Wednesday, August 24, 2016
A bullish phase of this cycle started about two decades ago in 1998, and ended in 2011. A bear market, lasting about 21-years, has been underway since then. Sorry gold bugs! During the bull market phase some commodities rise in five waves. During the bear market phase all commodities decline in three larger waves. Naturally, just like there are corrections in bull markets, there are rallies in bear markets. Commodities, in general, are currently in one of those bear market rallies.
When one looks at a Crude chart covering nearly 50-years, one can clearly see two periods of rising prices and two periods of declining to sideways prices. While these rising and declining periods may look sporadic, they are actually quite regular when one knows what to look for. As we will explain in the following chart.
|Tony Caldaro: "Expect a price range between $25 and $85 over the next decade."|
The two rising periods were actually five wave 10-year bull markets, i.e. 1970-1980 and 1998-2008. These two bull markets were separated by an 18-year bear market, i.e. 1980-1998. The rise during the bull markets were quite spectacular. Well over 1000% in such a short period of time. Price rises like these always lead to excess-capacity events. And these events are normally followed by nearly as spectacular declines. Which eventually cuts capacity until supply/demand reaches an equilibrium. We are in one of those equilibrium periods now.
With Crude 8-years into its bear market, and at least a decade away from starting a new bull market, we can already see a pattern unfolding which is relative to its previous bear market. To see this pattern one needs to review the larger waves first. During the last bear market Crude declined from 1980-1986, rallied to 1990, then declined from 1990-1998. A 6-year decline, then a 4-year rally, followed by an 8-year decline.
Since the current bear market just had an 8-year decline, 2008-2016, we should look into the last 8-year decline. Then the 8-year decline unfolded in three waves : 1994-1997-1998. Now the 8-year decline has also unfolded in three waves : 2009-2011-2016. Notice 1990: 4dn-3up-1dn, and 2008: 1dn-2up-5dn, nearly the exact reverse or mirror image. If we consider this a completed pattern, and we do, the next thing that should occur is a choppy 4-year bear market rally, i.e. 1986-1990 or 2016-2020. Therefore the $26 low should be the low for at least the next four years.
How far could Crude advance? During the last bear market all rallies, excluding the aberration from the Kuwait invasion, retraced 38.2%, 50.0%, or more of the previous larger decline. This suggests an upside target between $70 and $85 by the year 2020. Then, after that, a six-year decline into the final bear market low, which should be around the $26 area. In summary one should expect a price range between $25 and $85 over the next decade. Unless there is a supply-event, which could push the upper range higher.
|See also Paweł Wiśniewski on Long-Term Commodity Cycles HERE|
Tuesday, August 23, 2016
|In the late afternoon (EDT) of Aug 22 (Mon) the Sun had moved 150 solar degrees (= geocentric longitude = 155 CD) from the Spring Equinox. |
More details on W.D. Gann's concepts of Natural Trading Days and Timing with Solar Degrees HERE + HERE.
Charted and calculated with Timing Solution.
Saturday, August 20, 2016
Maurice Cotterell (2001) - There appears to be a correlation between the rise and fall of civilizations with the rise and fall of radiation from the sun. The graph shows a long-term envelope of sunspot activity derived from the center graph of Carbon 14. More carbon 14 is absorbed in the growth rings of tress during the sunspot minima. Sunspot minima also correlates with mini-ice ages and a winter severity index based on a mean for Paris and London - for the period shown. The Maya disappeared during a sunspot minimum (see also HERE + HERE + HERE)
Friday, August 19, 2016
I believe that we are terminating an impulsive advance from an Elliott wave perspective, this impulsive advance is the fifth wave of grandsupercycle degree [...] Another scary aspect of the chart above is the extended fifth wave that occurred from the lows in 1974 to where we stand today. R.N. Elliott warned about what usually occurs after a fifth wave extension since it is usually followed by a crash. Once we look at the projection lines we will notice such an outcome is highly likely based on our volatility forecast. The target for the correction after a fifth wave extension is the range of the second wave which brings us to the 1000-770 price range. Such a forecast for the Dow is certainly scary and I am not brave enough to make such a cataclysmic call which is why I will wait for the patterns to unfold to obtain more accurate price targets. It is important to know that the US stock market is likely to be the out-performer as indicated in one of my previous posts (The American S&P and German Dax ratio) in which I analyzed a ratio of the DJIA with the German DAX. If such a target is expected in terms of the DJIA one can only imagine what will occur to the European indices. I still prefer a German DAX short once the peak is in since one will make money from a higher EURO and a larger percentage drop. Let us now take a look at the shorter term wave count.
The shorter term wave count suggests that the DJIA is in its fifth wave of intermediate degree to terminate the primary degree rally from 2009 which will in itself terminate a cycle degree advance that started in 1974 which will itself terminate a supercycle degree advance that started in 1932 which will itself terminate a grand supercycle degree move that started in 1784. The cycles mentioned on many previous posts on this blog support that fact. I believe that such a large and historic top will end in weakness rather than strength. This is why I am preferring an ending diagonal scenario for the fifth wave of intermediate degree. I am certain that the correction that is about to unfold will be the largest correction in US history. This is a time to be cautious from equities and to try our best to avoid the calamity.
The first chart below presents an overlay of the 1920s bull market with the one seen since late 2011. Both bull markets occurred under a similar cyclical circumstance hence their high correlation (9 year cycle). The correlation is almost 80%! This projection line suggests that a peak is likely in the first quarter of next year. This conclusion is supported by a projection line of the 18 month cycle that started in 1971 which is presented below.
The third chart above shows my volatility projection as well as the projection line of the late 20's. The volatility indicator was obtained from two 9 year cycles of a similar cyclical circumstance to where we stand today. The volatility projection suggests that the crash is likely to be drastic going into the low that is expected in 2020 which is when peak volatility is expected.
Thursday, August 18, 2016
Wednesday, August 17, 2016
|Upcoming turn-days are:|
Aug 18 (Thu), Aug 21 (Sun), Aug 25 (Thu), Aug 29 (Mon), Sep 01 (Thu).
See also HERE
|Upcoming Cosmic Cluster Days (CCDs) are:|
Aug 17 (Wed), Aug 23 (Tue), Aug 29 (Mon), Sep 01 (Thu).
See also HERE
|Trust vs GDP per Capita - Enlarge|
Who agrees with the statement "most people can be trusted"? It turns out the answer to this question varies hugely from country to country. In one extreme, in countries such as Norway, the Netherlands, China and Sweden, more than 60% of respondents think that people can be trusted. And in the other extreme, in countries such as Colombia, Brazil, Ecuador and Peru, less than 10% think that this is the case.
[...] The Pew Research Center recently constructed a series of long-run estimates of trust in the government for the US, staring 1958. The following visualization uses their data, to plot the share of people who say they can trust the government in Washington always or most of the time. As it can be seen there are some clear patterns associated with political cycles, but in the long-run there is a negative trend. Today, trust in the government in the US is at historically low levels. The Pew Research Center has a dedicated website, with many interesting visualizations – including disaggregated trends by ethnicity and political affiliation. Further details and analysis available in the report Beyond Distrust: How Americans View their Government
In the US, the General Social Survey (GSS) has been gathering information about trust attitudes since 1972. To our knowledge, this is the longest available time-series on interpersonal trust estimates in the world. The following visualization uses this source to show the evolution of trust in the US. Specifically, this plot shows the share of respondents agreeing with the statement “most people can be trusted” in the surveys 1972-2014. As we can see, there are short-term fluctuations, but people in the US seem to trust each other less today than 40 years ago.
|Weapon of Mass Migration and Jihad - Muslim Invasion of Europe (HERE + HERE)|
|Inigo Owen Jones | See also HERE & HERE|
|Australian Rainfall Cycles|
|Inigo Owen Jones (1938): Why I build the Crohamhurst Observatory (HERE)|
|Hit Syria – Target Russia – Contain China|
Tuesday, August 2, 2016
|The US and Israel had orchestrated the 'Arab Spring' and the|
Ukrainian Maidan i.e. they set Europe's immediate neighborhood on
fire. In 2014 the US launched their 'Weapon of Mass Migration' against
the EU, which is now disintegrating and on the brink of civil war herself.
The failed US-coup against Erdogan attempted to spark immediate civil war
and to direct another wave of Turkish and Kurdish migrants to Europe (HERE).
What is happening to Europe? All of this was in fact quite predictable. Europe is inexorably nearing the brink of civil war. What is the essence of this war? In order to understand this, we should pay attention to the two major forces that are unleashing this war and becoming its main poles. On the one hand, there are the hordes of migrants from the Middle East and North Africa. On the other, there are European nationalists whose influence and determination is growing in strict proportion to the number of migrants. Hence the equation: the more migrants, the more nationalists, and the more that migrants resort to violence, the more hysterical and harsh the nationalists’ response will be.
|During the past two years hundreds of victims were killed by Islamist |
terror attacks in Europe (HERE).
Little by little, this is leading to a European Spring, i.e., a fully-fledged civil war. What goals do those who are stubbornly increasing the chances of terrorist danger and violence in Europe have? They can have only one: bringing Europe to an end, finally destroying it, and building the same bloody mess as in the Middle East on the European continent. Once again, we can see the favorite tool of American geopolitics which the US used to blow up the Arab world and has already destroyed several countries: Iraq, Libya, Yemen, and Syria. This tool is none other than radical Islamic fundamentalism, Salafism, and Wahhabism, whose brand logo and PR signboard is the Islamic State, Daesh, which is banned in Russia. They make up the core of all extremist acts committed by migrants, or simply attribute these to themselves, which only strengthens their image.
|With friends like these, who needs enemies?|
Let’s pay attention to the geography of recent terrorist attacks: France, Germany, Germany, France, Germany, period. Why in these countries? Because after Brexit, Europe got the chance to somewhat deviate from America’s suffocating control and, as always, the two pillars of continental Europe, real Europe, remain France and Germany, who are least of all controlled by Anglo-Saxon domination. So now they get a black spot from Washington. As John Kerry loves to put it, the “mechanism has been launched.” This time, the mechanism is civil war in Europe which, in such a situation as now, is almost inevitable. The more migrants, the more terrorist attacks. Both are only increasing [...] Can this be stopped? Maybe it’s too late. The only chance for salvation is to immediately abandon the US and NATO at breakneck speed. Are you all ready? If not, tomorrow you’ll become Libya (see also HERE).