200, 240 & 360 years from underlying triggers and the original Sino-Russia conflicts starting in 1650’s.
The 40-Year Cycle is ubiquitous in China’s military & geopolitical evolution and has also had a dramatic impact on their trade policy. In each 40-Year Cycle, the years of ‘7’ – ‘0’ include some or all of the conflicts described.
2017 – 2020 is the latest phase.
Israel’s 70-Year Cycle
And then there is the Middle East. For two decades, I have discussed multi-decade, multi-century & multi-millennial Middle East cycles that collide in 2000/2001 through 2027/2028. That began with war/attack cycles converging in 2001 – a cycle that was projected (in 1999 – early-2001) to draw Israel & the US closer together and that could involve a ’surprise attack on America’s shores’.
That was followed by cycles in 2007/2008 & 2010/2011 – the latter of which was forecast to spur the overthrow of multiple Middle East leaders as a precursor to Jerusalem Cycles of occupation & liberation that were forecast for 2017/2018. The Arab Spring of 2010/2011 perfectly fulfilled those cycles & reinforced the focus on late-2017 – late-2018.
Within that latest cycle, the 70-Year anniversary of Israel’s independence (May 14, 2018 on the western calendar) was a focal point of that analysis since it represents the ‘Cycle of Kings’ and governments and even has a potential relationship to David’s discussion on life and that uncertain decade between 70 & 80 years (2018 – 2028, in Israel’s case).
Could mid-May validate this cycle?
Crude Oil, Unleaded Gas & Heating Oil remain likely to move progressively higher into 3Q 2018 – when a myriad of monthly cycles converge (see April ‘18 issue). On a near-term basis, they were projected to bottom in early-April & rally into late-April with the potential to extend that advance into mid-to-late-May, the latest phase of a ~16-week low-low-high-(high) Cycle Progression.
That is also the mid-point of the ~7-month low-low-high Cycle Progression that projected the surge from mid-2017 into late-Jan. 2018. A high around mid-May would reinforce the monthly & yearly cycles that converge in 3Q 2018 – the next phase of both monthly & weekly cycles.”
Energy markets remain on track for overall advance into mid-May as part of a year-long advance from late-Sept. ’17 into late-Sept. ’18 (coinciding with related Middle East Cycles). Energy relationship to overall equity market remains in force and is corroborating daily cycle highs & lows in stock indexes. That relationship continues to project a precarious period in 4Q 2018.
The ~16-week low-low-high-(high) Cycle Progression – that should time a mid-May high – also projects a subsequent peak in mid-to-late-Sept. 2018.
How will China’s economy – a positive factor for oil prices, its falling stock market – forecast to experience a year-long decline and plunge into late-2018, and its War Cycles impact Crude cycles that project a 6 – 12 month and possible multi-year peak in 3Q 2018?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.