Having watched the VIX break the psychological 10 level once again today, it looks comfortable in single digits having digested Fridays NFP’s report. YTD, it remains down around 25% but with volumes so low, we must ask the question – does this indicator still warrant such attention! As traded volumes decrease and market participants walk to the side, we watch a rally that still no-one has especially as we hit record high after record high. This has been the most hated bull market in history and still investors watch the DOW setting records daily.

One of the main reasons the fear cage is at such levels is precisely because people have missed this rally! If you don’t own it – why hedge? The velocity of money is also telling us that we are in a period of deflation and with the misunderstanding of QE only just distorting the picture. Yes, there are scary stories of geopolitical concerns but when the asset bubble is in the bond market, why fear the stock market.

So is the VIX the calm before the storm? We certainly need a good scare to get people convinced they were right all the time and its really a bear market that keeps going higher – you can’t fool them!

QUESTION: Marty; back in the 1980s you would show your proprietary index on the overvaluation of the broad share market filtered in currency and capital flows. You have mentioned it is by no means an overbought market. Can you post an update of that index? You haven’t shown it recently that recall.

I know you said this was your best revenge. They either try to steal your work or ignore you.

Nevertheless, hang in there.

Thank you really for all you do.

See you in Orlando

BP

ANSWER: Yes, here is the index on a monthly basis up to the close of July 2017. We are by no means overbought and we are a VERY VERY VERY VERY long way away still – no matter how nuts that seems to many. We are well below the 1929 highs still.

The historical low in this index took place in August 1981, one month prior to the low in the bonds and the shift from Public to Private investment following the 1929 high. It retested that low in August 1985, one month before the Plaza Accord and the Plateau move we were forecasting back then for the breakout in the US share market.

This index has been correlated to major shifts incredibly often one month leading events. It may be our best index ever created. It has been back tested starting in 1790. It is something I most certainly look at to see where we are historically. So while everyone has been screaming CRASH, this index has stood its ground just saying – sorry boys – just no way.

The historical high took place in December 1928 and then the retest came in August 1929 and failed one month before the major high.

This complex Index is being added to the Global Market Watch for it is time to begin paying attention to this on a daily level.

This year’s WEC (World Economic Conference) is time to address the beginning of the most important event perhaps in our lifetime that stands on the event horizon to begin in 2018. We have nearly reached our second target on the Dow Jones Industrial Index – 23,000. They laughed at our forecast back in 2011 that the Dow would make new highs.  As many people have noticed, if the mainstream media believed our forecast would be true back then, they would have naturally did a follow-up asking why we were right. Since 99% of the world was bearish, they thought our forecast was a joke and impossible.

Nevertheless, that is a very GOOD thing. I grant very few interviews because clients generally do not want to see our forecasts all over the front pages of mainstream media. That will never happen because they have their stable of people they promote and they are looking for people who like to call themselves a guru or prophet. If you have to call yourself that, it proves you are just selling hype to the next sucker. So no worries. The major mainstream media will NEVER report what we do. It goes against the grain.

We have been warning that we are nearing a Phase Transition lift-off. This year’s WEC will focus on what is about to unfold and how to trade this one – because it will be by no means a walk in the park. We are preparing a special report for those who attended Hong Kong & those attending Orlando – HOW TO TRADE A VERTICAL MARKET. You are going to need this one.

We have been moving ever closer to this major event of a Sovereign Debt Crisis which begins next year with the start of the Monetary Crisis Cycle. Governments are clueless as to what is about to unfold. The same is true about 99% of all analysts. Why? You cannot make such forecasts without extremely long databases. You have to see how everything comes together to make these major events in history unfold. That is why most models have at best been back-tested to only 1971. Within the course of history, that is like looking at the last 10 days in the Dow and basing a model only on that slice of time. The obvious conclusion of such a model is the Dow only goes up.

Historically, the majority MUST be wrong for that is the fuel behind the economy and the business cycle. Consequently, the booms and busts cannot be eliminated by government for they react and never prevent anything since they do not understand that they are ALWAYS, and without exception, the primary cause in making the worst economic disasters throughout history. Government will also ALWAYS bite the hand that has feeds it because the object is simply to control the people never properly run the economy for the benefit of all. It historically has ALWAYS come down to a confrontation between the government and the people. Throughout history, there has never been one benevolent government that has EVER surrendered power willingly for the good of the country. That has NEVER happened even once. Power has always had to be ripped from their grasp either by the people, an internal coup, or some foreign invader.

This year’s WEC will focus on the Monetary Crisis Cycle, for now the clock will begin ticking. We have reached almost 23,000 on the Dow – our second target. Will we now reach the third 38,000-42,000 before this is all over?

Seating is limited as always – Ticket Price is $2500

QUESTION:  On Aug. 2 in your blog that you stonily recommend that everyone keep 30 days worth of cash was that just for the Eu?

Thank You

S

ANSWER:  No. Even FDR closed the banks. While bailouts have ceased, the government will simply now expropriate depositors money to save the banks. Keep in mind that the banks sell the government debt call the primary dealers. So no matter what they say, they will protect the banks before the people. The risk is greater in the EU than in the USA. Long-term, keeping cash for expenses will be a wise decision to cover 30 days.

COMMENT: #1: Marty,

Thank you for your recent post on the private blog on July 12^th.

Socrates had identified the week of July 24^th as a key week for a potential high with the two key target areas of resistance at 80.50 and 81.75.

The actual high was 80.62 on July 26^th. I am sure that there are some very happy Canadians trading this market with a recent print today at 78.995.

Again, thank you for all that you are doing and we look forward to the future release of the Trader version of Socrates.

Best regards,

Anonymous…….

COMMENT #2: Mr. Armstrong. You have proven beyond a shadow of a doubt that you have tapped into something very important. Your forecasts on everything pans out and your computer picks turning points astonishingly. No wonder the big boys call upon you. Nobody else can do this. Your latest call on the Canadian dollar has been stunning.

All the best

RK

REPLY: There is a hidden order the computer can see. It is time to stop the opinions. There is a hidden order out there if you are willing to listen and open our eyes

When you impose drastic and excessively high taxes to get the “rich” and their yachts, they just sail away. Saint-Tropez, which was known as the “Billionaire’s Harbor” is just about empty. The yachts sailed off to Italy and Spain abandoning the French Riviera. The local government is pleading with Macron to intervene. They say revenue is already off 30% for boating fees. However, the whole community is feeling it because the “rich” spend money more easily in local restaurants and shops. So the whole economy in South France is dropping very sharply.

In addition, from people I know personally, they have set sail to Portugal to also escape from the refugee madness. It will be interesting to see what happens to the tourism revenue at the end of the summer.