Larry Williams

Forecast 2019

Larry Williams' 14th Annual

Market Analysis and Forecast Predictions

December 2018
Forecast 2019

Forecast Road Maps

US Stock Market Analysis 3
Presidential Clout 28
Major Markets of the World 30
US Treasury Bonds 35
Precious Metals 37
Energy Markets 40
Currencies 44
Softs 49
Meats 54
Grains 57
Select Stocks 62
Closing Comments 69
Disclaimer 71

IMPORTANT: The risk of loss in trading futures, options, cash currencies and
other leveraged transaction products can be substantial. Therefore only “risk capital”
should be used. Futures, options, cash currencies and other leveraged transaction
products are not suitable investments for everyone. The valuation of futures, op-
tions, cash currencies and other leveraged transaction products may fluctuate and
as a result clients may lose more than the amount originally invested and may also
have to pay more later. Consider your financial condition before deciding to invest
or trade.

Copyright 2018 LNL Publishing, LLC. All Rights Reserved.

US Market Analysis

The founder of the US banking system was Alexander

Hamilton, fellow St Croix resident. Our goal is to be
as prescient as he was.
 The Terrible 9 Years
Under the Microscope
Years ending in 9 have not fared well for stock prices. I’m certain you are
already thinking of perhaps 1939, 1969, and we will never forget 1929.
In 1969 and 1929 investors were punished beyond belief. 1999 saw a 1,500 point decline in
the Dow, while 1979 saw a huge trading affair with a break in October that made new lows
for the year. Will shades of this happen again in 2019?

One thing for certain is you can bet your bullish boots the Bear Camp will be touting 2019
as the year of reckoning. In part because the negative pattern of years ending in the number
9, the last year of a decade.

Fortunately, this bearish view is just one side of the coin. 1909 and 1919 were very bullish
years, as were 1949 and 1959. Bulls prevailed in 1989. The debacle of 1929 was more than
offset by 2009, one of the strongest bull markets ever recorded. With that in mind lets take
a look at the historical pattern of all years ending in 9, since 1909, added together to see if
we can get a glimpse of the future.

Our first chart shows that average, but not detrended. It is just the average pattern. Despite
1929, the overall average for these years has been positive!

Chart 1: DJIA Years Ending in Nine

Now, let’s remove 1929 - clearly an outlier - to see what the true picture of those years

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might be ,and what it suggests for the 2019.

Chart 2: DJIA Years Ending in Nine Excluding 1929

Well, would you look at this! Taking out 1929 gives a most optimistic view to these years.
The above patterns are arrived at with no de-trending of the data. Detrending, in theory,
removes the bias of trend and helps us to see when cyclical highs and lows took place.

Our next chart shows the pattern of these 9 years (1929 excluded), detrended. What we see
is the dreaded 9 years are not all that bad. In fact they have often produced bull markets.

Chart 3: DJIA Years Ending in Nine Detrended

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The detrended pattern tells us to be on the lookout for very good rallies to begin at the first
of March, middle of June, and November in 2019.

To get an idea of how to use this idea let’s take a look at how 2018 traded against the
detrended average of all years ending in eight.

Chart 4: DJIA Years Ending in Eight Detrended

That was then. This is now, and welcome to the Federal Re-
serve
There was no Federal reserve in the early part of the last century. As I see it, they began
exerting their many powers around 1950. So I like to bifurcate the data at that point in
time.

This next chart shows the pattern of all 9 years from 1949 forward with trend and then
detrended.

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 Chart 5: DJIA Years Ending in Nine 1949 Foreward with Trend

Chart 6: DJIA Years Ending in Nine 1949 Foreward Detrended

The pattern tells us to look for a buying opportunity at the end of February, a pull back in
May with a buy point in June. Then expect a late August sell off and early October buy for
an end of the year rally.

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 Speaking of The Fed, Let’s See What They
Have To Say…
My operating rule of long-term market analysis is that market bottoms are best identified
with technical tools, market tops with fundamental tools.

Year after year, technical analysts call for bear markets that never develop. As I see it, bear
markets begin when companies stop making money; hence cuts in dividends, expansion
and research. This happens because consumers stop buying stuff.

Consumers stop buying stuff when they lose jobs or faith in the future.

Chart 7: Consumer Index

There are two tools that help us understand when this condition is most apt to appear. I will
be sharing these with you now - these are your bonus “private links” - the web site URLs so
you can use these in the future and beyond this report.

The University of Michigan publishes a consumer sentiment survey as shown in Chart 7.

Each and every recession has been foreshadowed by the sentiment index topping out, then
declining (see red lines). Currently consumer confidence has been steadily increasing.

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Hence, this model says it’s not yet time for a bear market.

http://www.sca.isr.umich.edu/charts.html

My favorite simple tool to forecast recessions is the unemployment rate. When people start
to lose jobs they stop buying stuff, and corporate earnings/profits follow suit.

Chart 8: Unemployment Rate

The record is clear. When unemployment starts to increase, the monthly number rises, and
stays above its 12-month moving average, a market top is close by. This gauge does not call
market bottoms. Technical tools do that.

We have good news here. Unemployment is still declining. No bear market in sight.

How about the massive debt we are facing?

I get this question at almost every social event I attend. With debt at 103% of Gross
Domestic Product just how much longer can the game go on before a collapse? Our next
chart looks at debt as a percent of real interest rates and the growth rate of GDP.

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 Chart 9: The Cost of Servicing Debt

https://fredblog.stlouisfed.org/2018/11/how-expensive-is-it-to-service-the-national-debt/

What I see is that recessions are sometimes signaled when this index starts to rise, exactly
the opposite of what is taking place now.

Here is what the Fed has to say:

“The U.S. federal debt has been rising steadily since the Great Recession and is currently 103
percent of GDP. So, let’s enlist FRED to help us study the sustainability of this debt by looking
at how much it costs to service it.

The graph plots this measure of the cost of servicing the debt. (Here, the growth rate of real
GDP is the sum of real GPD per capita growth and population growth, and the real interest
rate is the difference between the interest rate on a 10-year Treasury bond and the CPI
inflation rate.)

The graph presents an interesting picture. In the years since the Great Recession, the cost of
servicing public debt has been negative, which means that the burden of U.S. public debt is
low. Since 1960, negative debt servicing costs have occurred nearly 63 percent of the time; and

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the average cost of servicing debt is -0.67%. In fact, since the 1960s, the only time period in
which the real interest rate was consistently greater than the growth rate of real GDP was from
1981 to 1995.”

The take away point is if US income increases more rapidly than interest payments on U.S.
debt, there shouldn’t be a major burden. Debt is always a burden. But that burden needs to
be placed into the perspective of the earning power to pay it off. On that basis there are no
red lights flashing… yet.

Going Bonkers Over The Yield Curve

Interest Rates as a Predictor of Recessions

There has been a great deal of banter in late 2018 about the yield curve, increasing interest
rates and the effect this will have on the economy. The New York Times front paged how
the curve was saying a crash is due; like now!

I’d like to put that into perspective by sharing with you a long-term chart showing the
treasury spread versus when recessions have unfolded.

Chart 10: Treasury Spread vs Recessions

https://www.newyorkfed.org/research/capital_markets/ycfaq.html
I have marked off with the red horizontal line what seems to be the tipping point. When the
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spread gets to about 0.3, we have been at or close to the start of recessions. So far, we are
not close, indicating there has not yet been enough pressures in the interest rate market to
cause serious damage to the stock market.

I have provided a link to the New York Fed so you can continue to follow this indicator on
your own… Refer to it whenever you hear the purveyors of pessimism talking about how
dangerous the yield curve is. Clearly there is a point when it will spell danger, but based on
the historical record that is not now.

A study of when the curve goes negative shows that it is actually… bullish. Just going
negative has never kicked off a recession/bear market. Never, ever. What begins the bear
wave of selling is when the curve—after turning negative—then turns back up.

Chart 11: Yield Curve

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Recession Probability Index

Chart 12: Recession Probability Index

Our next chart shows the recession

probability index created by Jeremy
Piger at my alma mater, the University
of Oregon. This is an index that has
been widely followed by the Federal
Reserve to the point that they even
publish it on their website. It clearly
does a good job of forecasting
recessions.

But, looking at Chart 12 it’s hard to see

what has been going on recently due
to the scale. Typically, recessions begin
when the index rises above 10. The next chart shows an “up close and personal” view, so
you can see what the current readings have been with a little more clarity.

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 Chart 13: Recession Probability Index 2012 - 2018

https://fredblog.stlouisfed.org/?s=recession+index

What we see is that in late 2018 the indicator is still a long way from the dangerous
threshold. As with all of these indicators, they need to be monitored. However, there is no
indication, at this time, that we are approaching a recession which should mean a major
bear market is not about to unfold.

Aruba-Diebold
My second favorite indicator for predicting recessions is the Aruba-Diebold indicator
which can be followed on the Philadelphia Federal Reserve website. This index is
interesting because it is a measure of real business conditions, seasonally adjusted,
with a look at monthly payroll employment, industrial production, personal income,
manufacturing, trade sales and quarterly real GDP

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 Chart 14: Aruba-Diebold
Typically, recessions and bear markets begin when this indicator drops to the -1.0 level, as
I’ve marked off with the red line. As you can see, we are not even close… another sign that
we are not about to enter a recession.

Finally, if you don’t take my word for any of this, you might want to refer to the Livingston
Survey, the longest ongoing survey to forecast recessions. This is a survey of informed
money forecast by large banks and financial institutions. Below is a link to the survey
as well as the forecast they made at the first of 2018 which, in hindsight, were spot on
accurate.

No charts for this index, but always good reading to get an economic view of the future.

https://www.philadelphiafed.org/-/media/research-and-data/real-time-center/livingston-
survey/2018/livdec18.pdf

• Forecasters Predict 2.4% Growth rate for 2019

• Forecasters Predict Declining Inflation (2.3%) for 2019
• Forecasters Predict 3.7% Unemployment rate for 2019
• Stronger outlook for Short Term rates, weaker for Long Term Rates

I keep a host of economic indicators to protect you and me from a bear market. If we get
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a sell signal from the panoply of data, we will issue a special bulletin free of any charge.
Below are the past recession signal dates.

Sell Signals Record:

March 1966
December 1968
February 1973
October 1976
September 1987
June 1990
July 2000
December 2007

P/E Formula Suggests Normal Rates of Returns

“My stock market students know how to forecast the projected rate of return for the Dow
30 based on our 10.46 formula.

The formula, using the current 21.44 Dow Jones P/E ratio, tells us the expected return
for stocks over the next 12 months should be an 8.45% return. That’s 2.01% LESS THAN
AVERAGE. This is not good. Price has outpaced earnings. The historical lesson is stocks
have trouble moving up under this cloud.

In a moment you will see how cycles back up this slowdown in the bull market.”

All that was from last years report! As this is written the P/E ratio is 18.66, telling us stocks
have declined to a value level as the expected rate of return is now 10.03. That is close to the
average rate of 10.46. Low P/E ratios are the hallmark of bull markets..

W.D. Gann, Mystic, Master Or Just An Overactive

Mind With Charts?

Each year the legend of W.D. Gann continues to grow, as does the number of services who
claim they are the only one that have the keys to understand the codes he left behind.

One of his forecasting tools he dubbed his “Mass Pressure Index”. It appears to be the
average of the last 10, 20, 30, 40, 60 and 80 years. I’ve studied all these forecasts back to the
1900’s. Some are good. Some are not so hot, as we showed in last year’s forecast.

Here was the Mass Pressure Index Forecast for 2018.

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 Chart 15: DJIA 2018 Pressure Index Forecast

Next, I’m pleased to show you the Mass Pressure Index Forecast for 2019.

Chart 16: DJIA 2019 Pressure Index Forecast

Martin Armstrong, possibly today’s W.D. Gann, has placed emphasis on the 7-year cycle.
Here is what it called for 2018.

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 Chart 17: DJIA 7 Year Cycle
I rate this as not impressive.

What has been consistently impressive in calling market lows is the chart I showed in
these annual forecasts back in 2008, depicting the 65-week cycle and 2-year pattern on
momentum. For new readers I’m showing it from 2002 forward.

Chart 18: DJIA 65-Week Cycle With 2 Year Pattern

The red cycle line projects when we should see important market lows while the blue line
tells us when stocks should be in tight and strong trend up/down moves.

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 Chart 19: DJIA 65-Week Cycle With 2 Year Pattern
In terms of cycle forecasts, as they say, “I’ve seen a thing or two, so I know a thing or two”,
and of the forecasts made in 2008 this has been the most consistent. Thus, we’d better look
at what the message is for 2019.

Here it is, the projection for 2019 and into 2020.

Chart 20: DJIA 65-Week Cycle With 2 Year Pattern

The cycle is telling us to expect a low the end of June. As you’ve seen from a study of the
charts this is not an indicator that calls the exact turns. It does give us an excellent idea of

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when we’re going to have significant up moves in the market. What it is telling us is…there
is a large up move coming in the late June time frame. I expect a very good buy point at the
end of June/first week of July. My forecast for momentum speaks to a strong market at the
first of 2019 then tapering off.

About October 9, 2020, the 65-week cycle and momentum turn up once more. That will be
the start of a very strong bull market uplift.

2019 Forecast Background

To arrive at the 2019 forecast I noted several cyclic influences we need to pay attention
to. The first is the striking parallel between 1994 and 2018 which suggests to me 1995 will
influence 2019.

Let’s take a look at the price pattern of 1994 in red on the following chart, overlaid against
2018.

Chart 21: DJIA 1994 Price Pattern Over 2018

The parallel is remarkable. What happened 24 year ago was repeated this year. Is this
happenstance? Perhaps. Yet, 2017 looks remarkably similar to 1993. See for yourself in the
next chart.

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 Chart 22: DJIA 1993 Price Pattern Over 2017

I expect the pattern will repeat, at least in part. So we will want to pay close attention to the
price pattern seen in 1995 as a road map for 2019. Here is that projection…a look at 1995
twenty four years later as an influence on stock prices.

Chart 23: DJIA 1995 Price Pattern Projection For 2019

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What Cycles Say
I absolutely believe in cycles. They are an excellent trailhead (when used correctly) to
forecast the “when of a move”, but not the “how much”.

Last Year

Last year’s readers will recall our cycle forecast based on what was then the most dominate
cycle; 150 days.

Here it is again, just as shown

last year (Chart 36 in Forecast
2018 Report).

Chart 24: 150 Day Cycle 2017-2019

Was the forecast of any value? I’ll let you decide that from the next chart that shows how
the forecast came out in real time.

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 Chart 25: 150 Day Cycle Projection Over 2018 DJIA Prices

Cycles are shifty little devils that can be as fickle as teenagers. I am often
reminded of the Jim Reeves song:

“The Shifting Whispering Sands”

I discovered the valley of the shifting whispering sands

While prospecting for gold in one of our western states.
I sat down and buried my face in my hands and resting thus
I learnt the secret of the shifting whispering sands.

It is whisp’ring softly whisp’ring

As it slowly moves along
And for those who stop and listen
It will sing this mournful song

Over the last 50 years the most reliable long-term cycle has been 39-42 months. This cycle
was widely written about by Edgar Dewey at the Foundation for Cycles back in the 1950’s.

Speaking of which, the Foundation is being brought back to life as a legitimate and
respectable study group, as it was under Dewey.

The next chart take us back to 1959 to show you how dominant this cycle has been in
calling market lows.

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Chart 26: DJIA 39-42 Month Cycle 1959 to 1970

Chart 27: DJIA 39-42 Month Cycle 1970 to 1980

Chart 28: DJIA 39-42 Month Cycle 1980 to 1990

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 Chart 29: DJIA 39-42 Month Cycle 1990 to 2000

Chart 30: DJIA 39-42 Month Cycle 2000 to 2011

You have seen the past performance of this cycle, so lets look at what it portends for the
future.

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 Chart 31: DJIA 39-42 Month Cycle 2011 to 2020

Look at that! This coming year gives us a 39-42 month cycle low in late March. With that
in mind I’d like to show you the shorter-term cycles for 2019 on the market we primarily
trade, the S&P 500 E-Minis.

2019 Stock Market Forecast

The following chart shows the major cycle trend for the year in red. Overlaid in blue you
will see the shorter-term cycle projections for turning points. I am using Timing Solution
software to create these charts.

Chart 32: 2019 US Stock Market Forecast

I have also posted dates when we can expect the turns to take place. The middle of March
looks very bullish. Going out on a limb, I think the low for the year will be seen on March
26th.
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Keep in mind that in data (like the stock market that has a continual upward bias) the
cyclical highs will not have as much impact on the trend of the underlying data. The
cyclical highs tell us that’s when to expect trading ranges or a stop in upside momentum.

If, of course, fundamentals are bearish at the same time a cyclical high is expected, a bear
market will unfold.

If you believe in cycles, then believe 2019 will be a bullish year.

Forecasting Times of Trouble

When stocks go down, all of the various volatility indexes rally. Thus, it seems to me if we
can find the cycles in volatility spikes, we can have a clear and early view of when the next
market slides can be expected. Our chart below depicts the active cycles I found in the Vix
Index and a projection for 2019.

Chart 33: 2019 Volalitliy Cycle Forecast

Based on this notion, volatility should spike and stocks sell off into the middle of
September, setting up a buy point.

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 Presidential Clout Trading Strategy
The Presidential Clout trading strategy is one we introduced several years ago for the S&P
500 E-minis, and it has continued producing great results for our forecast readers. Here
are the results for 2018 going back the last 8 years. In 2018 the strategy had 34 trades with
almost 80% accuracy.

Buy Signal Rules

1. For this rule we must be in an uptrend. That means today’s 200 day moving average
is greater than it was three days ago. If that condition is true, we will buy tomorrow if
tomorrow is Trading Day of the Year 21, 64, 100, 213, 220, 233, 236 or 254 and we are not
in the month of May.

2. For this rule we require today to be an outside day. That’s a day with a higher high and
lower low than the prior day’s high and low. The outside day must close less than the prior
day’s low and the prior day’s low must have closed less than the low of the day before that.
Take this trade on all days but Monday. The entry is to buy tomorrow on the open.

3. This is an October trade. If it is October and tomorrow is the 3rd trading day left in
October, we will buy on the opening tomorrow.

4. This is a November trade. We will buy on the opening tomorrow if it is a Tuesday and the
trading day of the month is less than six.

5. Here is another trend filtered rule. If the 200 day moving average is greater than three
days ago, today was not an outside bar with an up close, tomorrow is not Friday or Tuesday,
and the trading day of the month is not trading day four or seven... we then buy on the
opening tomorrow if it is the 2nd, 10th, 12th, 19th, 22nd or 23rd trading day left in the
month.

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Sell Signal Rule
It is not August. The calendar day of the month is not 16. Today is the ninth trading day left
in the month and tomorrow is not a Monday, Tuesday or Thursday. If all those conditions
exist, sell short tomorrow on the open.

The exit rule is to exit on the first profitable opening or a $3,000 stop if long or $1,600
stop if short. US Federal Holidays do not count as trading days. Use the electronic trading
session opening.

In the last eight years, my testing shows you can use a stop of about $2,800 versus the
larger $3,000 stop. That actually has made a little bit more money while maintaining the
same degree of accuracy. Long-term readers may want to update their strategy.

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Major Markets
of the World
Japan
Cycles tell us there is a major 2019 buy point coming for stocks in Japan. Chart 41 shows
my long-term cycle projection. This cycle has correctly called all the major buy points since
the turn of this century. I doubt the 2019 forecast will be wrong for a rally similar to what
was seen in 2005, 2009, 2012 and 2016. Based on just this long-term cycle, stocks in Japan
are scheduled for major lows this September and March 2023.

Chart 34: Japan Long-Term 2019 Cycle Forecast

Next is my forecast for the Nikkei using long and short term cycles.

Important times to look for buys will be March 20th, June 21st, and October 19th. Expect
declines to begin in the January 19th, May 3rd, and August 22nd time frames.

Chart 35: Japan 2019 Cycle Forecast

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Let’s take a spin around the rest of the globe to see what cycles say should take place in the
markets of other countries.

Chart 36: China Shanghai Composite 2019 Cycle Forecast

Chart 37: India NIFTY 2019 Cycle Forecast

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 Chart 38: Germany DAX 2019 Cycle Forecast

Chart 39: Russia RTS Index 2019 Cycle Forecast

Chart 40: Australia ASX 2019 Cycle Forecast

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 Chart 41: Brazil Bovespa 2019 Cycle Forecast

Chart 42: Emerging Markets 2019 Cycle Forecast

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US Treasury Bonds
There’s a bull market coming…

There is a bull market coming for treasury bonds in 2019. The year should start with a bit of
a dip into a trading range market. I will be looking for buys in late January and April 25th,
and sells the middle of March and early June. Once the up move begins, in July, we should
have an excellent buying opportunity with a pullback in the middle of October and then a
further extension of the rally into the end of the year.

Chart 43: 2019 Treasury Bonds Cycle Forecast

Commodity Prices And Inflation

Chart 44: 2019 Commodity Index Cycle Forecast

Above you see my cycle work on the Goldman Sachs Commodity Index (similar to the
old CRB). It speaks of higher commodity prices in the future, that is bullish for stocks and
suggests a further upturn in inflation.
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Precious Metals
A Bull Market For Gold
Traders should look forward to a bull market in Gold for most of 2019. An ideal buy point
will take place the first week of February.

From thereon expect rising prices until the middle of September. Another buy point is
slated for mid-April and the end of June. Expect a sell off from the middle of September
into October. It looks like a decline from October to last until the first week of November.

Chart 45: 2019 Gold Cycle Forecast

Silver
It’s no surprise to see our 2019 forecast for silver looks pretty much the same as gold, as
they usually move hand in glove. Expect the best buys to come around January 26th, April
20th, July 10th and September 14th. Look for selling zones around March 9th, May 25th,
August 15th and November 1st.

Chart 46: 2019 Silver Cycle Forecast

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Copper
As 2019 unfolds I expect to see Copper kick off the year with a decline lasting until the
first week of March. Then expect a rally until late May to early August when a decline and
serious selling enters the market. That decline should last for rest of the year.

With the slowdown in China this may become the superior bear market of 2019. Traders
should at least begin the year with a bearish bias to see how the situation unfolds.

Chart 47: 2019 Copper Cycle Forecast

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Energy Markets
Crude Oil
Gold used to make the word go around, now it’s black gold; Crude Oil. Eventually this old
rock we live on, floating in space, will run out of hydrocarbons, but not quite yet.

For Crude Oil, I look forward to a selling opportunity as the new year opens with an
important peak the last week in January. This down move should last until late February.
Expect another downdraft to start March 22nd. That decline continues until the first of May
when a month-long rally is expected. Expect the “last leg” of the selling pressures to start
then until a bottom forms the first week in August. The long-term cycle forecast low is for
the first week of July, that may be a re-test of the May low.

Chart 48: 2019 Crude Oil Cycle Forecast

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Heating Oil

Chart 49: 2019 Heating Oil Cycle Forecast

Heating oil is to crude oil what silver is to gold, another example of where a family picnics
and parties together with tops and bottoms coming at the same time.

Expect the 2019 sell off to continue into the first week of March, then a choppy period of
base-building. That leads to a rally starting May that carries until the end of the year. Rallies
should begin the first of March, June, September and December. Be on the lookout for
market declines around Jan 30th, May 11th, August 8th, and October 18th.

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Natural Gas

Chart 50: 2019 Natural Gas Cycle Forecast

Natural Gas exploded at the end of 2018 with a massive rally that caused damage to the
shorts who consistently sold rallies in this market.

It looks to me like the trend goes back to the downside with sells setting up for early
February, early May, early August and October 25th.

On the buy side, we should see good buying opportunities around the first of March,
middle of May and July as well as the end of September. The first six months of the year
look to be down; then we go into a trading range with an upside bias.

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Currencies
Australian Dollar

Chart 51: 2019 Australian Dollar Cycle Forecast

I expect the Australian Dollar will have a spectacular rally at the middle of January
scheduled to last until the middle of October! That should be some kind of rally and one of
the best trend moves of the year.

Along the way look for buys January 25th, April 18th, July 18th, September 7th, and
October 17th. The year’s high should come then; watch for sell signals November 1st and
December 11th.

British Pound

Chart 52: 2019 British Pound Cycle Forecast

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It looks to me like the British pound will be bullish, by and large, all the way into October
2019. As winter begins, I expect the British pound to begin a decline. The optimal buy
points should appear around February 16th, May 23rd, and September 3rd, while selling
opportunities are scheduled for May 1st, August 11th, and October 23rd.

Canadian Dollar

Chart 53: 2019 Canadian Dollar Cycle Forecast

I expect to see a downtrend in this market until February, then a significant move to the
upside until September.

The better buy points should come around February 27th, May 15th, and July 5th while
the optimal sell points are scheduled for February 1st, May 2nd, June 12th, and September
15th.

Always keep in mind that the cycle projection you see above has much more to do with
magnitude than it does trend. If a cycle low is lower than the prior cycle low that does
not necessarily mean price will be lower at that same time. In fact, if price is higher where
cycles show a lower low, the market is quite strong.

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Euro Currency

Chart 54: 2019 Euro Currency Cycle Forecast

Expect the euro currency to join in the rally forecast for the Australian Dollar and the
British pound kicking off 2019 to the upside. Look for January 28th, March 1st, April 18th,
June 6th, and September 30th buy points. I expect the decline to start in earnest in the
middle of May. Sells are booked for late August and late October.

Japanese Yen

Chart 55: 2019 Japanese Yen Cycle Forecast

Our weekly service, Larry TV, called for a major market bottom for this market in
November 2018 and that forecast stands. As we look at the cycle projections, we see the bull
market runs until almost the end of the year. Expect a significant bullish bias here. There
is a pullback scheduled for around the middle of March and the last leg of the bull market
starting around August 17th.

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Swiss Franc

Chart 56: 2019 Swiss Franc Cycle Forecast

Cycles say the Swiss Franc should continue a downward path until the middle of February
before any significant rally begins. A rally should unfold at that time that may carry all
the way into September before prices drop once more into a November low. On balance
this looks much more like a trading affair market then a runaway trend move. Expect buy
points around February 24th, March 15th, May 10th, July 25th, and October 12th while
looking for sells around February 6th, April 19th, June 29th and September 12th.

US Dollar

Chart 57: 2019 US Dollar Cycle Forecast

One of the great moves of 2018 was the up move in the Dollar Index. It looks like we are
now scheduled for a decline until late September. Then expect a rally until the end of the
year. Cycles say look for buy points the end of May and first of October. On the sell side pay
attention to April 30th, August 1st, and the middle of September.

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Softs
We call them the softs, but cocoa, cotton, sugar, and coffee can give traders pretty hard
landings. There is nothing soft about these markets as, for the most part, they lack liquidity
and carry higher commission rates and data fees.

Cocoa

Chart 58: 2019 Cocoa Cycle Forecast

My best guess is the bear market in cocoa should come to a halt in early March 2019, that
should be the springboard for a
bull market move the rest of the
year. Traders will want to pay
attention to the Commitment
of Trader Report at that time as
confirmation because this could
become one of the stellar moves
of 2019.

Look for selling opportunities

at the end of January, April
26th, July 3rd, around August
5th, the middle of September,
and early December. Buys are
scheduled for March 2nd, May
24th, August 30th and October
16th.

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Cotton

Chart 59: 2019 Cotton Cycle Forecast

It looks to me like cotton will continue to trade to the downside until the middle of
September of this coming year. That means there should be excellent selling opportunities
the middle of January and around the first of April, also June 24th. The only good
cyclical buy point we see coming in would be the middle of October when a rally of some
magnitude should begin. Short term buy points should be February 28th, May 18th and
August 2nd.

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Coffee

Chart 60: 2019 Coffee Cycle Forecast

Coffee will begin a flashy rally in the first part of 2019. Cycles are telling us this rally should
continue. Expect buy points around February 2nd, April 30th, and July 1st. Sell points are
scheduled for January 11th, April 5th, and September 1st. As I see it, Coffee will be in an up
move until the latter part of September or early October 2019.

Sugar

Chart 61: 2019 Sugar Cycle Forecast

The sweet science of forecasting sugar tells us to expect a rally until the end of January, then
a choppy sideways market giving way to selling pressures at the first of April and middle
of July. Look for sells September 7th and November 15th. The best buys are scheduled for
March 4th, June 20th, and September 27th.

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Lumber

Chart 62: 2019 Lumber Cycle Forecast

Lumber prices have been a good harbinger of economic growth on the notion lumber is
being bought when something is being built. The forecast for 2019 suggest a first of the
year rally, then a decline to be followed by a strong rally in August. No massive bear market
here. That bodes well for stocks and the economy.

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Meats
Live Cattle

Chart 63: 2019 Live Cattle Cycle Forecast

I’m granted access to my very favorite fishing spot of Montana thanks to a cattle rancher.
When I look at our projection for prices this coming year, I hope they continue to let me
fish. It’s phenomenal fishing but unfortunately it doesn’t look like we will have phenomenal
cattle prices this coming year.

Here comes a cheap shameless plug… if you’re really into cattle you will want to follow our
projections on Larry TV where we have a much closer look at this market. This market
means a great deal to me because forecasting it correctly gives me the opportunity to sneak
up on big brown trout.

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The best buys should come around February 28th and then July 20th. The projected low
around October 19th should spark the next bull market in Cattle. I expect declines to begin
the start of 2019 and around the first week in April. Expect selling pressures in early August
and November.

Feeder Cattle
Feeder cattle follow pretty much the same path; as silver does gold, as heating oil does
crude oil.

Chart 64: 2019 Feeder Cattle Cycle Forecast

Lean Hogs

Chart 65: 2019 Lean Hogs Cycle Forecast

2018 saw a split personality in the lean hog market from straight down, to almost straight
up. I expect the up move, which the year ended on, to continue with a bit of a dip in
January then another substantial up move into late May or early June. We then selloff, only
to rally again. Buys are scheduled for January 10th, September 12th, and December 9th.
Sells are set up for May 15th and October 21st.
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Grains
 Chart 66: 2019 Grain Index Cycle Forecast
All grain prices are combined in the above Grains Index. Clues to the future of grain prices
can be found here. For 2019 we should see rallies from the first of the year until April, then
again from August until October with a year-end rally starting in early November.

Corn

Chart 67: 2019 Corn Cycle Forecast

You think the grain markets would be easy to forecast. We have lots of data, strong seasonal
influences, and the cost of production is pretty well known. Despite that they continue,
at least for me, to be difficult to predict. What I am seeing for Corn in 2019 is a rally into
February then a decline culminating in a market low in August 2019 at which point a
significant rally begins.

Pinpointing it; I will look for sells on January 25th, June 30th, and December 18th. On the
buy side be alert around March 9th, May 30th, August 17 and November 9th.

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Wheat

Chart 68: 2019 Wheat Cycle Forecast

A quick look at the chart suggests that Wheat will close off the year 2018 on the downside,
then begin to decline at the end of January. That decline will stay in effect until the middle
of May. From May on the year should have a bullish bias until the first week of December.

Again, we will want to focus on the Commitment of Traders Report to see what sets up
shortly after the first of the year on the sell side and in August for a set up trade to go
heavily long this market. The best-selling point should come around January 25th, April
19th July 11th and September 28th with buys scheduled for March 15th, June 6th, August
22nd and November 14th.

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Soybeans

Chart 69: 2019 Soybeans Cycle Forecast

Cycles don’t help us in detecting the trend for Soybeans for 2019. That probably indicates a
trading range affair for most of the year. We do have good perspective of when the tops and
bottoms, market turns, will take place.

Expect buys March 9th, June 7th, August 16th and November 8th. On the sell side I will be
looking for sell signals February 1st, April 20th, July 1lth, October 1st and December 19th.

Soybean Meal

Chart 70: 2019 Soybean Meal Cycle Forecast

If there is to be a bull market in the soybean complex it is almost always led by soybean
meal. Here’s a telling point if meal is significantly stronger than beans, we can expect a bull
market in the complex. If they move together, or if meal is weaker than beans, expect a
trading range market.
Page 60
I’m looking for selling opportunities around the middle of March, early September and
the end of November. A market bottom should be built in July as a springboard to a rally
lasting into December.

Soybean Oil

Chart 71: 2019 Soybean Oil Cycle Forecast

Interestingly enough we have a different picture for soybean oil than we do meal or
beans. Here the cycle projection is we should start to bottom in the latter part of 2018
and see a significant rally for most of the year. Expect pullbacks to begin around March
14th, June 19th, the
first of September and
December. Buy points
are scheduled for
February 8th, May 4th,
July 25th, and October
15th.

Also keep in mind that

cycles project more
about time than the
trend of the magnitude
of the move.

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Stocks
Apple

Chart 72: 2019 Apple Cycle Forecast

Google

Chart 73: 2019 Google Cycle Forecast

Page 63
Amazon

Chart 74: 2019 Amazon Cycle Forecast

Microsoft

Chart 75: 2019 Microsoft Cycle Forecast

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Home Depot

Chart 76: 2019 Home Depot Cycle Forecast

Facebook

Chart 77: 2019 Facebook Cycle Forecast

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Tesla

Chart 78: 2019 Tesla Cycle Forecast

Jack Henry & Associates (JKHY)

Chart 79: 2019 Jack Henry & Associates Cycle Forecast

Page 66
Johnson & Johnson (JNJ)

Chart 80: 2019 Johnson & Johnson Cycle Forecast

Berkshire Hathaway (BRK.B)

Chart 81: 2019 Berkshire Hathaway Cycle Forecast

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Annaly Cap Management (NLY)

Chart 82: 2019 Annaly Cap Management Cycle Forecast

Bitcoin

Chart 83: 2019 Bitcoin Cycle Forecast

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Closing Comments
 In Closing…

Like you, I’m a trader placing orders almost every day, actively looking for market highs
and lows. That’s why I began these reports years ago… to help me become more profitable
by having a view of the future.

Some think the markets are beyond prediction, that they are nothing but a series of
random events. Those, like you and I, have seen evidence over many years that markets are
predictable.

The elements of prediction are largely cyclical, price patterns or analogs, and intermarket
relationships. Are they perfect? No. However most of the the time they do give the general
trend and when the important turning points of the year will take place. That give us a
huge advantage; knowing in advance what cards will be played and when.

I spent much of 2018 trying to find out each market’s cycles, short and longer term, then
learning how to meld them together. Did I succeed? We shall soon see as 2019 unfolds.

In the land of the blind, the one eyed man is King.

Larry Williams

PS: A special thanks to Louise Stapleton. These reports would never see the light of day
without her dedication and hard work.

Page 70
 Disclaimer

NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKE-

LY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN
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IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIM-
ITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS
DO NOT REPRESENT ACTUAL TRADING. SIMULATED TRADING PROGRAMS
ARE SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT
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TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS

HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD,
SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE
THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-
OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET
FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH
THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO
THOSE SHOWN.

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