Trading Against the Reversals


COMMENT: So guess what. I’ve always played the gaps when one elects and it’s a decent size and it lines up with the arrays and technicals I’ll get in and sell at the touch of the next reversal after the gap. Easy. But last month for the first time I tried trading against the reversal and it worked out amazingly. There was a quadruple bullish reversal in Cisco and a direction change the week and month after and I shorted it a few cents away from that reversal and basically got the high in a very strong uptrend. AM even thought I was crazy shorting it. The very next day it started falling and fell straight to the last major weekly yesterday.

Maybe not “Marty” type amazing trade, but I saw it unfolding the way Socrates said and I thought Damn haha

First time against a reversal!!! And a quadruple at that. Wanted to share that with you.

REPLY: Excellent. That was a good trade. Notice the energy. It peaked well before, so as the market is making new highs and failing to get through the reversals, look at the energy. If you see divergence and the stochastic, the odds are in your favor.

The divergences in those two indicators with the Array and the Reversal System allows for low-risk trades. Always know where you are wrong on a trade. In that case, the other side of the Reversals you are selling against. The declining energy with a rising market warns that the rally is not sustainable.

 

Decline in Craftsmanship Between the 1st and 3rd Centuries


COMMENT: I took the tour of the Vatican museum and the sculpture collection is unsurpassed. It was great that a pope told the people to bring statues to the Vatican rather than destroy them as some pagan god. The guide also pointed out how the best art was the first century and the quality diminished into the third and fourth century. I remember the mug from the WEC. It was interesting how the quality of art declined following your chart on the collapse of the monetary system.

I can get an extra mug?

KW

ANSWER: Yes, several people took that same tour. The quality of art declined with the collapse of the monetary system as well as the artistic quality of coins. Each die was hand engraved back then, so you can also see the decline in craftsmanship. Sculptures are the same. The details in the face, hair, and clothing during the 1st century is easily distinguishable from the 3rd century as we see in the coinage.

The quality of craftsmanship declines with the economy. Buildings constructed today are far cheaper in construction materials than you see even decades before. Most historians claim that Emperor Augustus’ right-hand man, Agrippa, built the first Pantheon in 27 BC. It burned in the great fire of 80 AD, was rebuilt by Emperor Domitian, and then was struck by lightning and burned again in 110 AD. The Pantheon as we know it today was built in 120 AD by Emperor Hadrian who was passionate about architecture and design. The inscription states that it was attributed to Marcus Agrippa. Nevertheless, this is a building that has stood almost 2,000 years.

As for the mugs, sorry, they are all gone. People have been making collections of them. Even I have only have one myself. I didn’t even have any leftover to give to Nigel.

Malcolm Gladwell: The strange tale of the Norden bombsight


Published on Oct 26, 2011

http://www.ted.com Master storyteller Malcolm Gladwell tells the tale of the Norden bombsight, a groundbreaking piece of World War II technology with a deeply unexpected result. TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes. Featured speakers have included Al Gore on climate change, Philippe Starck on design, Jill Bolte Taylor on observing her own stroke, Nicholas Negroponte on One Laptop per Child, Jane Goodall on chimpanzees, Bill Gates on malaria and mosquitoes, Pattie Maes on the “Sixth Sense” wearable tech, and “Lost” producer JJ Abrams on the allure of mystery. TED stands for Technology, Entertainment, Design, and TEDTalks cover these topics as well as science, business, development and the arts. Closed captions and translated subtitles in a variety of languages are now available on TED.com, at http://www.ted.com/translat

A Strong US Dollar is the Only Way to Create Change


COMMENT: It is interesting how these people take your interviews and inject headlines like you say the dollar will collapse in April 2019 when you have said exactly the opposite. Just unbelievable how these people use your name to promote their BS.

JD

REPLY: I know. They keep preaching the dollar will collapse when it is exactly the opposite. They are trying to sell their biased view which is always based upon the idea of the quantity theory of money – the same exact philosophy used by the central banks in Quantitative Easing.

The ONLY way the monetary system will break is with a STRONG dollar – not a weak dollar.The monetary system has broke ONLY when the dollar rises as in 1934 and 1985. The US always wants a weak dollar to increase corporate profits and and create a trade surplus. It is really quite amazing how these people keep preaching the same nonsense for decades and have never been right for more than 30 years.

The Moment in Time: The Manhattan Project


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The Moment in Time documents the uncertain days of the beginning of World War II when it was feared the Nazis were developing the atomic bomb. The history of the bomb’s development is traced through recollections of those who worked on what was known as “the gadget”. [6/2000] [Science] [Show ID: 5090]

4th Generation Nuclear Weapons


Published on Dec 16, 2013

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This is an overview of the 4th generation of nuclear weapons outlined in the report, Fourth Generation Nuclear Weapons: Military effectiveness and collateral effects, condensed into an easy to digest video. Full report click here, http://arxiv.org/abs/physics/0510071v5 FAQ:
Q: In a nutshell what is a Fourth Generation Nuclear Weapon (FGNW)? A: It is a nuclear fusion weapon that doesn’t use a fission trigger. The most feasible method to trigger fusion in a FGNW is to use microscopic amounts of anti-matter.
Q: What advantages do FGNWs have over conventional nukes? A: They are “clean” (radioactive fallout negligible, about on par with conventional depleted uranium weapons that are already in use), they are very small (potentially can fit in your pocket), and fill in the “yield gap” between the most powerful conventional weapons and the lowest yield conventional nukes.
Q: Will FGNWs really be more politically acceptable to use in actual combat? A: Who knows? Only time can tell for certain, but their “radioactive cleanness” is a compelling argument in favor for it.
Q: What would be the TNT equivalent of a FGNW be? A: A 3 gram pellet of fusion fuel would release around 302 gigajoules of energy (about 72 tons of TNT), so around that.
Q: How much antimatter is needed to catalyze a single FGNW? A: A 3 gram pellet of fusion fuel would need 1×10^11 antiprotons to catalyze nuclear fusion
Q: Isn’t carrying antimatter dangerous? What would happen if containment failed? A: The quantity of antimatter is extremely small. 1×10^11 antiprotons would release the equivalent of about 6 milligrams of TNT, that’s less than a firecracker. However the energy would be released in the form of ionizing radiation so it would be a radiological hazard if containment failed.
Q: Wouldn’t failure of antimatter containment result in the FGNW detonating? A: No, nuclear fusion requires very precise injection of antimatter to catalyze fusion. Failure of containment would not result in the precise injection of antimatter to the fusion fuel. Added safety measures can be taken by separating the fusion fuel from the antimatter containment until the weapon is ready to be armed.
Q: If you accidentally drop it, wouldn’t containment fail? A: These weapons are intended to be incredibly rugged with one of their applications being bunker busters. They contain little to no moving parts and are “full like eggs”. The FGNW report indicates that the overall ruggedness would be far superior over conventional nuclear bunker busters so no, simply dropping it wouldn’t cause containment to fail.
Q: Wouldn’t FGNWs be attractive for nuclear terrorism? A: No, it’s easier to build conventional nuclear weapons. FGNWs require extremely large particle accelerators to manufacture the antimatter necessary for the FGNW. A terrorist who wants a suitcase nuke is better off with something like the M-388 Davy Crockett.
Q: Are FGNW a proliferation concern? A: No, see above.
Q: Why not make pure anti-matter weapons instead? A: A couple of reasons. It’s prohibitively expensive. It’s single handedly the most expensive substance in the world and incredibly difficult to make. Right now, if we took all the antimatter we produced and annihilate it, it would only be enough to power a lightbulb for a few hours. On the other hand, fusion fuel is incredibly cheap and abundant, you can literally make it from sea water as all it is are isotopes of hydrogen. But even if we had large quantities of antimatter, it’s questionable how useful it would be as a weapon on its own. It’s incredibly difficult to contain as if it touches any normal matter, it will annihilate. Containing microscopic quantities is not a problem, but macroscopic quantities are. Even if you could contain it, it would be incredibly unstable. Fusion and fission weapons fail safely, if you damage a nuclear weapon the nuclear weapon doesn’t detonate. An antimatter weapon would detonate as soon as containment fails. From a cost-benefit point of view, pure antimatter weapons do not make sense.
Q: Can you use conventional explosives to catalyze nuclear fusion? A: No. https://en.wikipedia.org/wiki/Lawson_…

 

Cycles & Turning Points


QUESTION:

Hello Mr. Armstrong;

Rome was fantastic!. I find it very interesting that you hold the conference on the dates when the markets hit their peak and I come back and Monday we start the decline that you cautioned us that we could see at the conference. Was this planned:)?

Cycles are amazing and now i have to live and invest only based on the cycles.

Thank you again for Rome and bringing Nigel!!

BB

ANSWER: Yes, I do time the conferences around the cycles. That gives us something to talk about. They are simply points where the human emotions shift. This pull back is necessary for we are treading water (i.e. time) until the consolidation is complete in order to produce the next phase.

Just for the record for those who did not attend the Rome WEC, Nigel came because, as he put it, we are the “alternative to Davos.” He was not paid a fee. He had agreed to come and wanted to attend the conference and be at our famous networking cocktail party.

As things turned out, Nigel started his new BREXIT Party after he agreed to come to the WEC. I was concerned he would be too busy to attend with the change in plans. Nevertheless, he flew in for a few hours to make his appearance and then sadly had to leave because of a rally back in the UK the next morning.

The May Turning Point


COMMENT: It is interesting how your model picks the timing for a turn in the market as of May yet it leaves us guessing as to what the fundamental will be. Very interesting to say the least.

Fantastic event in Rome. The cocktail party was the best view of Rome ever!

Cheers

HKD

REPLY: The fundamentals really do not matter. What I have come to understand is TIME is everything. The market will turn on these targets regardless of the fundamental. It is simply a turning point in human emotion for maintaining a given trend. They will exit a trend regardless of the news. How many times have we seen bearish news ignored in a bull run or bullish news ignored during a bearish decline? It is only a matter of the length of a rally or decline.

Robo Trading v Human Trading


QUESTION: So is there any difference between a Robot and a person trading if they just follow the same system on a single market?

ANSWER: Any system that is created which claims to be some robo-trading system is vulnerable to a contagion that impacts a given market from external sources. We are entering a highly correlated global capital flow era which events external to a domestic market can overwhelm a domestic economy and any market.

The only difference between a robo-trading system and a human is that the human can get all emotion and panic. The computer would not do that, but it would be vulnerable to external forces and would not be able to make a judgment call.

The only possible way to overcome this is a complete global model which is monitoring everything and will pick up the external contagions. You can visually see this using the Global Market Watch. You can glance at the trends in all world stock markets for example on one page.

The End of Diversification?


Recent years there has been a shift in how various assets classes are trading. There is emerging a high degree of positive correlation among various financial asset classes that have many concerned since it is not conforming with the perceived historic norms. Many are reading into this as a warning of what is to come. When different asset classes move in the same direction simultaneously, this obviously eliminates the theory of diversification is asset allocation.

Asset allocation over the years has been the way portfolios are arranged because they lack the ability to forecast the major trends. The belief has been that the possible benefits of diversification across classes reduces risk and offers a management tool knowing that you will lose on one side but win on another class.

When there is a high correlation between classes, these asset allocation models fail. The concerns become that this injects a negative development because they fear if one asset class falls, it will take all of the others with it.

What is being overlooked here is the fact that there is a major shift underway which is not understood and this creates the risk of a LIQUIDITY CONTAGION whereby a loss in one asset class causes liquidation in all others to raise cash to cover the losses in one particular asset class. Welcome to the new age of international contagion which is far more serious and cannot be reduced by simply diversification.

We will be looking at establishing a Webinar for Institutional Clients on this subject matte