The DJIA peaked out on July 3rd, closing above the psychologically important 17000 mark for the first time in history, and is now reversing course closing below 17K today:
Although I was a little early in calling the peak of Western Civilization in June, it is now starting to appear that the final top is in place. Immediately with this reversal at Dow 17000 there is news of war erupting between Israel and Hamas in the Gaza Strip.
Last week, three kidnapped Israeli teens were found dead and Hamas started hitting southern Israel with rockets. Consequently, earlier today Israel initiated a major military campaign against Gaza, dubbed "Operation Protective Edge", and Hamas has responded with an ongoing, expanded missile barrage against southern Israel that has included strikes on Tel Aviv and Jerusalem. The Israeli Defense Forces (IDF) has called up 40,000 reservists for a possible ground incursion into Gaza in the face of the growing missile onslaught by Hamas.
As has been highlighted in this blog many, many times, reversals from psychologically important thousand marks in key stock indices like the DJIA are often followed by major geopolitical shocks.
Here's three notable historical examples I often cite.
Between 1966 and 1982, the DJIA went up to the psychologically important "Magic 1000" barrier and reversed course multiple times. Each major reversal off Dow 1000 involved significant bear markets with the stock market falling 20%+ five times. Each of these bear markets involved all kinds of negative historical events and trends from the Vietnam War to oil shocks to Watergate. This included the major reversal in the autumn of 1973 associated with that year's Yom Kippur Arab-Israeli War and the subsequent OPEC oil embargo which drove the DJIA down by 40%+ in a year's time and precipitated the worst economic downturn since the Great Depression up to that point.
Likewise, in the summer of 1990 the DJIA reversed from the psychologically important 3000 mark (reaching a closing all-time high that year of 2999.75 on July 16th and July 17th) and fell by 25% by October of that year. This trend reversal took the form of Iraq's invasion of Kuwait, a significant oil-shock and the 1990 Gulf Crisis which pushed the economy into a recession.
A final profound example occurred in the autumn of 2001 when, just after the DJIA reversed below the psychologically important 10000 mark on September 6th of that year, Wall Street broke hard with the 9/11 terror attacks on the World Trade Center towers and Pentagon:
As for the current juncture, not only is the DJIA reversing from the 17000 milestone, the Dow Jones Composite, NYSE index and German DAX are turning down from the 6000, 11000 and 10000 marks, respectively:
Furthermore, this reversal likely comes in the wake of a historically important Grand Supercycle peak according to the Elliott Wave Principle. What I believe constitutes the peak of Western Civilization:
In the wake of this peak, we should expect the collapse of Western Civilization. In fact, the wave patterns that have unfolded indicate that what's most likely to occur is a rapid crash more so than an extended collapse.
What form could this crash take?
Honestly, I wouldn't be surprised if the current conflict between Israel and Hamas is leading up to what I foresaw 20+ years ago in my apocalyptic vision: chemical SCUD missiles slamming into Israel followed by a global nuclear war.
IRAQ SAYS 'TERRORISTS' SEIZE CHEMICAL WEAPONS SITE
Jul. 8, 2014 5:43 PM EDT
UNITED NATIONS (AP) — Iraq has informed the United Nations that the Islamic State extremist group has taken control of a vast former chemical weapons facility northwest of Baghdad where 2,500 chemical rockets filled with the deadly nerve agent sarin or their remnants were stored along with other chemical warfare agents.
Iraq's U.N. Ambassador Mohamed Ali Alhakim said in a letter to U.N. Secretary-General Ban Ki-moon circulated Tuesday that "terrorist" groups entered the Muthanna site June 11 and seized weapons and equipment from the protection force guarding the facility.
He singled out the capture of bunkers 13 and 41 in the sprawling complex, which according to a 2004 U.N. report also contained the toxic agent sodium cyanide, which is a precursor for the chemical warfare agent tabun, and artillery shells contaminated with mustard gas.Islamist Syrian rebels reportedly seize Saddam's CBW Scud missiles in Deir el-Zour - http://toi.sr/14fq7SL via @timesofisrael
Does the Islamic State have a Scud missile? | via @Telegraph http://fw.to/C5Ugvog
ISIS Parades Scud Missile 'Heading Towards Israel' - Middle East - News - Arutz Sheva http://www.israelnationalnews.com/News/News.aspx/182409 …
God have mercy on our souls...
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