Germany’s Refugee Crisis is Starting to Explode
The Arab sexual assault in Cologne, Germany, occurred on New Year’s Eve when hundreds of male refugees robbed and carried out sexual assaults against over 100 girls. This illustrates one of the huge problems with allowing such a mass migration of a starkly different culture.
But what has become the BIG NEWS, is the cover-up by the major news in Germany who did not publish the story for three days. On January 6th, Denmark began “temporary” passport checks on the German-Danish border. The attempt to cover-up the Cologne attacks with one-third being sexual, has sent a shock-wave in Europe behind the headlines. The temporary passport checks in Denmark is a clear response to Germany’s unprecedented acceptance of refugees who a portion are not quite ready for Western living. The men involved were said to beSyrian.
The German government and the press have tried to hide the issue because they are not prepared to admit this has been a huge mistake. Welcoming in huge numbers of boys from a culture which denigrates women is a clash of cultures which will not be resolved. The European Commission itself now estimates that another 3 million will enter Europe and many of them are not educated even in their own Arab language and are unemployable. This is a huge disaster that will tear Europe apart and will only get far worse. Because Merkel made Time Magazine person of the year for this very issue of allowing the Muslims to enter. This was to soften her hardline approach to the debt crisis in Greece created by the EU’s failed design of the Euro and Goldman Sach’s manipulation of their debt. There is NO POSSIBLE WAY Merkel can reverse this policy for politicians will never admit such mistakes. She has doomed Europe and nobody will stand up and tell the truth.
In many parts of the world, Western women are pictured as sex-crazed creatures. Since Arab women are supposed to be modest, seeing a Western woman dressed provocatively can be seen as an invitation based upon their culture.
In some Arab countries, Western women can be jailed for wearing a two-piece bathing suit or for simply walking down the street without an escort. In some cities in India, women staying alone in hotels are placed on a women’s floor where guards are placed at night. You cannot easily mix cultures with such diverse social views without creating new risks.
The Sling Shot Move – How Long Would it Last?
QUESTION:
Hi Martin…can you explain more what you meant but what you said below?
Does this mean a long correction that will last thru out this year or longer? or will it just be thru march ..then bottom and head back up thru 2017..? Confused here…what is the …extension mean exactly? Is that an uptrend in the market until and beyond 2017?
Does this mean a long correction that will last thru out this year or longer? or will it just be thru march ..then bottom and head back up thru 2017..? Confused here…what is the …extension mean exactly? Is that an uptrend in the market until and beyond 2017?
If it cracks…how long will it crack downwards?
Thank you
Thank you
Our Panic Cycles began to turn up this week moving into next week. If we penetrate last year’s low of 15370, then we may see a drop to retest the major support area in the 12875-13100 area. We should break the market FIRST and this appears to be setting up for the extension beyond 2017. A monthly closing below 16013 will signal that the market should crack and then we will be set up for a really wild rise.
ANSWER: No, this is a Sling Shot move more akin to 1987 if we achieve it. A crash would be rather quick in the form of a Waterfall Move. Therefore, we are unlikely to see a prolonged decline. It would tend to be short, sweet, and to the point. Everyone would tend to bailout and then that would be the fuel to send it back up for they would not believe the result. Keep in mind this is NOT YET CONFIRMED. We nee to elect a Monthly Bearish Reversal at the 16000 area to signal a move to the next zone in the 12900-13100 area on the extreme.
Live Trading Conference?
QUESTION: Marty; I attended one of your live trading conferences in the 1980s. It wasn’t cheap back then. If I remember it was $25,000 a seat. The bank paid for my seat and I still tell how we made 5 times that in a single day at a pub in the City. Will you ever do that again?
Cheers
PG
ANSWER: Well adjusted for inflation, that would be $55,748.33 a seat today. Yes I remember those sessions well. They were fun in my younger days. One of the banks even paid me to teach one of their clients and paid all expenses to fly me toGstaad.
I have requests to do this in Shanghai. It’s a lot of work. They are very expensive to even put on. They want exchange fees per person to do a live session. We only do first class sessions with good food and cocktail parties. A cocktail party runs nearly $100,000. They are like weddings.
Plus, not really sure I am up to it. That was almost 30 years ago. We are looking through some of the tapes of old conferences to see if we can put together a course. The video quality is not so great compared to today. Plus I had more hair and was thinner back then.
Using Reversals
S&P500 Futures
QUESTION: Hi ! …
In assessing a Sling Shot Move vs Phase Transition,
you mentioned that “The key will be decided by the Monthly Bearish Reversals.”
As the market is currently selling off into one of a few support zones, wouldn’t it be decided by Bullish Reversals? In other words, don’t we now want to wait and watch for a Bullish Reversal before we Buy?
Ready for your Trader Service. 
All the Best ,
AH
ANSWER: Reversals can be used in two ways. First, as shown above, you can add with each reversal until the trend changes. This illustrates JUST the Reversals and only on one time level. You can build a position using the broader ones and then exit using the Daily or Weekly.
On the other hand, you can use Reversals in the opposite manner for the initial entry. During the 1987 Crash, we fell all the way in 2 days by about 10,000 basis points filling the gap between the reversals. You can buy against that Bearish when it also matches the time. In 1998, I did the same in reverse. I sold the Japanese yen at 147 against the Yearly Bullish for it too met the time.
If we see a Sling Shot (WHICH IS STILL NOT CONFIRMED), then we buy against the Bearish if it meets the time. The same would be true in gold. This is theINITIAL entry. Thereafter, you add to the position with each reversal elected.
The Euro & 2017 – The Beginning of the End
The closing for the Euro at 10869 provided a long-term Yearly Bearish Reversal which we have been citing throughout last year: “We have Yearly Bearish Reversals are 11645 and 10365. So the 116 level will remain as reactionary resistance this year and the 10365 level is key support just below the current low of 10460.”
The 116 level remains the reactionary resistance target. If we are going to look to sell this currency, that is what we should look at for any rally. Nevertheless, we do have an initial Weekly Bullish at the 11055 area and a small gap up to the 11365-11375 area. It may be difficult to get through that level of resistance.
We can see that the oscillator has showed a recovery to some extent. We have not achieved any of the sell signals so far. We still have the Weekly Bearish at 105.20 so we have seen nothing but consolidation to date.
The fact that we did close 2015 below the 116.45 Yearly Bearish Reversal confirms the trend is down long-term. We held the major Bearish at 103.65 so that signaled here that we may not see an early conclusion to this trend either. So here too we may not see a low in the Euro (high in Dollar) before 2018 at best with the potential here as well of an extension into 2020/2021.
With the stock markets, crude, the Euro, and the Chinese economy looking into 2020 and the potential that Japan collapses into a full Pi Cycle of 31.4 years from the 1989 high which also puts this into the 2020 time slot, We must keep an eye on the War Cycle which heats up in 2017. Such periods of conflict on average last about 3 years for a single nation v nation conflict. World War I lasted 4.291 years (about half an 8.6 year cycle), and World War II when combined between Europe and Asia lasted 5.953 years. Therefore, if we were to see an international war from 2017, one would expect it to end by 2021. This War Cycle also has the domesticCivil Unrest component hitting simultaneously. This also appears to rise sharply following 2017, which is the year of major political change.
Therefore, the markets appear to be telling us there is an extension in the wind when we look at all of them across the board. Gold also avoided the key sell signal at 1044 for the closing of 2015 and bottomed on the first Benchmark. This too was like Crude – not a buy signal, just an avoidance of a near-term sell signal and hence the bounce. Nevertheless, unlike Crude which elected a Yearly Bearish at the 41 level warning no new record highs, Gold has never elected a Yearly Bearish so new highs remain on the horizon moving forward.
Everything is starting to imply that this is NOT going to END in 2017, but it is starting to appear that will be the BEGINNING of the end. So we still see that the opportunity to sell the Euro will arrive as will the time to finally buy the Dow. Neither have given us a signal just yet so it looks like we may get to sell the rally in the Euro and buy the low in the Dow.
Crude Bullish or Bearish?
We had THREE Yearly Bearish Reversals in Crude and the first was $41, the next $35 and $32 but then there was also $25. We achieved the first one, but not $35. This still warns of lower lows here in 2016, but it does not imply $12. Typically, when you are trading BELOW a Yearly Bearish like $35 and you rally to closing above it, it is NOT a buy signal since we are still electing the $41, but it is warning that a complete collapse is not likely.
This is most likely reflecting what is coming after 2017. This in part is also intermingled with the Sling Shot v the Phase Transition. The former wouldEXTEND the cycle and suggest that 2017-2020 will be the chaotic period and aPhase Transition would imply a conclusion by 2017. That is the difference. Neither one is yet confirmed as we have been stating. Therefore, it is curious that this seems to be lining up with Crude.
We have technical support during 2016 in Crude at the $30.75 level. Our model should resistance at $40 and support at $25. Therefore, it does not appear that we would see crude collapse to the $10-$15 level some have been calling for. This is most likely why crude rallied to close above the $35 number. It merely avoided a devastating sell signal where at least $25 would have been guaranteed.
Sling Shot v Phase Transition – WHEN?
QUESTION: Marty, Thank you for the WEC. The more I reflect on my notes the more I begin to understand you really opened my eyes to see the world much differently. So you said we would go down first and then flip. You also warned that it was not yet conclusive between the Sling Shot and the Phase Transition. When do you think that will be decided?
ANSWER: I am planning on doing a short video on that for the attendees since this is the key to what lies ahead. This is also the focus of the World Share Market reports we are finishing up right now which attendees will receive as well as the Dollar. The key will be decided by the Monthly Bearish Reversals. So pay attention. Likewise, the Euro is basing before we see the collapse. The Dollar is by no means finished just yet.
The World Share Markets Reports & the Dollar Report will be available for everyone to purchase. They are included in the price of the ticket for the WEC
Do the Reserves of a Nation Matter Anymore?
The goldbugs spun the tail that China was going to save them by making gold $50,000-$100,000 an ounce because money, in their minds, has to be tangible. However, China’s $3 trillion-plus in foreign currency reserves was the biggest stockpile in the world, They had no such intention of swapping it all for gold. As a percentage of global capital flow, China’s reserves reached 31% of total world reserves which dwarfs everyone else. Nevertheless, it still does not match the USA in 1950 after two World Wars. What made the dollar THE DOLLAR was the fact that by the end of World War II, the USA held 76% of total global reserves among nations. Nobody has ever reached that level again.
The argument that money must be TANGIBLE and backed by something has been exposed as false. One would have assumed that China’s massive foreign exchange reserves were as good as gold, providing an insurance policy against the country’s decline. However, the yuan has been a depreciating currency as a torrent of capital leaves the country. Indeed, Japan and Germany rose from the ashes without gold following the war. China also followed the same path, which proves that the wealth of a nation is its people and their total productive capacity.
The crisis brewing in China is the same pattern that unfolded after the concentration of capital within the USA following World War II. It was the migration of capital out of the USA that rebuilt the world. The Chinese are off doing the very same thing that the Japanese and Americans did after capital concentrated into their countries. Some are shocked at the alarming rate of dollars fleeing the country from the People’s Bank of China. China’s stockpile of foreign exchange reserves plunged by $513 billion (13.4%) during 2015 when it fell to $3.33 trillion as the nation’s central bank tried to manage a weakening yuan. This resulted in American politicians calling it “currency manipulation”, which reveals how stupid they truly are when it comes to international capital flows and the global economy. An estimated $843 billion in total capital left China between February and November last year alone.
Historically, this pattern is standard andALWAYS unfolds no matter what country we are looking at. I wrote about the ancient Wall Street of the Roman Empire in its day, known as the Via Sacra (Sacred Road). Cicero (106-43 BC) wrote that anytime there was news of a disaster in Asia Minor (modern Turkey), a financial panic would be unleashed in the Roman Forum on this very street. Why? Because the Romans followed the same pattern. As they conquered new lands, they turned them into emerging markets for investment. Cicero tells us that the infamous traitor Brutus (85-42 BC) had lent money to the King of Cappadocia (Turkey) and to the city of Salamis at a 48% rate of interest.
Capital flow has been the key to understanding the world economy. Money has ALWAYS moved for international investment. “Money” is really anything as long as it becomes an agreed unit of account. During the 5th Century AD, Saint Patrick, upon his arrival in Ireland, found that money was expressed in human slave girls. He wrote in his “Confession”, “I think that I have given away to them no less than the price of fifteen humans.” This passage shows something very important. First, money is not defined as a medium of exchange exclusively. Second, it serves the purpose of a unit of account. One did not go shopping dragging a bunch of slave girls; it was simply the unit of account, just as $1 million is a unit of account that does not physically exist as a single bank note. Money has moved around the world for prices in the outer-rim are always cheaper than in the core. Like New York City vs. Kansas or London vs. Manchester or Liverpool. This is what has been behind the rise and fall of nations for recorded history.
The historical battle has not been gold against intangible forms of money. It has always been private v public. Even if a nation declared gold to be $100,000 an ounce, that is still FIAT which is anything declared by a government against the free market. A currency peg is FIAT. VALUE of assets rise against whatever is money so money declines in terms of purchasing power. Deflation is when assets decline against money. The two are ALWAYS on opposite sides.
Gold declined in purchasing power when it was money during the 19th century which proves the point. Money and assets are always on opposite sides. When even gold was money it was not this miracle stability within an economic sea of chaos. The problem has NEVER been what is money – the real problem has ALWAYS been government mismanagement. So returning to a gold standard would never make politicians honest since we had Bretton Woods and they blew that gold standard up as well. Let’s stop focusing on what is money and pay attention to who really causes the wild swings in the business cycle and creates war – they are one group which always want to rule the world.
Right now, even Brazil is way above most countries holding 3% of world global reserves and Saudi Arabia has 6% while Switzerland comes in at 4%. Algeria has 1% as does Canada, Denmark, France, whereas Germany stands at 2% along with Mexico and Hong Kong beats that at 3% as does India, Russia and the USA. Japan has 10% of world reserves and it is not helping them at all. Looking atRESERVES, reveals that even reaching 31% does not provide security against an economic decline any more than the USA reaching 76% of world gold reserves following World War II.
The proof that government is INCAPABLE of managing the economy is the mere fact they keep raising taxes. If I managed your money and each month I lost and kept coming back asking for more because this time it’s different, how long would you keep handing me more money when I never provide any return?
Welcome to the way government manages our economy. They always run out of your money and constantly raise taxes blaming the rich for making too much.
Dow & the Trend For Now
Back on November 13th, 2015, we reported: “The Dow is pulling back on schedule. We do not see a breakout to the upside. This should tread water for a bit, waiting for everything to align. A closing today below 17785 will signal that this is not ready to breakout and a retest of support is likely. Key support lies down at 16500.” We have breached that support level now which brings us to focus on 15900-16100 area.
Here is the Weekly Array we published back then. Note that this past week of January 4th, was showing as a Panic Cycle even back in November 2015. Next week was highlighted as the turning point and we had a Directional Change coming into play next week as well.
The initial support at 16500 has given way and we Elected a Weekly Bearish Reversal today. That report was written just after the November high was made. We elected the first Weekly Bearish at that time which signaled a test of the next would unfold. Now we are focusing on the monthly support and if that gives way, then we see the Sling Shot move is most likely unfolding.
A Sling Shot differs from a Phase Transition whereas the former you go downFIRST and then swing around and make new highs. This was accomplished from both the 2007 top as well as the 1998 high no less 1987. A Phase Transition is simply an explosion to the upside which typically lasts at most 2 years or about 13 months.
Keep in mind that the MAJORITY must be wrong – ALWAYS. That is the very fuel which drives the markets. The best we have are the Reversals and the Arrays. Opinion fills the air. But opinion is not a forecast. The market will tell us what we face now. Next week is likely to see a lower low for it is the timing target and the Directional Change.
The November high implies a decline for the First Quarter. Everything will hinge now on the Monthly Bearish Reversals. The Global Market Watch finished the year also warning that we had a temporary high. The year-end closing was LOWERand it even closed below the OPEN of 2015. These were warning signs that we would retest support BEFORE making any new highs.
Market Talk – January 8th, 2016
As you would have expected, all eyes were on Shanghai as the stock market opened with no limit restrictions imposed. It was not to be the session from hell that some dealers had feared but was almost calm. It is human nature to want to sell when they are restricted. When they have the ability to exit, they think more clearly. Admittedly, we saw a 5% swing within the first hour or so but thereafter was controlled trading and higher prices. It is always the unknown that people fear most and the thought of where will the market open having been a Limit Down Close. The Nikkei returned a little of JPY safe-haven positioning of yesterday and hence the Nikkei closed small down (-0.4%). The HSI traded higher the majority of the day and closed off it highs but still up 0.6%.
In Europe all core markets saw bounces ahead of the US numbers and by lunch time all were around 0.6% firmer.
Exactly what the markets needed was a strong employment number and a 292k print from the USA which was far better than dealers could have wished for. There was a time when 200K was seen as a bearish number. Now, 200K is regarded as OK.
Despite an initial stock rally the nerves got the better of the market, especially ahead of the weekend and so we tended to drift in back in thin trade. Towards the close and the nerves returned and with it the seller’s. Eventually closing down 167 points this really has been a welcome to the New Year.
Oil traded on a much firmer tone (both up around 2%) on rumors that OPEC were planning an emergency meeting to discuss recent price movement. These rumors were denied by delegates but with talk of a global economic slowdown and China getting the blame, they may as well let the Yuan float sooner rather than later. This will undoubtedly be the main topic of many a Sunday newspaper.
Safe-haven assets lost yesterdays gains which resulted in losses for Gold and US Treasuries. The European peripheral spreads all returned their spreads with the added comment from ECB Council Member Philip Lane that more QE will be done if needed.
The strongest gainer was the US Currency making ground against core but also against EM currencies. The DXY (US Dollar Index) was last seen at (+0.4%). Main gains were against the GBP (+0.7%), PLZ (0.6%) and SEK (0.75%)
The strongest gainer was the US Currency making ground against core but also against EM currencies. The DXY (US Dollar Index) was last seen at (+0.4%). Main gains were against the GBP (+0.7%), PLZ (0.6%) and SEK (0.75%)
Dow Correction November High
The high for November was 17977.8, not 17210.43. I quoted the low instead of the high. See, we humans do make mistakes. Socrates was correct. That is why people ask, “What does the computer say?”
Looking for Sanity in an Insane World
Why has China become so important? Largely because global investors are in this transition mode and do not understand how or why the foundation of everything is changing beneath them. The market turmoil in China spread around the world on Thursday as global investors took their lead from China as a contagion unfolded with no real understanding. Some try to justify this by saying China is a casino and not a real market that is trading on speculation rather than solid earnings. Those types of statements reveal the lack of knowledge of the speaker since ALL markets trade on anticipation — NOT on earnings (anyone remember the DOT.COM bubble?).
So global markets look for direction and make up excuses as they go to try to make it sound logical. As we have been warning, China is in an economic decline into 2020. Sorry, but that is the way it is. There is no dark conspiracy to suppress metals — it’s a deflationary wave since commodities became addicted to the Chinese demand that is now retreating. The rest of the world is in the same boat of deflation set in motion by rising taxes and tax enforcement as governments suck an ever-larger portion of wealth to sustain themselves at the expense of the private sector.
The euro has paused, not because of any reversal in trend, but simply because everyone became too short and it forced liquidations on what they assumed was a one-way street based solely upon fundamentals. Yet, the euro has been unable to rally to reach key resistance just yet. The Japanese yen has not risen because of a bullish change in trend, which is just capital retrenchment as markets decline. Never forget, the higher a currency rises, the greater the economic deflation. The ONLY WAY to turn the U.S. economy down is for a dollar rally — not a decline.
China is doing itself a great disservice. Government may ATTEMPT to use its iron fist to control the invisible hand, but sorry, the invisible hand will win every time. The computer picked this week for the Panic Cycle in China back in November. These fundamental excuses are made-up to match the trading activity. The mere fact that the computer can continuously pinpoint the turning points well in advance demonstrates the trends are set in motion by the overall strength and weakness of a market. You can see these things coming if you know what to look for. Why do you think people have tried to grab the code?
Our forecasting models demonstrate that we as human beings are not capable, on a personal level, of ascertaining what is really happening, for it is far too complex out there in the world. Forecasting something on a personal gut feeling is stupid and just luck when correct. There are those who pretend to take our computer forecasts to sell crappy newsletters with claims that if you listened to them you would make $1 million for $29.95. That borders on consumer fraud. Others trying to criticize me on that same personal level by saying oh you said this or that, miss the point. This is not a personal forecast and judging me on the same basis as you judge others hides the truth of what this is all about — it is not about me — there is something much bigger here to be discovered.
Knowledge itself moves in cycles. Here is a silver Miliarense of the Roman Emperor Theodosius II (402-450 AD). Note that the reverse side of the coin depicts the emperor standing holding the world as a round globe. To the right is the scepter of the only Roman emperor to have been discovered. Here too, we see from Maxentius (306-312 AD) that the world is represented as a globe and not a flat piece of land.
The Chinese and Romans knew about each other; both claimed that the world was round and they were the rulers of the world. Yet knowledge is lost in the Dark Age and we returned to the primitive idea that the world was flat. What our computer is accomplishing is an awakening of knowledge that has been lost. This is a journey to rediscover reality.
Some blame the Fed for raising rates and question the validity of arcane indicators, such as the Chinese manufacturing index, while others claim that government is manipulating the value of the Chinese yuan. Still, others blame circuit breakers in China for inducing nauseating drops in the U.S. stock market as the surprise halt to trading hit the Chinese market. Some mix all of these explanations to explain the U.S. and European markets being thrown into a tailspin. Fundamentals are too often excuses while the reality remains behind the curtain hidden between the lines.
My advice to China: stand back and allow the free markets to settle. Stepping up to the plate only reveals that the government’s all-powerful iron fist is incapable of controlling the markets and the invisible hand ALWAYS wins. The government is risks a tremendous collapse in confidence once the people see the iron fist turn to rust and crumble on the floor. Once the people realize that the government is powerless (as took place in Japan and is currently unfolding in Europe and the USA) the pain is prolonged and the recovery is far harder to unfold. You can only cry wolf so many times.
Investors are confused. They want to cling to the old idea that raising interest rates is bearish for stocks because the talking heads are always saying the same thing. This is typical of these last 8.6-year cycles in a Private Wave. The actual THINKING PROCESS reverses and confidence abandons government and turns back to the private sector. Even the rise of Trump reflects that there is a change in the wind.
We are preparing an expanded study of the world economy for the 19th century. It was originally called the “Greatest Bull Market in History” and was published back in 1986. I have expanded it greatly, since I have learned a lot more since then. I put that together by reading the daily newspapers and quoting them as I went, so you can actually read how the public were interpreting the events and trends. This way, you can see what I am talking about. This is the rediscovery of knowledge to which there is a cycle as well. The ancients knew the earth was round. How did that knowledge vanish?
The fall of Rome destroyed a lot more than people realize. It was more than just gold coins vanishing until the 13th century. Knowledge itself also vanished and we are still clawing our way back to understanding. Personal opinion is meaningless for it does not even scratch the surface. Open your mind and you just may begin to see what we have forgotten.
So look at the arrays — they show you when things go nuts.
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