COMMENT: Mr. Armstrong; I really do not think the world respects your work. I read on your blog there was going to be a bad flu from Australia that would hit Britain. Then a few days later, the headline here is all about what you forecast. You really have to go public and let people support your work in a meaningful way. The world really does need to listen.

All the best from your former home.

EB

REPLY: I understand. I get a lot of emails on this subject. The world is not ready to understand cycles. All the methods of analysis are generally wrong. All the analysts who try to compete with me do so on an OPINION basis, not methodology. They offer their OPINION and pound their chest. This is not about OPINION. This is about global correlation. We all have opinions and they are never 100% perfect. There have been times my personal “opinion” has been proven wrong by Socrates. This is why I always try to make sure “opinion” is separates from a forecast.

How many times have we heard some food is bad for you and then they reverse it a decade later? The standard method of analysis is always trying to reduce everything to a single cause of action. That methodology is lethal to knowledge and the future. It blocks our advancement in every field of science like Global Warming. Let’s see, it has gotten warmer in the past 25 years so that must be because of cars. They start with that assumption and never test the data before 1850 because there were no cars then. Why bother? We know the cause is cars, they say. So look for data to prove the assumption.

This to me is absurd. You can also say everyone who has ever eaten a carrot had eventually died and that means carrots must be long-term deadly. It was assumed that illness was in the blood. So the logical conclusion was to bleed people. If they died, it was never because they took too much blood, but they did not bleed them soon enough.

I just am tired of beating my head against a brick wall. Society has to break and only then will we look to new dynamic interconnectivity that is the path to understanding. There are those in New York City who just cannot stand what I do. They refuse to consider there is a methodology at issue here and prefer to blame me the messenger claiming I have too much “influence” and that is why they are wrong. They would try to kill me if they could since they tried that one before but I survived. Why admit you may be wrong when you can blame someone else for your failures? That, unfortunately, infects a large part of humanity.

Going public is the only way to preserve this research and push it forward for posterity. I have not changed my mind. We were granted our business license in China. It took three years of investigation and that is by no means an easy accomplishment. So we now have the seal of approval from China and that will be the biggest market the other side of 2032. Now we are getting closer to going public

QUESTION: Marty; At your training seminar you did a couple of year’s ago, you said your pivot numbers will confirm or deny a high. What was the status on the Pivots in the Dow for the close?

PS Another training session would be nice.

GD

ANSWER: The 2006 closing was 12463.15 and the Pivots were 10949.43, 10727.38, and 14234.29. We closed above two and below one leaving the market still bullish looking to higher prices. Then 2007 closed at 13264.82 and now it was below two 13836.74, 10727.38, and 14234.29. The high for that year came in at 14198.10. So we closed under two and above the lowest which indicated it was then turning bearish into 2008.

The 2017 Pivots were 21982.03, 1528.79, and 22282.07 with the closing coming in at 24719.22. Here we closed above all three Pivots indicating it is still long-term bullish. Looking at 2018, the Pivots move to 20202.77, 27434.90 and 28054.53.

We warned back in October 2014: “[W]e are looking at a rally into 2017-2018 with the Dow reaching the 25,000-28,000 level. ”

We can see that we have reached the beginning of our Pivot projections made 10 years ago for this time period. This suggests CAUTION and with our volatility models turning up and a Panic Cycle for 2018, this is not going to be a walk in the park. This will take a lot of skill to trade this one. No emotions and no preconceived expectations. We have to play this by the numbers and cycles – no choice. This is not the time for boasting opinions.

If I have time to do a training session again I will let everyone know. The seat price of $5,000 last time because it is a lot of work and we have to keep the audience in a more intimate session.

Russian President Vladimir Putin is also responding to the Trump Tax Reform. Putin has also taken a step to promote the repatriation of capital from abroad. He is now proposing that only a 13% tax on funds retrieved should be abolished. Additionally, he is proposing that there should once again be an amnesty for Russian companies that bring their cash home.

Russia introduced such immunity for past tax avoidance and foreign exchange offenses back in 2014 when the country faced massive capital outflows. That amnesty had been used very little proving to be ineffective. It expired in mid-2016.

China has responded to global competition that is exploding in the wake of the Trump Tax Reform. While domestic news in the USA continues to bash the tax reform on class warfare, the rest of the world is trying to come to terms with what Trump has set in motion. China’s response is to allow foreign companies complete tax-free business on any profits they reinvest in China upping the stakes. Their position was stated by the Ministry of Finance and it is designed to “foster the growth of foreign investment, improve the quality of foreign investment, and encourage foreign investors to continuously expand their investment in China.” The tax exemption applies retroactively from January 1st, 2017 beating Trump at his own game once more. Foreign companies who have paid taxes in China for 2017 will be refunded.

Domestically, companies in China are already complaining about rising costs that are caused by raising taxes. They have warned that this could lead to production relocations. The standard corporate tax rate is 25% in China. In order to benefit from the newly announced tax rebates, foreign companies have to meet several requirements. These include direct investment in industries promoted by the government in Beijing. Also, the money must flow directly to the companies.

The tax game is now afoot. The big loser will be Europe because they are far more entangled with the socialist agenda than anyone else with New Zealand and Australia fighting for second place in the uncompetitive tax burden race to the top

Talk amongst many traders is that they are so unsure how the new rules and regulations surrounding the implementation of MIFiD II (Markets in Financial Instruments Directive) are to be imposed, that some even said they were keen to extend their holidays until this mess is sorted out. In other words, until they hear that regulators will grant firms a six-month delay for part of the changes about to be implemented for both the company and country, many just do not even know how to conduct business anymore.

The most critical problem surrounding this nightmare is the fact that every trade (with a European Counterpart) will require a LEI (Legal Entity Identifier). This is not such a critical issue for Wall Street Banks since they have already won a 30-month grace period after the SEC requested time to negotiate terms with the EU. Goldman Sachs has installed another of its board members as the top negotiator inside the SEC – Alan Cohen. Goldman Sachs has now three strategic people in the Trump Administration to steer the legislation in their favor both in the USA with restoring Glass Steagall to reduce their competition (Gary Cohen & Steven Mnuchin) and they have now added Alan Cohen, who was their Head of Global Compliance. 

Not all EU countries have come to terms with LEI’s yet so its no surprise a six-month grace period has been awarded just on its eve! The European Securities and Markets Authority on Wednesday proposed the grace period for a requirement that companies wanting to trade with any party based in the European Union will need a code, known as a legal entity identifier, or LEI. The identifying code is important as it lets firms continue to trade from MiFID’s Jan. 3 start date. Industry groups and regulators have been directing firms to register for months, saying: “No LEI, no trade.”

During the six-month grace period of relief, any investment firms may trade with clients under the condition that before providing services, the firm must obtain the necessary documentation to at least apply for an LEI code on its behalf.