TIME is more than just money; it’s absolutely everything and then some! Personal opinion just utterly fails because we are all human. Markets routinely do what the majority never expects. That is their function. They mutate like a virus always changing its genetic code to defeat medicine, or in this case, traders. This why most analysts have been wrong. They keep using 1929 as the ideal model and predicting the mother of all crashes to come. They have4 been calling for such a crash since the low of 2009. Every new high was going to be it.
Back on November 30th, 2017, I explained on the private blog: “We must respect that exceeding the November high now in December on a sustained basis, points to a January high. If we pull back, then January will be a low and then watch out for a sharp rally into March.”
TIME is the very fabric of the universe and probably the most misunderstood element of all. In physics, the relativity of simultaneity is the concept that baffles many. The question becomes, do two distant events actually take place simultaneously? Therefore, the question whether two spatially separated events occur at the same TIME is recognized to be far from absolute. It is “relative” depending on the observer’s reference frame. This becomes incredibly important in terms of forecasting the world markets. They tout the mother of all crashes is upon us based upon the events of 1929, 1974, 1987, 2000, and 2007. Yet are these spatially separated events in TIME relevant to the present?
To grasp what our model is really doing one must look at TIME and EVENTS more in the perspective of turning points correlated against everything else on the grid of TIME and PRICE – not specific events standing alone and viewed as singletons. Once you understand we are forecasting turning points on the TIME horizon, not specific events, you will begin to make a leap forward into a new world of understanding TIME and PRICE.
Specific events on the TIME horizon become easy for forecast based upon the trend in motion relative to TIME and PRICE. When trends reach that TIME horizon event, then a specific high or low is easily ascertained. Right now, we are in the throes of a major breakout that is an inherent characteristic of Vertical Markets. The nature of such events that confound many are what we call the Cycle Inversion process. Normally, turning points unfold in opposite pairs. So a November high would traditionally be followed by a January low. Merely exceeding the November high on a closing basis during December identified the Cycle Inversion process and thus a continued rally into the next target in TIME being January 2018. Exceeding the November high warned we were (1) dealing with a Cycle Inversion, and (2) a Vertical Market that is going to be very difficult to trade for most people.
It is paramount that we understand how Vertical Markets function. This is why we have developed (1) TIMING Models, (2) Reversal System, and (3) our Energy Models. Only by bringing together all three models can we judge the future of any market without human bias. Then it must be correlated both in TIME and PRICE with everything else around it in the world forum to be able to ascertain the waves of CONTAGION that wipe out people emanating from external sources.
QUESTION: It is crazy hot here in Sydney the exact opposite of the extreme cold in the north. Is there an explanation at all for this?
ANSWER: Most people do not realize that the climate is actually “polar opposites” so historically when the North is dry, the South is wet or when the North is very cold the South will get very hot. Both the Arctic (North Pole) and the Antarctic (South Pole) are cold because they don’t get any direct sunlight. However, though the North Pole and the South Pole are “polar opposites,” they both get the same amount of sunlight but there is a major difference. The South Pole is a much colder than the North Pole and this also contributes to the difference in climate experience around the globe.
The Arctic is ocean surrounded by land whereas the Antarctic in the South is in fact land surrounded by ocean. Consequently, the ocean under the Arctic ice is cold, yet the water is still warmer than the ice! So the ocean warms the air which it cannot do in the South.
Antarctica is dry despite the ice. Under the ice and snow, you find land with mountain ranges, not ocean. As with any mountain range, the higher you go, the colder it gets. The actual average elevation of Antarctica is about 7,500 feet (2.3 km).
The extreme heat in Australian, reached 47c (116f), is more akin to the Middle East in summer. I went trekking through the valley of the Kings in Egypt when it was 50c (122f) and I was the only one out and about while everyone stayed in the hotel. As the energy output of the sun collapses, we will witness growing extremes in different regions. The last time it was this hot in Sydney goes back to the 1930s during the Dust Bowl period in the USA, which hit in three waves – 1934, 1936, and 1939–1940. In truth, the sun cycle began to turn and in 1938 it reached the extremes.
The cycle of extremes in weather appears to be 86 years so this is on target. Australia is dry and ripe for wildfires the same as we see in California. This will contribute to the decline in food supply globally as well. We will see extreme opposites in weather between regions and particularly between North and South.
In your recent blog posts, you talk about the possible timing of the break up of Britain but you talk about that in terms of the regionalisation or break up of England only. Have you not said before that Scotland is likely to become independent sometime in the next few years? Perhaps you could explain how that possibility fits in this process?
ANSWER: There are two expansions on the island of Britain. The more commonly know is the formation of the United Kington which too place in 1707 under Queen Ann. That saw Scotland under English Rule3. However, before the reign of Eadgar (959-975 AD), England was divided into Anglo-Saxon kingdoms. It was Eadgar who instituted a uniform coinage throughout the land. While Eadgar set the pattern for the ‘reformed’ coinage of the later Anglo-Saxon and Norman period and standardized the use of the king’s portrait as in old Roman tradition.
If we look back in time, we see that the first Anglo-Saxon kingdom to really become powerful was Mercia. It was the King of Mercia who was the one who actually resurrected the old Roman Empire monetary system for all of Europe. We see that Offa was the first king to put the portrait of his wife on the coinage as was the tradition in the Roman Empire.
Additionally, it was Offa who actually issued the first gold coin after the fall of Rome. He was copying the Islamic gold coin for trade. He inscribed his name on the coinage, which is extremely rare.
Therefore, there are two break-ups that Britain face. Eventually, the United Kingdom will break apart formally, but with the collapse of Brussels and the EU Project, we are also likely to then see AFTER 2032, the general trend toward decentralization of governments as a whole. Hence, we will see England break apart into the old Anglo-Saxon regions as we will see the United States break apart. This is the cycle of dissolution politically and then you begin again and reform nation-states in the next major cycle wave.
Is BREXIT in Trouble? Can Britain Survive Past 2042-2044?
Posted Jan 5, 2018 by Martin Armstrong
The REMAIN crowd is doing everything possible to surrender the sovereignty, dignity, and future of Britain. The left is taking hold in Britain calling anyone who wants to leave the EU is now openly called a “racist” and they are bashing anyone who even appears to be nationalist.
While the British pound closed 2017 at 13501, it finished the year in a long-term bearish position. We now have politicians rebellion and saying that the question was too complicated for the average person to understand and so the referendum should be put aside. This is keeping in line with the anti-Democratic policy adopted in the EU to deny the people the right to vote on the European Project – the surrender of all sovereignty to Brussels.
Unfortunately, our model has not indicated any change in the long-term trend. The Euro still closed in a bullish position relative to the cross with the pound sterling. Support lies at 88120 for 2018 on Euro/Sterling. We elected a Yearly Bullish Reversal back for the close of 2016 and that has dominated the trend as 2017 closed high with an inside trading year.
The posture, overall, shows that this remains in a questionable position. The early election called by PM May was a disaster and has opened the door for the REMAIN crowd to overthrow the vote by painting anyone for BREXIT as a racist and we now hear the politicians saying that Parliament should decide and not the people. If they succeed in this movement, we seem to be on schedule for the complete collapse of Britain come 2044 where it too will split up into regions as it had begun.
During the reign of Eadgar (959-975 AD), England was united under one ruler. It was Eadgar who instituted a uniform coinage throughout the land. Eadgar set the pattern for the ‘reformed’ coinage of the later Anglo-Saxon and Norman period and standardized the use of the king’s portrait as in old Roman tradition.
Here too, we are reaching 21 cycles of the ECM 51.6-years from the reign of Eadgar, which also confirms independently 2042-2044 the likelihood of England breaking apart back toward the regions that were united by Eadgar will be the fate of Britain.
At What Point do we reach Euphoria in the Equity Markets?
Posted Jan 5, 2018 by Martin Armstrong
John Templeton has said “Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” “If you want to have a better performance than the crowd, you must do things differently from the crowd.”
My question is…….. at what point do we reach euphoria in the equity markets?
ANSWER:Our Energy Models are designed to ascertain that dimension of a market. Naturally, everyone responds to whatever the last event is in recent memory. Therefore, the 2007-2009 Crash lives on in their experience so that means they will be skeptical of new highs. We have witnessed that with analysts constantly calling for every new high would be the last. They keep trying to forecast the last event because they missed that one as well.
The only way to approach this is from a quantitative viewpoint. Human opinion will inevitably be wrong no matter who it is. How the market responds to our Energy Models is critical for long-term forecasting. Look at the chart for 1929. Here you see that there is a huge spike in energy which peaked in February 1929. The market rallied to new highs but note that the Energy Models we not making new highs. This peak BEFORE the major high confirmed a very serious undermining of the market structure warning that this type of high was a Bubble and therefore would not be exceeded for decades.
Now compare this to the Energy Models for the 2007 high. We do not have a BUBBLE formation at all and the high came on the reaction high following the major high for the move. This confirmed this was by no means a BUBBLE and in fact new record highs would be make once again.
Let’s turn to the DOT.COM BUBBLE. The first thing you will notice is that the Energy was clearly in a BUBBLE formation. The slight difference here is that the Energy Model peaked the week after the high rather than before. This confirmed that it was not going to be a 1929 type event and the new record highs would be made which indeed unfolded in April 2015 which was 61 quarters intraday and 66 quarters to close above the 2000 high on a quarterly basis.
Here is gold for the 1980 BUBBLE. Once again you see the extreme BUBBLE formation and here the peak took place with the peak in gold. So while we are not looking at the same type of formation with the peak unfolding in advance of the high as in 1929, this reflected that gold would eventually make new record highs within a mid-term perspective. Unquestionable, it took 19 years for gold to decline before the major low was established. Gold finally exceeded the 1980 high during the crisis of 2008.
Now, let us look at the current situation. Again we do not have a major BUBBLEformation. What we do have is a market that is still expanding and in fact, the high on our Energy Models on the weekly level took place last week. This implies we would still press higher into January and that has been out target once you exceeded the November high.
We are by no means in a 1929 BUBBLE type of formation. Here is the view of the 1987 Crash. Like Gold, the peak came 1 week following the high. Yet we see escalating advances in Energy leading into the 1987 high. So far, we lack that type of pattern warning that the real advance in our Energy Models is yet to come.
Therefore, the answer to your question is rather simple. It is always a matter of TIME rather than price. As markets rally, human interpretation of price will always be wrong.NOBODY is going to call this final high from a human perspective and anyone who claims that will be a fraud. It is not a matter of opinion for we can personally only forecast what we think is possible, to begin with.
QUESTION: Is it in your view a minor cold blip or “OMG we’re all going to freeze to death and run out of food ?”
ANSWER: We are looking at an unbelievable decline in the energy output of the sun which appears to be the most rapid decline in nearly 10,000 years. The Global Warming crowd may be setting society up for mass famine and death because they are deliberately point everyone in the opposite direction to get their portion of the $1 billion grants. Natural disasters are the most disastrous when the energy output of the sun declines. There has been a fatal interaction of ecological, agricultural, economic, and political factors that seem to be setting the stage for at least a repeat of what is known as the Great Famine of 1315-1317. The Great Famine started with bad weather in spring 1315. Crop failures lasted through 1316 until the summer harvest in 1317, and Europe did not fully recover until 1322. The period was marked by extreme levels of crime, disease, mass death and even cannibalism and infanticide. The crisis set in motion the great economic collapse that began during the fourteenth century. In our arrogance, we seem to believe we have conquered every aspect of the planet and many argue we can even alter the climate of the planet.
The collapse from the Medieval Warm period was rapid, but also deadly. When the climate turned down, what followed was suddenly bitter cold winters and drenching rains which then froze. Europe had expanded as society always does in warm periods. Study have shown that desert rodent populations of many species tend to “fluctuate synchronously owing to pulses of primary production and seed availability during rainy years, and reduced seed production during droughts” (PLOS 2013).
I have reported that plagues correlate to the decline in temperature. During the 14th century, there were warnings in the form of rumors that told of a great plague in China and India that killed most of the populations there. The plague made its way to Europe when the Kipchak forces were besieging the Genoese trading post in the Crimea (Ukraine). The Kipchaks began to catapult plague-infested corpses over the walls and into the trading post. The disease spread quickly and the Genoese abandoned the outpost. They sailed back to Europe stopping in Sicily in 1347 taking the Black Death with them.
Four centuries of global warming left Europe with mild temperatures, which were the highest in 8,000 years. This led to the great economic expansion and the rebirth of trade and the economy. In fact, gold began to reappear in the coinage after about 600 years. This was the Great Medieval Warming period that marked the rebirth of civilization following the fall of the Roman Empire. The European continent’s farmers expanded agriculture and planted crops on vast quantities of land previously unsuitable for agriculture. This led to the increased food supply which, like desert rodents, fueled a population explosion that tripled the number of people in medieval Europe.
First we have the sharp decline in weather. This resulted in those marginal lands that had been cultivated ceasing to produce crops as frosts and floods dominated the climate. Millions of extra mouths had to be fed and many died from the famine. Rebellions and civil wars emerged and this in turn exacerbated the crisis. Then the terrible weather turned deadly and the first disease began to appear int the livestock. Two consecutive harvest failures in 1314 and 1315 launched seven years of famine, resulting in the deaths of between 5% and 12% of the population of northern Europe.
Yes, there have been famines caused by mankind. The worst in history remains that which occurred during the 20th century. This was the Russian famine created by Communism. Stalin’s forced collectivization program starved to death some 5 million Russians. Stalin took the food from Ukraine for Russia resulting in another 8 million Ukrainian deaths. Some 25 million Chinese died of hunger as a consequence of Mao’s Great Leap Forward, which also completely failed when bureaucrats try to run things from a central government perspective. Both of these modern famines were the result of Socialism/Communism taking the control away from the individual and handing it to bureaucrats in the central office.
My concern here is the correlations of pandemics to the decline in the energy output of the sun. That decline from the Medieval Warming Period set in motion what many call the Little Ice Age. Even after the extreme low, Europe is rapidly turning colder much faster than expected in what we would call technically a retest of the lows. That sharp decline was a real global cooling period for Europe known as the Deep Freeze of 1709. In the first few months of 1709 remained in a deep freeze that again wiped out food supplies. People were ice-skating on the canals of Venice, which against was highly unusual to see such cold that far south on the water. People could cross the Baltic Sea on horseback because it was completely frozen! You could not ring a church bell because it would shatter it was that cold.
Therefore, to answer the question do we face an OMG event with famine? The answer is yes! The worst of this may come during the 2020-2024 period. I have reported that it appears the next 8.6-year wave on the ECM appears to be setting up for a rally in commodities. That will include food.