BRICS Will Not Kill the Dollar—War Will | Martin Armstrong

The BRICS currency was created for geopolitical reasons when the neocons transformed the SWIFT system into an economic weapon and even threatened China with the same fate if they supported Russia. Once this occurred, the neocons turned the entire world’s monetary system into a weapon of war. This is why we have BRICS; it had nothing to do with killing the dollar or backing their currency with gold.

 » All currency is fiat, even when it is gold. Just because a currency is

backed by gold does not eliminate inflation or deflation. «

Many hoped for an official announcement regarding a gold-backed currency, which failed to materialize. A gold-backed currency would be massively deflationary. The money supply could not expand with the population or in times of need without new discoveries. Just because a currency is backed by gold does not eliminate inflation or deflation. The gold discoveries of the 19th century in California, Alaska, and Australia caused significant economic upheaval, followed by wars. The fact that gold was the currency did not prevent inflation.

Spain defaulted seven times. The gold and silver they brought back from the New World led to massive inflation in Europe. Those who preach that a gold standard is the solution lack an understanding of history. They blame “fiat currency,” as if eliminating it will solve all problems. There were booms and busts throughout ancient times long before paper money existed. All currency is fiat, even when it is gold. I have shown that Southern India routinely imitated Roman gold coins because they held a premium over gold—this is fiat. Northern India and the Kushan Empire issued their own coinage primarily because they traded more with China. Southern India used imitation Roman gold coins for about 250 years, confirming that the Roman coinage was worth more than its metal content.

 

 » The purchasing power of gold fluctuated at all times. The value of a currency is determined 

by the productive capacity of its people, not by its gold reserves. «

Similar claims were made about the Euro, which also did not work out well. Why? The value of a currency is determined by the productive capacity of its people, not by its gold reserves. Japan and Germany lost the war yet rose to the top of the economic hierarchy because their populations were productive. The United States has the largest consumer-based economy, which means that everyone needs to sell their products here, requiring transactions in dollars. The US is also strong militarily, which further supports the currency's foundation.

It is time to abandon these outdated economic theories, remnants from the 18th and 19th centuries. The economy has evolved since then. The neocons are destroying the dollar and undermining the future of the United States. When we lose another one of their endless wars, financial capital will shift from New York to Beijing. Just as war diminished Britain, so will it diminish the dollar and the United States.

Quoted from:
Martin Armstrong (October 29, 2024) -  BRICS Will Not Kill the Dollar—War Will.

Global MAGA-nomics | Francisco José Fernández-Cruz Sequera

The re-election of Donald Trump will lead to significant shifts in US economic and foreign policy, emphasizing unilateral protectionism and high tariffs aimed at boosting domestic production and safeguarding American interests. This 'MAGA-nomics' approach may impose tariffs of 10% to 20% on all imports and up to 60% on Chinese products, intending to reverse US deindustrialization and create jobs in key sectors.

 

MAGA-nomics: The war Trump will wage in 2025.

Trump's trade rhetoric portrays free trade as detrimental to the US economy, claiming trade deficits indicate weakness and job losses. His strategy seeks not only to protect the domestic market but also to pressure other nations to enhance market access for US goods. However, such mercantilism poses risks, including potential retaliatory tariffs from other countries, which could escalate costs and inflation both in the US and globally.

 Chronicles of Western Collapse.

A drastic tariff increase could harm American consumers by raising prices and potentially increasing inflation from 6% to 9.3%. The confrontation with China is particularly complex, as high tariffs may prompt China to devalue its currency, exacerbating internal economic issues while potentially triggering further trade conflicts.

The European Union, a major US trading partner, would likely suffer from these tariffs, which could significantly impact its economy amidst already existing challenges. Projections indicate that a 10% tariff on EU imports could reduce the Eurozone's annual GDP growth by another 1%, further straining economic recovery.

 High tariffs, radical unilateralism, and the end of globalization as we know it.

Emerging markets like Vietnam, India, and Mexico may benefit as companies relocate production away from China, realigning global supply chains and potentially harming economies in Africa. The International Monetary Fund estimates that escalating trade disputes could reduce global economic growth by up to 1.3% by 2026, affecting millions worldwide.

Trump's approach extends beyond economics to form a coalition against China's influence, integrating defense strategies within economic policies (“Free and Open Indo-Pacific”). This could deepen geopolitical tensions and potentially lead to a new pro-China bloc. The historical precedent of protectionism, such as the Smoot-Hawley Tariff Act of 1930, illustrates the risks of such policies, emphasizing the interconnectedness of global economies and the potential for widespread negative repercussions.

Reference:
Francisco José Fernández-Cruz Sequera (October 28, 2024) - MAGA-nomics: La guerra que hará Trump en 2025. (video)

Fed Policy-Driven Super Rallies and Corrections in US Stocks | Sven Henrich

The US market is at a critical juncture with a contentious election, a Fed meeting, and numerous earnings reports on the horizon. A significant liquidity rally is underway, raising hopes for a year-end rally, yet concerns about a potential corrective move linger, especially after an 11-month rise. Despite strong bullish sentiment, skepticism remains due to insufficient changes in underlying conditions and earnings not meeting expectations. The S&P 500 is now at approximately 5,800, with some analysts projecting levels as high as 6,600, but these optimistic forecasts prompt concerns about sustainability.

Super rallies and corrections in the S&P, driven by interest rate cuts and hikes (2016–2024).

 

Liquidity-driven super rallies, influenced by Fed policy on interest rates, are characterized by prolonged market increases with minimal price discovery. The first major super rally in the above chart followed the earnings recession of 2015-2016, fueled by tax cuts and global quantitative easing. Subsequent rallies occurred despite rate hikes, indicating a strong influence from central banks and government policies. These rallies often persist until liquidity conditions shift, such as through rate increases or unexpected events. 

 

Currently, global central banks are signaling easing policies, contributing to the ongoing liquidity rally. Fiscal dominance, marked by significant deficits, plays a crucial role in this environment. The unprecedented $1.6 trillion deficit in 2023 raises questions about recession potential amid fiscal stimulus. Past experiences show that downside movements typically arise when liquidity changes. The current market situation highlights a disconnect between strong policy support and underlying economic conditions. Overall, these factors suggest that the rally extend through the end of the year or into 2025, but risks remain.

 

Reference:

Sven Henrich (October 27, 2024) - NorthCast Market Update: Markets at a Crossroad. (video)

Markets expect the Federal Open Market Committee to 

cut interest rates again by 0.25% on Thursday, November 7.

 

The median Nasdaq 100 (NDX) return from October 27th to December 31st is +11.74% since 1985.  
The median S&P 500 return from October 27th to December 31st in election years is +6.25% since 1928. 

— Goldman Sachs, October 27, 2024.

 

See also:
Sven Henrich (January 14, 2024) - The Cynic’s Guide to Markets.

Equities Endgame? Spectrum Cycle Analysis of US Indices | Richard Smith

 NASDAQ (4-hour closes) - at the top of an 82-day cycle swing.

  E-mini S&P 500 (daily closes) - at the top of an 81-day cycle swing.

S&P 500 (weekly closes) 2017-2024 vs. 180-week cycle composites of all major US stock indices.

Reference:
Richard Smith (October 29, 2024) - Equities endgame? Cycles are screaming caution! (video)

 

Hurst Cycles Market Update — David Hickson, October 28, 2024.

Hurst Cycles in the S&P 500 — David Hickson, October 9, 2024.

Best Six-Month Stretch for the S&P 500 Begins in November | Ryan Detrick

November through April has historically been the Best Six-Month Stretch, rising 77% of the time for an average gain of +7.1%.

 Best Six Months of the Year.

May through October has historically been the 'Worst Six Months,' rising only 65% of the time, for an average loss of -1.7%. However, this year, investors who "sold in May and went away" missed out on +15.6%, making it one of the strongest 'Worst Six Months.' since 1950. When the S&P 500 rises double digits during its 'Worst Six Months,' the following year has been higher 91% of the time, for an average gain of +13.2%.  

 

We found 11 other times stocks gained double digits from May through October and the next six months did even better, gaining 10 times and up 13.2% on average, well above the 7.1% average seen in all years.

 

November is historically the Best Month of the Year.

 

November is historically a very strong month for stocks. The last time the S&P 500 fell more than 1% in November? 2008. It has been higher 11 of the past 12 years. Best month since 1950, the past decade, and in an election year. The second best month the past 20 years (only July is better).

November, December, and January are historically the Best Three Months of the year for stocks.

Best Three Months of the Year.

The S&P 500 might be up six months in a row soon, but October still has a few more days. But it is already officially up five months in a row. Historically, the year after a five-month win streak the S&P 500 has been higher 28 out of 29 times and up more than 10% on average. 

 

 The fun doesn’t stop just yet, as when stocks gain ten of eleven months (like now) they are higher a year later nine out of ten times and up nearly 15% on average. In other words, this blast of strength we’ve seen isn’t a reason to turn bearish. In fact, it might be a reason to remain in the glass half full camp as we head into 2025.

 

 Up 10 of 11 Months Is Also Bullish.

 

We might be past the beginning of the bull market, but by no means does that mean it is done. Going back 50 years, we found there were five other bull markets that made it past their second birthday. Wouldn’t you know it, the worst any of them did was lasting another three years (which happened twice). 

 

Meanwhile, the average bull lasted eight years and gained 288% when all was said and done. No one knows how long this bull will last, but the bottom line is history says be open to this bull market lasting much longer than probably most expect.
 

 

 

Meanwhile, the average bull lasted eight years and gained 288% when all was said and done. No one knows how long this bull will last, but the bottom line is history says be open to this bull market lasting much longer than probably most expect.

Reference:

Ryan Detrick (October 29, 2024) - Seven Reasons This Bull Market Is Alive and Well.
Ryan Detrick (October 28, 2024) - The Best Six Months of the Year Are Here.

Cosmic Cluster Days | November 2024

Cosmic Cluster Day  |   Composite Line  |  Cosmic Noise Channel

○ = Full Moon | ● = New Moon

Cosmic Cluster Days (CCDs) and financial markets do not exhibit a consistent polarity or directional bias. However, swing directions, along with swing highs and lows—also within the 'noise channel'—may correlate with or coincide with market movements and reversals. For previous CCDs, click HERE. For background on the author, the concept, and the calculation methods, click HERE. See also:

 

 Seasonality.

 Sensitive Degrees of the Sun. 

 Geocentric Bradley Barometer.

 Monthly Astro Calendar.

 Lunation Cycle.

 SoLunar Rhythm.

The Truth About American Freedom and Democracy | Shahid Bolsen

As an American, we grew up with a constant drumbeat telling us what a great country America is because it's so free and boasts so many freedoms. This is the ultimate example of a misconception: America, the land of the free. This phrase is completely meaningless. Ask an American what they mean by freedom. What do you mean by the freedom you have that others don’t? The average American citizen has less freedom than any random villager in Indonesia or Ghana or anywhere else in the Global South.

» What do you mean by the freedom you have that others don’t? «

What freedom are you even talking about? Most Americans are living paycheck to paycheck. For many, missing even one paycheck means being thrown out onto the street. That’s the reality. You don’t just have one master in America when it comes to your slavery. We talk about debt slavery, wage slavery, and so on. Your employer is your master. Your student loan officer is your master. Your landlord is your master. The credit card bureau is your master. Your mortgage loan officer is your master. Your insurance adjuster, your Health Maintenance Organization, the Internal Revenue Service, your credit card company—they are all your masters. In America, you are a slave with many masters, and they all have their chains on you, each with their own lash to use on your back. So what freedom do you have?

 

» In America, you are a slave with many masters. «

You have more laws and regulations in America than in any other country in the world. The average American's daily life is governed, influenced, restricted, or determined by tens of thousands of laws and regulations—upwards of 50,000 to 100,000 rules at the municipal, state, and federal levels—not to mention the rules imposed by your employer. Most of these rules exist under the pretense of making society better and protecting you, but the truth, known by any American who is paying attention, is that these rules exist primarily to generate revenue for the enforcing bodies through fines and fees. That’s the real purpose behind most of these regulations. It's not about health, safety, or security; it is just about making money off you.

And in this so-called great democratic country, you have no say in how any of that money is spent. You have no say in how the funds collected from you are utilized. So I ask again: what freedom do you really have? What freedom is so special and unique? Honestly, none. Zero. There are no freedoms you have in America, that are not available elsewhere. And there are freedoms elsewhere that you do not have in America. But they constantly tell you how free you are, implying that every other country is an oppressive tyranny where no one can do anything. 

 

» And there are freedoms elsewhere that you do not have in America. «

Moreover, the overwhelming majority of Americans never leave the country, so they don’t even know what life is like anywhere else. Western civilization has never truly believed in freedom as the highest value. That’s the reality they don’t want you to know. It’s just part of the sales pitch to convince you how wonderful your society is. If you trace back to the alleged philosophical roots of Western civilization in ancient Greece, the philosophers they tout as inspiration—Aristotle, Plato—did not subscribe to this belief in unqualified freedom. The true foundation of Western thought has always been more authoritarian and classist than liberal and democratic. They prioritized order and the security of the status quo over liberty and freedom. They always believed in power being held by the elite. If you actually read these philosophers, whether they are Greek, Enlightenment thinkers, or the so-called founding fathers, you will see the lineage of thought behind the modern Western power structure. They sell the public an idea of freedom, but anyone with common sense knows that you can’t base an organized society solely on liberty and the so-called sovereignty of the individual.

 

» The entire democratic mechanism is designed to marginalize the population. «

Anyone who thinks about it for more than five seconds realizes this. How long would such a society even last? But the government and the power structure don’t even respect the population enough to tell you that. They don’t want you to understand the real system you live in. Instead, they tell you how free you are and indulge your fantasies because they perceive you as childlike. That’s why they don’t educate people properly. The level of idiocy imposed upon the public in America is astronomical. You might point to the freedom to criticize the government or to protest. But they only grant you the freedom to protest in a 'democracy' when they aren’t actually providing you with democracy. Think about it: why would you need to go out into the streets to demand change if you have a functioning democracy? If political mechanisms exist to meet your demands, why protest? Because your government ignores you. That’s why. Your freedom to protest and to criticize the government just means you have the freedom not to be listened to. In fact, democracies have perfected the exclusion of the population from policy-making decisions. The entire democratic mechanism is designed to marginalize the population.

 » Anyone who thinks about it for more than five seconds realizes this. «

Right now, they have you focused on the election, thinking about who will win, who to vote for, or who to vote against, while real power is completely removed from that process. They have distracted you from where real power lies because they have convinced you how free and democratic your society is, which, in practical terms, means you have no power whatsoever. You have no voice. That is why it doesn’t matter when you protest in the street; it matters no more than casting a vote in a ballot box. Both actions hold equal significance regarding policy outcomes. It starts from the misconception that your so-called civilization ever believed in freedom, liberty, and democracy. Those who rule over you never believed in that for a moment. What you have is the system they intended you to have—a system where power is held by the elite and the population is completely disempowered.

Quoted from:
Shahid Bolsen (October 26, 2024) - They Never Intended For You To Be Free. (video)

 

 What a spectacle.

Hidden Signs and Obvious Clues | Janet Yellen

The moment United States Secretary of the Treasury Janet Yellen uttered the phrase "the dollar is the world's reserve currency", the coat of arms of the US Treasury Department fell off her lectern and crashed to the ground.

October 22, 2024.

S&P Cycle Analysis - Time and Price Projections Update | Steve Miller

The upcoming week marks the pre-election period, where heightened election anxiety and a significant earnings schedule are expected to drive high volatility. This trend is likely to continue through election day. Historical analysis shows that the September to November timeframe has often been associated with increased risk, frequently leading to substantial market corrections.

 

SPY (weekly bars), the MACD, and the extreme stretch between the 13-week and 89-week 

moving averages, which historically always leads to extended corrections.

 

Stocks have demonstrated remarkable resilience, displaying behavior that can be characterized as extreme. The above weekly chart of the SPY highlights this dynamic, tracking the moving average convergence divergence (MACD) alongside the distance between the 13-week and 89-week moving averages. Currently, the MACD indicates an unusually wide gap between these averages, suggesting a potential correction on the horizon.

 SPY (weekly bars), six-month cycles, three-month cycles.

When such corrections occur, they can be quite severe. Although the market has remained strong, November and December are anticipated to experience downturns due to the current extremes, which could lead to several challenging weeks ahead. Nevertheless, broader analysis suggests that the bull market may extend into 2025 before facing a significant downturn, potentially resulting in years of low or negative returns in the stock market.

 SPY (daily bars) and 21-trading day cycles with projected ideal troughs around 

November 6 (Wed) and December 4 (Wed), with a margin of ±3 trading days.

An examination of the SPY across various timeframes, including weekly and two-hour metrics, reveals a deterioration in the two-hour indicators, often the first sign of an impending correction. Historical examples, such as the market's reaction following the 2016 Trump election, highlight the potential for volatility. On that occasion, the Dow fell nearly 800 points before rebounding. Similar large movements are anticipated in the days leading up to and following this forthcoming election. While signs of a downturn have been expected for weeks, the market continues to set the course, underscoring its ultimate authority.

Reference:
Steve Miller (October 25, 2024) - S&P 500 Cycle Analysis - Time and Price Projections Update (video)

 

 

Hurst Cycles in the S&P 500 — David Hickson, October 9, 2024.

Halloween Trading Strategy Begins Next Week | Jeff Hirsch

Next week provides a special short-term seasonal opportunity, one of the most consistent of the year. The last 4 trading days of October and the first 3 trading days of November have a stellar record the last 30 years. From the tables below:

     S&P 500: Up 25 of last 30 years, average gain 1.96%, median gain 1.61%.
     NASDAQ: Up 25 of last 30 years, average gain 2.43%, median gain 2.29%.

     DJIA: Up 24 of last 30 years, average gain 1.95%, median gain 1.39%.
     Russell 2000: Up 23 of last 30 years, average gain 2.34%, median gain 2.56%.

Many refer to our "Best Six Months Tactical Seasonal Switching Strategy" as the "Halloween Indicator" or "Halloween Strategy" and of course “Sell in May”. These catch phrases highlight our discovery that was first published in 1986 in the 1987 Stock Trader’s Almanac that most of the market’s gains have been made from October 31 to April 30, while the market, on average, tends to go sideways to down from May through October.

Since issuing our Seasonal MACD Buy signal for DJIA, S&P 500, NASDAQ, and Russell 2000, on October 11, 2024, we have been moving into new long trades targeting seasonal strength in various sectors of the market via ETFs and a basket of new stock ideas. The above 7-day span is one specific period of strength during the “Best Months.” Plenty of time remains to take advantage of seasonal strength.

Quoted from:
Jeffrey A. Hirsch (October 24, 2024) - Halloween Trading Strategy Treat Begins Next Week. 

 

 Election-Year Octoberphobia — Jeff Hirsch, October 9, 2024. 

 

 November Performance in “All Years” (1930-2015) and “Election Years” (1932-2012) 

— Jeff Hirsch, November 15, 2016.

 November Market Performance (2001-2021) — Jeff Hirsch,  October 20, 2022.

 

October 28th has, on average since 1950, been the strongest day of the year.
 

 

 S&P 500 average Performance per Day & Day by Day Hit Rate (1928-2024).

 

S&P 500 Seasonal Pattern for Q4 of the Election Year 2024
- Presidential Cycle in line with the Decennial Cycle.
 

The Cycle Composite for 2024 combines the 1-year, 4-year, and 10-year cycles. 

Trends are more important than levels. —  Ned Davis Research, October 15, 2024.

 

 S&P 500 E-mini Futures (daily bars) and current 21-Trading Day Cycle ( ± 3 TD).

 

ooooOoooo

 

Goldman Sachs' technical strategist Scott Rubner indicates that US stocks are entering a favorable trading environment due to capital flow trends. He expects the quiet period for stock repurchases to end on October 25, with listed companies likely to engage in significant buybacks in November and December, estimated at $6 billion per day, accounting for 21.1% of annual buybacks.

As mutual funds, the largest sellers of US stocks, begin to withdraw before Halloween, this may positively impact stock prices. October marks the end of the fiscal year for most mutual funds, potentially leading to sell-offs of underperforming assets for tax reasons. Rubner noted that all 756 mutual funds, valued at $1.853 trillion, end their fiscal year on October 31, 2024. Historically, American households increase stock purchases in November, with capital inflows into mutual funds and ETFs peaking during this month.

 In Q4 2024, the NASDAQ may gain more than double what the S&P gains.

Looking ahead to the US election, Rubner suggests that post-election, market volatility may reset, benefiting various trading strategies. Additionally, strong non-farm payroll growth and shifting inflation expectations are becoming critical market factors, particularly regarding a potential Trump election victory, which may reignite trading interest.

By end of 2024, S&P far above 6,000 —  Scott Rubner, October 15, 2024.

 

See also:
Steve Miller (October 25, 2024) - S&P 500 Cycle Analysis - Time and Price Projections Update (video)

S&P 500 Cycle Analysis - Time and Price Projections | Steve Miller

SPX (monthly bars)

SPY (weekly bars)

SPY (daily bars)

SPX (daily bars): ideal 21 Trading Day cycle trough November 6 (Wed) ± 3 days.

VIX (daily bars)

Looking at weekly, daily, and intraday charts, our proprietary indicators indicate a strong bullish sentiment, with the SPY, and QQQ showing very bullish trends. While corrections are often anticipated, the market conditions do not suggest a need to short at this time. The S&P weekly chart remains strong, showing no signs of a peak yet. Although historical valuations are high, there is currently no indication of an impending downturn.

However, we also need to consider potential downside projections. While the market is currently strong, indicators and cycles suggest that we should be cautious as we approach the election period. We anticipate a pullback of approximately 6-10%, with the potential to reach new highs afterward. While cyclical patterns indicate possible declines in Q3 or Q4, our analysis suggests that major corrections might be more pronounced in November or December.

We are experiencing an elevated VIX during a strong market, likely due to geopolitical tensions and the upcoming elections. Historically, such an elevated VIX during bullish trends raises questions about potential market peaks and whether investors are hedging against upcoming volatility. The cycles suggest that implied volatilities might rise sharply post-election, possibly reaching the mid-30s or higher.

Reference:

Steve Miller (October 19, 2024) - US Stock Market - S&P 500 SPY | Price Projections & Timing | Cycle and Chart Analysis. (video)