First introduced to commodity futures and the financial markets in 1979-80, Eric S. Hadik is a trader and analyst who has been intimately involved with the markets for 40 years. His first introduction to technical analysis came through Fibonacci Mathematics and the Elliott Wave Principle and he began trading in 1982. However, it was not until he discovered the works of W.D. Gann and Gann’s integration of Biblical and natural cycles that Eric knew he had discovered his life’s passion and purpose.
In the 1980s, while trading his own accounts and studying technical analysis, Eric provided technical analysis to – and worked closely with – top level corporate and individual traders for major institutions like BP, Arco, Occidental, Royal-Dutch Shell, Chase Manhattan and Irving Trust and CRT. He also provided his analysis to Engelhard, Handy and Harman, Degussa, Amax Gold, Pegasus Gold, and dozens of smaller and mid-size miners in the US and Canada.
In the early 1990’s, Eric laid the groundwork for what is now INSIIDE Track Trading, dealing with and advising hundreds of individual and corporate traders while writing articles for diverse publications like Gann and Elliott Wave Magazine, Futures Magazine, Cycles Magazine, The Technician and Trader’s World – while also contributing analysis to Barron’s, Investor’s Daily and the Wall Street Journal.
In 1994, Eric founded INSIIDE Track Trading with the expressed goal of teaching and sharing his work with other traders, while informing and educating investors. During the 1990’s, Eric was also a recurring guest on the weekly show ‘Inside Wall Street’ and on CNBC. He continues to share his analysis via INSIIDE Track publications and dozens of podcast interviews.
Erico Tavares: We very much enjoying reading your analysis, and not just for trading signals. You bring together comprehensive long-range series not only on finance but also various aspects of human living that you synthesize in your cycles analysis. Let’s start with a conceptual question. In markets, cycles tend to be ephemeral, but in society do you agree that these tend to be more reliable?
Eric Hadik: Some of that has to do with how you define cycles. When you are talking about social and societal swings or the ebb and flow of emotional extremes, I would agree with your description of them as more reliable.
In the markets, however, I contend that they are also reliable and in many cases predictable. However, my approach to cycles has a lot to do with the specific periodicity or related market moves, turning points, or trend signals, which also tend to be quite reliable.
ET: In your latest monthly report you revisit a striking historical analysis of global disease crises, which occur with stunning regularity, including the present COVID-19. Can you provide some background to that?
EH: In 2006, I did a series of articles on disease cycles and explained how there were a few key cycles that had been rather consistent in timing major flu, viral and/or disease outbreaks, dating back for centuries. Some of those cycles were reiterated in the recent newsletter that you mention. Those cycles included a consistent 10-Year-Cycle (decennial cycle), a solar/sunspot-related cycle, and an equally consistent 17-Year Cycle.
For almost 200 years, the 10-year cycle had timed a recurring series of major flu or virus outbreaks occurring in the final two years of the decade (years ending in ‘8’ or ‘9’) and the first year of the ensuing decade (the ‘0’ year). That 10-Year Cycle had dated back to the Spanish Flu (1918 – 1920), the Asiatic/Russian Flu of 1889 – 1890 and all the way back to 1830, when a series of three major, global pandemics began in China.
That same cycle timed the influenza epidemic of 1928-1929, the Asian Flu (late-1950s) and Hong Kong Flu (late-1960s) as well. That 2006 analysis projected the next major outbreak for 2009-10.
Right on schedule, H1N1 (Swine Flu) broke out in 2009, killing over 550,000 globally (and infecting nearly 61 million in the US) and impacting the world through 2010. The 10-Year Cycle was powerfully validated – projecting a future focus to 2019/2020.
A related cycle, that was also discussed in 2006-09, was the Solar Cycle – with multiple outbreaks also coinciding with the trough of the Solar Cycle. The transition into Solar Cycle 24 took place in December 2008, also pinpointing 2009 as a prime candidate for a disease outbreak.
Throughout history, solar minimums have closely correlated with larger-scale disease outbreaks. So, why would it be that unlikely that smaller-scale solar ‘minimums’- the nadir of each solar cycle when sunspots are sometimes almost non-existent – correspond to a 1-2 year spike in global disease or viral outbreaks?
There are other reasons and supporting evidence that substantiate this hypothesis… and the events of 2009-10 powerfully fulfilled it – and projected a focus to the future low of Solar Cycle 24/25 (ultimately determined to be Dec. 2019) for another outbreak.
In 2014-16, that topic was revisited in multiple articles and issues of INSIIDE Track. (Some of that was reprinted in the latest INSIIDE Track – to which you referred.) The conclusion postulated at that time was that 2018-20 would time the next major global viral outbreak with the greatest synergy of cycles focused on 2019-20.
2019-20 was not just the latest phases of those 10- and 11-year cycles. It was also the next phase of the 17-Year Cycle that had been discussed in 2006, and which had last emerged in 2002-04, with the outbreak of SARS. That 2002-04 outbreak projected the next phase of the 17-Year Cycle to return in 2019-21, exactly when the decennial and solar cycles recurred (synergy is always the most important factor in my research and analysis).
That ~17-Year Cycle also dates back to the Spanish Flu of 1918-20 (102 years from 1918, or 6 phases of the ~17-Year Cycle, project 2020 for a major outbreak) and to the 1830s trio of pandemics, including the following series of outbreaks:
- 1918 – 1920 – Spanish Flu pandemic
- 1936 – 1937 – Influenza epidemic (not as severe and ‘off’ by 1 year)
- 1951 – 1952 – Liverpool Flu outbreak (Liverpool, England, Canada)
- 1968 – 1969 – Hong Kong Flu
- 1985 – 1986 – Taiwan Flu (Influenza B) outbreak
- 2002 – 2004 – SARS
- 2019 – 2021 – Projected Flu/viral outbreak
I have detailed that uncanny 17-Year Cycle for over two decades. It is a cycle that has timed major stock market corrections and crashes, Middle East conflicts, economic recessions and which is intimately linked to the magnetic oscillations and interactions between the Earth and Sun. Here again, the magnetic nature of our bodies (think of EEG and EKG tests that measure these impulses in our bodies) is impacted by the magnetic forces of the Sun and Earth’s relationship. It only takes a slight variation or deviation in our makeup to increase vulnerabilities to disease and other influences.
However, there was one additional synergistic factor impacting this latest phase of that 17-Year Cycle. It overlapped an approximate 100-year cycle of major, global disease pandemics.
They include the 1720 Great Plague of Marseilles (the last major outbreak of bubonic plague in Europe), the 1817 – 1824 Cholera pandemic in Asia (hundreds of thousands killed) and the 1918-20 Spanish Flu that killed 20-50 million worldwide while infecting 500 million.
When discussing the all-important topic of synergy, the 10-Year, 11-Year, 17-Year and 100-Year Cycles all converge at 99 – 102 years, pinpointing 2019-22 as the prime target for at least one major outbreak. It is even possible that more than one pandemic occurs in this period. (Ironically, 2022 is the next phase in an overlapping 10-Year coronavirus cycle that timed SARS in 2002 and MERS in 2012 – both forms of coronavirus.)
ET: You make a link with the solar cycle. How do you know that’s not just a coincidence?
EH: It very well could be a coincidence. However, there is enough anecdotal and scientific evidence to lend credibility to that theory. Again, I go back to the magnetic structure of our bodies, something that many people overlook, ignore or casually dismiss. The solar cycle deals with sunspots and solar storms and the resulting CMEs (coronal mass ejections) that hurl magnetically-charged storms at our planet, resulting in auroras and other manifestations of this activity.
Ironically, it appears our defenses are up when these storms are at their peak (at least based on this cycle and evidence) but then over-relax – or miss out on needed magnetivity – when these storms are almost non-existent. I am not an astronomer or any sort of scientist, so this is just a theory based on observation and centuries of data and anecdotal evidence, as well as analysis from many scientists. That is what cycle study is all about.
ET: In recent years, you have repeatedly described the 40-year cycle and how current stock market action is paralleling the action of 40 years ago. Does that reinforce any of these other cycles? And does that have anything to do with the ‘Perfect Storm’ of bearish signals you described in early-February?
EH: Since early-2018, I have repeatedly explained why so many corroborating factors were leading me to conclude that 2018-22 would possess great similarity to 1978-82 in the stock market. The DJIA has closely adhered to those expectations, with the following examples corroborating this:
In 1978, the DJIA set a 6-9 month bottom in February and then rallied into September/October 1978. In early-October, equity markets reversed lower and dropped sharply (15 – 20%) into/through December 1978.
Forty years later, 2018 saw a similar 6-9 month bottom set in Feb. followed by a rally into September/October 2018. In early-Oct., equity markets reversed lower and dropped sharply (15 – 20%) into/through December 2018.
In 1979, the DJIA rallied – in three distinct waves – throughout the first quarter, peaking in April 1979 and then selling off for a month.
Forty years later, in 2019, the action was similar (not exact, but similar… history rhymes, it does not repeat).
Following that ~month-long sell-off (1979), the DJIA rallied to new intra-year highs into Q3 1979 – ultimately retesting the 1-2 year peak it set in September/October 1978.
In 2019, the DJIA acted similarly – rallying to new intra-year highs into Q3 2019 (after a one-month sell-off) and retesting the peak it set in September/October 2018 as key indicators projected a sharp drop into late-August 2019.
In 1979, the retest of the previous year’s peak resulted in a new 1-2 month sell-off that was similar – but not quite as damaging – as the Q4 1978 decline.
Forty years later, in 2019, expectations were similar – based on a host of other indicators and cycles. Stocks retested their previous year’s high (the September/October 2018 peaks) and were forecast to see a new 1-2 month sell-off. They did that and fulfilled analysis for a 3-6 month bottom in late-August 2019.
That ushered in the most intriguing and potentially ominous parallel to September 1979 – Febuary 1980 – March 1980…
In 1980, the DJIA rallied to new multi-year highs and peaked on February 12/13. It then suffered a sharp 8 – 10% drop into late-February and an overall 20% plunge into March 1980.
Due to an overwhelming collision of bearish cycles and indicators (a Perfect Storm of sell signals described in early-Feb.), February/March 2020 was projected to see something similar – with a myriad of factors projecting a final peak on February 12-17 followed by an initial sharp drop into February 26-28 and an overall plunge into March 2020.
The DJIA rallied to new multi-year highs and peaked on February 12/13, 2020 – exactly when it did 40 years earlier! It then suffered a sharp, initial 8 – 10% drop into late-February while reinforcing the outlook for an overall 20% (or greater) plunge into March 2020. Déjà vu??
It has been incredible how close the market has followed this 40-Year Cycle pattern and how so many other technical indicators have corroborated that at each turn. The most unnerving synergy of sell signals are the ones that emerged on February 7-14 and forecast the “largest decline in the DJIA in at least 6 – 12 months” and potentially longer.
And that could lead to an important low in March 2020, if corresponding technical indicators corroborate that.
The most intriguing aspect is how all of these unrelated or non-correlated cycles and events powerfully corroborate or validate each other.
ET: There was another and potentially devastating cycle that you uncovered related to this analysis: war. What does that have to do with disease? Is there a causal link here?
EH: In so many of these cycles, I view them from the perspective of coincidence, not causality. In other words, I am not speculating that war causes disease or disease causes war (although one could argue that if a nation were hit with a plague and the leader wanted to deflect attention away from his/her failures, its always easy to rally a nation around a common enemy… but I am not postulating that).
Instead, my suspicion is that there is a greater, overarching factor that is causing both war and disease. In that case, they are both the symptoms – not the cause or root of the cycle. They are merely a manifestation of it. I have done a series of reports on these war cycles that I would be happy to provide to any of your readers that request them from us.
ET: But can this be possible in the nuclear age? There’s a dangerous confrontation going on in Northern Syria right now, with Turkey finally overtly taking on the Assad regime which is being backed by Russia. But how would that unfold given the nuclear consequences of an open conflagration between these parties?
EH: It is difficult to think too seriously about a possible war, given how quickly one could escalate out of control and become unfathomable in its scope. However, as I have documented separately, there is a consistent 80-year cycle of war that dates back over 500 years. The more recent phases have been precise in America’s major battles beginning with the culmination of the Revolutionary War (1781) to the beginning of the Civil War (1861) to America’s entry into World War II (1941). The next phase of that cycle is in 2021.
There are also an eerie convergence (collision) of Middle East cycles that point to an impending period for major upheaval. So, this cycle of war fits right in the midst of all that.
ET: One market that is often strongly correlated to potential upheaval like this is gold. But your work keeps forecasting an important top for gold in early-March. Doesn’t this seem incongruous? What do you see unfolding in precious metals as we move forward?
EH: Since early-2019, my focus has been on early-March 2020 for the next multi-month peak in gold. I published multiple articles throughout 2019, detailing this uncanny web of cycles that includes a ~12.5 month cycle that last timed the February 2019 peak, January 2018 peak, the December 2016 low and the November 2015 bottom. That creates a textbook Cycle Progression pattern that projects a subsequent peak for early-March 2020. In this case, it is a ~12.5 month low-low-high-high-(high) Cycle Progression – and that projects a future peak for ~April 2021.1
That ~12.5 month (~54 weeks) cycle has also broken down into a ~27-week, ~14-week and even ~7-week cycle – all of which projected sharp advances into late-February/early-March 2020 followed by sharp sell-offs – in gold but even more so in Silver and the XAU – into April 2020. There is a lot more to it than that, which has been detailed in multiple reports available to new subscribers. The bottom line is that gold should be setting a major peak in early-March, regardless of how that correlates to disease cycles and expectations for a Feb./March plunge in equity prices around the globe.
ET: Europe seems to be particularly vulnerable to all these developments, facing some very difficult demographic, financial and social challenges. How do you see all this play out there?
EH: One of the aspects of this time period I have discussed for about 15 years. It involves what I refer to as a cycle of reunification in Europe, also culminating in 2021. (A similar cycle impacts the Middle East/Arab nations and also recurs in 2021.) As I have explained many times before, unification often comes on the heels of great disunity or near dissolution of unity… with Europe needing to approach the ‘edge of an abyss’ – either economically or geopolitically – before a reunification would be most likely. Events like Brexit, and several related referendums in recent years, provided convincing precursors to this expectation.
They seem to be more vulnerable from a financial perspective, so my financial and equity outlook for 2020-22 could have a greater impact on Europe than the US.
ET: Thank you very much for your insights and analysis, Eric. Where can people find out more about your work?
EH: They can visit our website at insiidetracktrading.com to learn more about all our services. A library of archived articles and reports can also be found at our second site, 40yearcycle.com. We have also been posting most of the short-term analysis – from January and February 2020 – outlining the market analysis for Q1 2020, a potentially momentous period.
ET: That’s great. All the best
EH: And to you as well.
Authored by Erico Matias Tavares. Link to recent articles.
- See https://www.insiidetracktrading.com/hadiks-cycle-progression/ for related explanation on this indicator.