New Insights in Commodities | Cyclic Vibrations

Ahmed Farghaly (Jul 1, 2016) - The first chart is a synthetic chart of commodities. The way it was constructed was by isolating the second 18 year cycle of three 54 year cycle. The reason why I extracted the second 18 year cycle is because this is the cycle we are in right now in terms of commodities hence it should be correlated more with its counterpart in past 54 year cycles. I have also altered the length of the cycles to match the current average length of the 18 year cycle which is approximately 14.4 years. I then combined those cycles together in order to get a continuous series so I can isolate the cycle via spectral analysis and run neural network models on this particular position of the Kondratieff wave. The indicator that you see above is a neural network model with an 14.4 year cycle used as an input and the detrended zigzag as the output. This indicator's turning point should mimic those in the future provided that no significant changes occur to the length of the nominal 18 year wave. The second chart depicts the dates more clearly.

It is worth mentioning that the 14.4 year cycle with 4 harmonics was used as the input rather than just one harmonic, the reason for this was to aid us in depicted the peaks and troughs of the cycles smaller than the 14.4 year wave. As is visible on the chart above, we seem to have a clear path in the CRB index until late 2017. The projection also suggests that 2018 is likely to be a bad year for commodities. This correction should then be followed by a move into 4th quarter of 2020 followed by a correction to 2022 and so on (third chart).

In the neural network model below the price chart is an up percentage move indicator (fourth chart). It is calculated by having the cycle as an input and measuring the position of moves of over 7% a month and projecting something similar for the future of the current cycle. The likelihood of large percentage months on a closing basis is greatest from here going into mid 2019. Hence capital is best allocated in the commodity market now rather than chase the move after most of the large percentage gains have already been realized (fourth chart).

This indicator (fourth chart) is a forecast of the volatility index indicator using the same input as the charts above. It seems evident that the likelihood of high volatility is greatest from now going into 2020. This would mean that the purchase of call options are likely to be a better play than their sale in the upcoming environment. Trading in expectation of low volatility will probabalisticly lead to a loss going into 2020.

SPX: NR7 Inside Day | Bull Pennant Flag | Put / Call Ratio | VIX

June 21 (Tue) formed a narrow range inside bar - usually a trend continuation pattern (HERE).
Oscar Carboni sees a Bull Pennant Flag on the daily ES (HERE).

The daily range was the narrowest of the last 8 trading days (HERE), and volume contracted.
Today a breakout of yesterday's range is  likely.
However, Brexit-Thursday (Jun 23) is the next solunar turn-day, and the market may just wait for that.

Room to the top.
Source: CNN Fear & Greed Index

Summer Solstice Full Moon

“It is very true, some of the Ancients have Winter and Summer, made the day and night to consist of equal hours.
I mean every hour to consist of sixty minutes, equally; but Astrologists do not so, but follow this method, viz.
according to the motion of the Sun both  Summer and Winter, so do they vary their hours in length or shortness.”
One measures the time between sunrise and sunset and divides it into 12 equal parts.
These are the planetary hours (HERE)

June 18 (Sat) was a minor turn day in the geocentric and the heliocentric Bradley Indices,
June 20 (Mon) was a rare Summer Solstice Full Moon, the stock market seems in line with the SolunarMap,
and should move sideways-to-down into Brexit-Thursday, June 23.

Calculated and charted with Timing Solution.

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Crude Oil Production Costs | IMF

Source: IMF

The End of Cheap China | 16 Emerging Low Wage Economies

Post-China 16 countries

 

China has completed its cycle as a high-growth, low-wage country and has entered a new phase that is the new normal. China will continue to be a major economic force but will not be the dynamic engine of global growth it once was. International capitalism requires a low-wage, high-growth region for high rewards on risk capital. In the 1880s it was the United States, for example. China was the most recent region, replacing Japan. 

 

No one country can replace China, but we have noted 16 countries with a total population of about 1.15 billion people where entry-level manufacturing has gone after leaving China. Identifying the Post-China 16 countries is not a forecast. It is a list of countries in which we see significant movement of stage industries, particularly garment and footwear manufacturing and mobile phone assembly. The Post-China 16 countries are strictly successors to China as low wage, underdeveloped countries with opportunities to grow their manufacturing sectors dramatically.

The new activity is focused on Africa, Asia and to a lesser extent, Latin America. When you look at the map, much of this new activity is focused in the Indian Ocean Basin. The most interesting pattern is in the eastern edge of Sub-Saharan Africa: Tanzania, Kenya, Uganda and Ethiopia. It is primarily garment and footwear manufacturers that are firstly starting to relocate. The second area where there has been a change-over is the market of cell-phone assembly operations. In the first field it’s the skills that are easily exploitable in the workforce. In the second sector of activity is the need to have low-prices to be competitive. 50 Turkish garment factories are currently relocating to Ethiopia for example. Hennes & Mauritz AB (H&M) are also currently considering purchasing more than 1 million garments from Ethiopia every month. Costs per unit in Ethiopia are 50% cheaper than in China at the moment. However, this is estimated to rise to the current Chinese level by 2019. Chinese salaries increased last year by 17.1% and the previous year it was 18%. Salaries in China are on average just 30% lower than in the US today. Salaries in China now exceed those in Mexico and in Turkey. Ethiopia has an economic growth of 10% today. However, it remains one of the poorest countries in the world despite having one of the top economic-growth prospects of the continent.

Sri Lanka, Indonesia, Myanmar and Bangladesh are directly on the Indian Ocean. The Indochinese countries and the Philippines are not on the Indian Ocean, and even though I don't want to overstate the centrality of the Indian Ocean, they are nearby. At the very least we can say that there are two ocean basins, the Indian Ocean and the South China Sea. Peru, the Dominican Republic, Nicaragua and Mexico are the Post-China countries in Latin America.

Source:

Stratfor (Dec 28, 2015): Annual Forecast 2016 [republished with permission].

 

China's strength in infrastructure spending. Its bar is the highest.
The colored slices represent different kinds of infrastructure, while the width of the bars signifies the size of the economy.
The U.S. bar is wide and short because it represents a big economy with low spending. Source: Bloomberg.

 

Artificial Intelligence Long Range Forecasts | Stock Indices | Crude Oil | Gold

FFC Long Range Forecasts rely exclusively on Artificial Intelligence and Machine Learning to analyze and model.
Source: Financial Forecast Center, LLC.

Red dots represent monthly mean prices. First dot after the dashed vertical is June 2016, last one November 2016.

 

 

 

MarketVector Financial Forecasts produces long range forecasts using Multichannel Singular Spectrum Analysis (MSSA).
MSSA to decompose the time series into a trend component and many cyclical components. The decomposed
components of the time series are then projected forward in time.

Chartsedge  provides stock market forecasts are based on cycle
data which has been analyzed by a Pattern Recognition Program.

McVerry Report generates 5-Day U.S. Market
Forecasts based on Artificial Intelligence.

German Bunds | 10 Year Yield (%) 1807 - 2016

Source: FTAlphaville

SPX | VIX | CBOE Options Equity Put/Call Ratio

The VIX opened and closed above the upper Bollinger Band. Stochastics (%k) at 83.11 hint to a short term reversal of the VIX.

The 118 CD Cycle suggests a 1-2 day countertrend.

The 3 Day MA of the Put/Call Ratio at 0.79 still offers some room to the downside for the SPX.

Weapon of Mass Migration | The US War on Europe

Open Gates: Coerced collective
suicide of European nations (Here)

Artificial mass migration as imperial policy has a long history, and the current mass migration into Europe is the brain child of US military grand strategist Thomas P.M. Barnett. He was a strategic advisor to former US Secretary of Defense Donald Rumsfeld and currently works with the Israeli military consultancy firm Wikistrat, a close collaborator of the US Africa Command (AFRICOM) in Stuttgart, Germany. Barnett’s books 'The Pentagon’s New Map' and 'Blueprint for Action' (2004, 2005) have had a major influence on US and Israeli global military geostrategies. Today Wikistrat is heavily involved in the development of ‘crowd sourcing’ and ‘crowd leveraging’ technologies, and most of the Twitter entries encouraging migrants in the Middle East and Africa to travel to Austria, Germany and Sweden come from the UK, US and Australia (Ayn Rand Institute, The Escape Institute, etc.). Barnett came up with the theory of the ‘Five Flows of Globalisation’ — five flows which must come about if US imperialism wants to prevail in the world of the 21st century. These involve the free flow of money, security, food, energy and people. The ‘Five Flows’ theory means breaking down nation-state structures and freeing up resources for pillage by US multinational corporations and hyenas of high finance. The inundation of Europe with migrants is a key feature of Barnett’s geostrategic thinking: “1.5 million immigrants from third world countries to Europe every year. The result will be a mixed new population with an average IQ of 90 - too dumb to grasp anything, but intelligent enough to work.”

Not welcome anymore (HERE)

In her book Weapons of Mass Migration: Forced Displacement, Coercion and Foreign Policy (2011), Kelly M. Greenhill argues that one of the reasons for Europe’s rapprochement with Libyan leader Muammar Gaddafi was the latter’s offer to stem the tide of African emigration to Europe. It would be erroneous, therefore, to suggest that the chaos wrought by the Arab Spring, the devastation of Libya and the killing of Gaddafi were unintentional. EU borders have long been deconstructed by EU utopianism of a borderless world. This fits perfectly with Greenhill’s “hypocrisy cost” of wealthy liberal nations which can be coerced by specifically such open border vulnerabilities. Hundreds of thousands of migrants are equipped with welcome booklets published by a George Soros foundation. Written in Arabic, and packed with maps and useful information on where to go, what to do, whom to refer to, and which sob story to tell to the European authorities, these rough-guides are distributed by an ominous NGO called w2eu.info, which stands for “Welcome to the EU”. One is reminded of the non-violent revolution hand book by Gene Sharp which was used to train activists in the US-Israeli fomented counter-revolutions in North Africa in 2011 (HERE). Since the very inception of the ensuing 'refugee crisis' the multi-billion dollar business of human trafficking into Europe and the booming asylum-industry is controlled by the EU Commission, globalist fifth columns inside EU member states, by the Erdoğan regime, ISIS, the Italian Mafia, certain oligarchs, and the CIA. 

Reporting on services rendered.

In 2015 the Merkel regime certainly had foreknowledge of what would happen when the chancellor repeatedly issued her infamous “Welcome” calls to not only Syrian war refugees and their families but to any “asylum-seeker” in the world. Merkel had been warned personally by her domestic intelligence and the Joint Centre for Illegal Migration Analysis and Policy that Europe's borders would be stormed and Germany and her neighbors seriously and permanently damaged and destabilized (HERE). But Merkel is clearly cooperating with a script originating from western intelligence agencies that follows the Greenhill recipes. In May 2016, facing a new mega-wave of migrants out of Libya into Italy, Merkel steadfastly refuses to close borders. By mid 2016 1.8 million “refugees” had invaded Germany. More than 1.5 million of them are young men aged 20 to 35, outnumbering the German army by the factor of 20 already. While thousands of them are ISIS and Al Nusra fighters, thousands of these invaders are actually housed on active military bases. The total cost to entertain 2 million “refugees” for the next three years was estimated to be 900 billion Euros - more than twice the federal government's annual budget of 2014. Quoting Shakespeare: “Though this be madness, yet there is method in't.”

Jihad - Muslim Invasion (HERE)

What we are dealing with here is a well-planned strategy of chaos. Washington is the driving force of this strategy that destroys entire states and nations, causing a chaotic chain reaction of division and conflict to be used according to the old method of "divide and rule." We are witnessing a genocidal covert war being waged by the Anglo-Zionist power elite on the nation states and peoples of Europe. Migrants are weaponized to create social chaos and fiscal constraints in order to prevent Berlin’s inevitable rapprochement with Moscow. The migrants cannot possibly integrate into society if the German economy does not integrate into Eurasia, as Germany will have insufficient access to resources and energy, and no viable markets for its exports. Let Europe whither on the vine. Keeping Russia and Germany separate and in conflict has been the primordial geopolitical objective of the US in Europe since 1871. Barnett predicts that both western Europe and Russia would disintegrate in the 21st Century, leaving only India and China to rival the United States. US strategists believe that coercive engineered mass migration into Europe, coupled with the American occupation of Eastern Europe and the Balkans, with terrorism and the destabilization of the Ukraine, with currency wars, trade wars, and hot wars, would altogether prevent Eurasian integration, whilst securing control over Europe and establishing the conquest of Africa would ultimately safeguard future US global supremacy. 

This is the plan and its implementation is underway. However, this will not solve any of the US' major problems: Losing the dominating position in world production, finance, trade, transport, and communication. The center is drifting towards China and other Asian countries. The US financial hegemony is endangered by the collapse of the dollar pyramid of state obligations, and the dollar's position as the world currency is undermined by the processes of regional economic integration, namely by China and Russia. As the US financial and economic system cannot be kept in balance without powerful and growing outside support, it feels objectively forced to escalate military and political tensions and eventually start a world war, that it cannot win. Von Clausewitz would have immediately realized. But Barnett is a brute, a gambler, a mercenary strategist.

HERE

On a larger time-scale, we are currently living through the repetition of the 100 Year War Cycle and the conclusion of Arnold Toynbee's 500 Year Cycle of Civilizations. We are living in a period that Antonio Gramsci termed an interregnum, morbid times, times of chaos, in which the old is dying, and the new is not born yet. The first decades of this millennium are similar to the early 16th century in Europe, times of technological innovations, population growth, migrations, capitalist expansion, but also religious secession, fanaticism and war. The process was finally directed to outer European conquest, and the ascent of the imperial West (HERE). Today the fate of the US empire largely depends on whether Russia will be sufficiently destabilized and subjected to the globalist oligarchy. Russia is the Heartland and has everything necessary to become the cornerstone for the next world system. Whether the new emerging multipolar system of civilizations and big spaces will be able to establish and to defend itself, is currently decided in Russia, by Russia, and through Russia. 

The spin-doctors and architects of this epic mass migration and population replacement unleashed a monster: French, Italians, Germans, Anglo-Saxons, Irishmen, Swedes, Poles, and almost every other European ethnic group are marked for replacement, i.e. demographic extinction. The utopia of multiculturalism failed and is rejected. Instead Europe is headed for ethnic clashes and breakdowns of economic, social, political and international regimes. However, the globalist's Great Replacement project itself may never reach its ultimate end. Naturally it is unacceptable to passively surrender, and to be dominated and replaced by invaders, by barbarians in the literal sense of the word. Pan-European Nationalism is on the rise across Europe. Radicals and fanatics are ready to defend their lands and cultures at all costs. They are prepared to topple and destroy abusive regimes, to wage civil war and pogroms. What nobody seems to be prepared for is how to recover and what should be build instead. Once the US hegemony diminishes, the leftovers of a shattered Europe may finally become absorbed in some Sino-Russian dominated Eurasian empire (HERE).

CHF Long Against EUR + USD | EUR/USD to Double | Cyclic Vibrations

Ahmed Ferghaly's latest cyclic analysis of currencies searches for possibilities to long against the USD in the upcoming
environment. EUR and USD are likely to perform a continued, maybe drastic devaluation towards the CHF into 2019.
Then the recovery rally of the EUR is expected to last into late 2023 (HERE + HERE)

In this 18 Year Cycle the EUR should double to the USD (HERE).

Who Owns What In The FTSE 100?

HERE

SPX | Extreme Greed but Room to the Top

The VIX (CBOE volatility index) revisited the Oct 28, 2015 low at 12.8 and reversed to the upside,
while the SPX formed a NR4, and a doji candle. June 8 (Wed) is 118 CD (4 Lunar Cycles) from the major low on Feb 11, 2016.
The SoLunar Map points to a high on June 9 (Thu). There is a cluster of 3 potential Jack Gillen turn days from June 6 to 8.
Since June 10 (Fri) is a Cosmic Cluster Day, the indices may keep chopping up into Thursday or even Friday.
Please note: The NYSE McClellan Oscillator and the the McClellan Ratio Adjusted NYSE Summation Index are still rising
(HERE + HERE)

Credits: CNN Fear & Greed Index

Spotless Sun | Solar Cycle # 24 weakest in more than a Century

Not a single sunspot since June 3rd. However, solar activity of course continues modulating geomagnetism,
 and in some two or three days sunspots should reappear from region #12,546, currently still on the sun's farside.
The current Solar Cycle # 24 is the weakest solar cycle in more than a century with the fewest sunspots since
Solar Cycle # 14 peaked in February 1906.

The Sun rotates counterclockwise, but not as a rigid sphere:
The equator rotates faster than the poles (differential rotation).

One Pint of Kindness. One Quart of Laughter. One Pinch of Concern.

"I’d like them to say he took a few cups of love. He took one table spoon of patience. One tea-spoon of generosity. One pint of kindness. He took one quart of laughter. One pinch of concern. And then he mixed willingness with happiness. He added lots of faith. And he stirred it up well. Then he spread it over a span of a lifetime. And he served it to each and every deserving person he met." 

Muhammad Ali (January 17, 1942 – June 3, 2016) on "How I’d like to be remembered" (1974).

Global Oil and Gas Exploration and Development | US + CAN in Free Fall

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The Baker Hughes International Rotary Rig Count is a monthly census of active drilling rigs exploring for or developing oil or natural gas outside North America (U.S. and Canada). The count does not include rigs drilling in Russia, the Caspian region, Iran, Sudan, Cuba, North Korea or onshore China. Iraq was excluded from the International Rotary Rig Count for the period September 1990 to May 2012. Syria is currently excluded from the International Rotary Rig Count as of February 2012 due to difficulty obtaining data as a result of continued civil unrest.

The international rig count for April 2016 was 946, down 39 from the 985 counted in March 2016 , and down 256 from the 1,202 counted in April 2015 . The international offshore rig count for April 2016 was 220, up 9 from the 211 counted in March 2016 , and down 80 from the 300 counted in April 2015 .

The average U.S. rig count for April 2016 was 437, down 41 from the 478 counted in March 2016 , and down 539 from the 976 counted in April 2015. In late May only 404 rigs were left in operation in the U.S.. The average Canadian rig count for April 2016 was 41, down 47 from the 88 counted in March 2016 , and down 49 from the 90 counted in April 2015 . The worldwide rig count for April 2016 was 1,424, down 127 from the 1,551 counted in March 2016 , and down 844 from the 2,268 counted in April 2015 .

SPX vs Venus Latitude Cycle @ MIN @ MAX @ 0°

Calculated and charted with Timing Solution.