When Worlds Collide

Published July 29, 2018

When Worlds Collide is a 1951 American Technicolor science fiction film from Paramount Pictures, produced by George Pal, directed by Rudolph Maté, that stars Richard Derr, Barbara Rush, Peter Hansen, and John Hoyt. The film is based on the 1932 science fiction novel of the same name, co-written by Philip Wylie and Edwin Balmer.

The plot concerns the coming destruction of the Earth by a rogue star called Bellus and the desperate efforts to build a space ark to transport a group of men and women to Bellus’ single planet, the Earth-like Zyra.

Plot: The pilot David Randall flies top-secret photographs from the South African astronomer Dr. Emery Bronson to Dr. Cole Hendron in America. Hendron, with the assistance of his daughter Joyce Hendron, confirms their worst fears: Bronson has discovered that a rogue star named Bellus is on a collision course with Earth.

Hendron warns the United Nations that the end of the world is little more than eight months away. He pleads for the construction of “arks” (spaceships) to transport a lucky few to Zyra, the sole planet orbiting Bellus, in the faint hope that the human race can be saved from extinction. Other scientists scoff at his claims, and he receives no support from the delegates to the United Nations.

As the space ark enters Zyra’s atmosphere, the fuel runs out; Randall takes control and glides the spaceship to a rough but safe landing. The crew disembark and find Zyra to be habitable. David Randall and Joyce Hendron walk hand-in-hand down the ramp as a new day dawns over their world. Artificial structures are visible in the distance to the left and right as they leave the ark, suggesting an alien civilization.

Freelance writer Melvin E. Matthews calls the film a “doomsday parable for the nuclear age of the ’50s”. Emory University physics professor Sidney Perkowitz notes that When Worlds Collide is the first in a long list of films where “science wielded by a heroic scientist confronts a catastrophe”. He calls the special effects exceptional.

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Current Trading Position:  -98%

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Primary Trend: Bear Market

Intermediate Term: ~ Seven Sentinels Downtrend, 6-21-18, SPX 2744

~ STS – 7-19-18/10:30 AM – SPX 2808

Tracking Account Valuation 1,724,379 +24% YTD 2018 Vs. SPX +5% YTD – Outperforming SPX By +19%

Trading Position: 35% TZA, 37% SPXU, 22% SQQQ, 5% UVXY, 2% Cash

Trades Today:

STOPS: TZA 7.95, SPXU 33.88, SQQQ 10.88, UVXY 7.85

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ALL TIMES EASTERN – Red Sky in The Morning 

The Complete List Of Trading Rules

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Friday CLOSE:
                  SS            STS          VSTS
Count       1/6          1/6         1/6
 Signal     Down        Down       Down

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On so many levels we cannot imagine a better description of what is occurring in 2018, metaphorically speaking, than our title & theme today. World Stock Markets are refecting this clash of economic and market trends and of the political “world order” in dramatic terms. And that metaphor will only intensify ahead.

2017 was a Secular Bull Market peak year that exceeded even the year 2000 in terms of warnings for markets ahead. We detailed these excesses throughout 2017 and then in this April 1, 2018 article “Rainmaker” we summarized many of the excesses of the 2017 TOP. New all-time records broke the mold and laid down a marker similar, for example, to the 1929 Top in terms of Secular Market Peak. We made these observations:

“Starting with the presidential election in November 2016 and into January 2018, here are just some of the record RED FLAGS that emerged in markets to tell us that we are back at late 1929 or early 1962 or late 1987, 2000, or 2007… all over again:

  1. The highest percentage of new NYSE yearly lows at a new SPX peak in the history of such data on November 14, 2016

  2. In keeping with continued extremely elevated new lows at SPX peaks, we had the highest number of Hindenburg Omens in 2017 EVER

  3. The CBOE “Black Swan” Index (AKA “SKEW”) registered the three highest readings in history in 2017

  4. The most negative readings for net declining minus advancing volume at new SPX peaks occurred in 2017-several times

  5. VIX registered the lowest fear in history several times throughout 2017

  6. The CNN/Money Greed Index at 95 registered its highest greed reading in history

  7.  The NAAIM exposure level of Hedge funds registered its highest commitment in history in 2017:

  8. The Investors Intelligence Bullish Sentiment levels surpassed the unheard of peaks of 1987 in 2017!

  10. Since the dawn of the last century, there has NEVER been a period as long as the current one without so much as a 3% pullback:

And that’s just a small sampling of the red flags and signals the market gave us from November 2016 to January 2018.

All of the above, though, is far less compelling and vital to out trading as the following evidence of what lies ahead as clearly detailed by our own Seven Sentinels. The 2-hour (on SELL), the daily (on SELL) and even the weekly and the monthly modes (on rare but enormously significant SELL Signals)”

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2017 was indeed a remarkable year in so many ways, many of which we detailed above. This last year was a period that we believe set a new standard for comparison for future generations of just that- a market top. But transitions from Bull Cycles to Bear Cycles are not seamless. In the the immortatal words of John, Paul and Georges’ drummer Ringo: “you know it don’t come easy”.

Nobel Laureate Bob Dylan wrote these lyrics about the paradigm shift in the social order of the ’60s:

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin‘.

But 2018 is genuinely a transition year for the ages. On June 10 we published this article, Red Sky In The Morning, about the cataclysm in the ethosphere that is 2018. Echoing Dylan’s lyrics (though unfortunately absent his eloquence), we ended that article by stating:

“Those who stay long when the market turns down will face a category five+ hurricane, and many will not survive at all.” 

We will state the following declarative statement in what we see as descriptive terms- far from empty hyperbole: exiting the next 2-3 years, two classes of traders and investors will primarily remain:

  1. Those who observed that the world order for economies and markets had made a paradigm shift of galactic proportion and understood how to “roll with the punches” and to profit from this change…. and

  2. Those whose accounts had long since been wiped out or become shadows of their former selves in the wake of these developments.

For our part, while your author has degrees in Psychology and Economics, we are not Economists or Psychologists or Sociologists or Political Scientists. We do not try to project the economic, sociological, or political trends and project from that the direction of the S&P 500 or the NASDAQ COMPQ. We learned decades ago that the greatest traders throughout history excelled in their understanding of one thing only: market trends. They aligned their accounts with the prevailing trend and let the market do the rest. And their results have become legendary.

Your author has spent his lifetime studying trends, and has, as a result, developed tools that very effectively define the prevailing trends in real time. We have always believed that “simplicity is genius,” and that our job as traders is NOT to understand and predict the next recession or depression or expansionary period in advance of its appearance. Our job is NOT to predict changes in the world order.

We emulate the greatest traders of all time by directly aligning with the market trend. Full stop.

So why then are we “predicting” a paradigm shift in the social, economic, and financial world order? We aren’t. We are “predicting” nothing. We are tracking those changes via our TREND measures. We monitor and trade those trends on a ten-minute, 2-hour, daily, weekly and even Monthly Basis according to a set of rules we’ve developed in a highly effective manner.

In 2018, the trends are changing more rapidly and extensively than at any time in our lifetimes.

While these two-hour Short-Term Sentinels (STS) drive our trades on an hour-to-hour and day to day basis (we were fully leveraged short at Friday’s close for example):

Here, with our view from 30,000 feet, we see the gigantic shift in the Monthly Sentinels as markets swing sharply from Bull Market to Bear Market:

And this view of the Monthly NYSE Composite is updated through November:

We trade with and only with the Line of Least Resistance via these precisely defined trend measures. Why, what, how, and when we do that is explained in detail in this “members only” article Trading The Line Of Least Resistance from June 12, 2018. But this more general article entitled There Is Only One Trading Rule is an open article available to any who click the link here or at the bottom of our Home Page. It will, if followed, provide trading success to traders who follow its core principle.

As longtime members know and as new subscribers are discovering – we track markets every day, night, and weekend. We continually update and publish in real-time all of these trends. {Look towards the top of this page to see those trends updated through Friday’s close.} We then detail how each trend change impacts our trading, and we make appropriate changes to our tracking account. We report the time and price of those tracking account trades in real time both here at SevenSentinels.com and alert to changes on Twitter so that those watching our Tweet-Stream know when they occur. They can then check them and decide if they want to make any changes in their trading accounts.

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For those who trade with and only with the market trend, all of this, of course, is excellent news. As we said in the “Red Sky” article:

“But here’s the excellent news: when the trend changes, so do we. And there is no more profitable trading market for shorts that a category five hurricane.” We are ultimately heading into a Cat 5 storm the likes of which none of us have witnessed in our lifetimes.

We’ll recap conditions in the morning before the open. Then we will continuously update our Seven Sentinels, STS, and VSTS here as the array at the top of today’s analysis will be updated at least hourly, but also every time a significant or actionable change occurs in real time. We’ll publish signals as they materialize and tracking account trades including time and price as they arise- and alert members on Twitter as these events occur in real time.

 

 

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