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‘The Markets Peaked’ – This Historical Indicator Signals Potentially Huge Losses Ahead

July 11, 2018

‘The Markets Peaked’ – This Historical Indicator Signals Potentially Huge Losses Ahead

Understanding cycle theory is still one of the most important things an investor can do.

Buying at the peak is a surefire way to increase your downside risk – even if your investment is sound. And buying at the bottom gives you a thick margin of safety – downside protection.

That’s why the best investors pay so much attention to where they are in the cycle.

The value-investing contrarian who runs Oak Tree Capital – Howard Marks – has written about the importance of cycles.

In fact – in his book, The Most Important Thing Illuminated, he writes two key rules. . .

“Rule number one: most things will prove to be cyclical… Rule number two: some of the greatest opportunities for gains and loss come when other people forget rule number one…”

And I fully agree with him. . .

There’s a powerful indicator that shows global economic expansion and contraction – it’s known as the ‘Global Wave’ (GW).

And going back the last 30 years – within a year of when things peak (top), there’s either a recession or some market crisis. And when there’s a trough (bottom), it’s followed by growth and gains.

Today – the Global Wave indicator’s signaling economic growth has peaked for this cycle. And both markets and economies are going to underperform for at least the next 12 months.

To be fair – some post-market peak downturns were brief and didn’t result in huge market sell offs. But the ones that did – like the 2001 and 2009 recessions – were brutal.

That’s why we need to ask ourselves a very important question: what’s most likely to happen over the next 12 months – is the Global Wave Indicator just noise(useless) or is it a signal(useful)?

If we look at the history of the GW, it’s not hard to see that things are most likely going to go down from here. . .

…click on the above link to read the rest of the article…

My Cyclical Approach

December 15, 2015

My Cyclical Approach

Gann William Delbert

QUESTION: 

Marty,

I just watched ‘The Forecaster’ on demand, I just wanted to say it was an exceptional movie. I really enjoyed seeing your story played out, and following your journey to the discovery of pi in economic cycles.

As an avid trader myself, although not nearly as successful as you [yet, hopefully!], I’m always looking to refine my process. I can’t help but be reminded of W.D. Gann when I read your blog, or when I study the ECM. Is/Was Gann ever a major influence on you/your work? What are your thoughts on him?

My other question pertains to the secular shift from public to private confidence in the ECM. Where do commodities fit in here? Would they be considered part of the private sector? I know we are in a secular-deflationary trend, although that would seem to be nearing an end in the next couple years. Any response is greatly appreciated.

Best Regards,

GD

Video Player

ANSWER: No, I never read Gann. This is the clip that inspired me to study cycles. My history teacher showed it to me in the 9th grade – the Toast of New York. It was about the Panic of 1869 and Jim Fisk’s attempt to corner the gold market where he said gold was $162. I went to the library and looked in the NY Times. It was true. That shocked me into realizing that here was gold at $162 in 1869 yet $35 when I was in school. Obviously the world was not a straight line. There was some sort of cycle at work. That was my inspiration.
Nevertheless, anyone who wants to become a trader must learn the ways of the market. Only a fool argues the market is wrong since the market is ALWAYS right.

…click on the above link to read the rest of the article…

Governments Worldwide Will Crash the First Week of October … According to 2 Financial Forecasters

July 20, 2015

Governments Worldwide Will Crash the First Week of October … According to 2 Financial Forecasters

Update: Please see correction at the end.

Two well-known financial forecasters claim that virtually all governments worldwide will be hit with a gigantic economic crisis in the first week of October 2015.

Armstrong Painting
Martin Armstrong

 

Martin Armstrong is a controversial market analyst who correctly predicted the 1987 crash, the top of the Japanese market, and many other market events … more or less to the day.   Many market timers think that Armstrong is one of the very best.

(On the other hand, he was jailed for 11 years on allegations of contempt, fraud and an alleged Ponzi scheme. Armstrong’s supporters say the government jailed him on trumped-up charges as a way to try to pressure him into handing over his forecasting program).

Armstrong has predicted for years that governments worldwide would melt down in a crisis of insolvency and lack of trust starting this October.  Specifically, Armstrong predicts that a major cycle will turn on October 1, 2015, shifting investors’ trust from the public sector and governments to the private sector.

Unlike other bears who predict that the stock market is about to collapse, Armstrong predicts that huge sums of capital will flow from bonds and the Euro into American stocks.  So he predicts a huge bull market in U.S. stocks.

Edelson Paint Painting
 Larry Edelson

 

Edelson is another long-time student of cycle theory.  Edelson – a big fan Armstrong – has also studied decades of data from the Foundation for the Study of Cycles.

Edelson is predicting the biggest financial crisis in world history – including a collapse of government solvency – starting on October 7, 2015 – the same week as Armstrong’s prediction – when the European Union breaks up.

Edelson also thinks that huge sums of investment will flow from the Eurozone to America, driving up U.S. stocks (unlike Armstrong, Edelson thinks U.S. bonds will also benefit). He thinks that Japan will be the next domino to fall … and that Japan’s default will also drive investments into the U.S. as a safe haven.

 

…click on the above link to read the rest of the article…

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