Dave's 100-year Long Range LW Forecast

Charts: The S&P 500 plunged downward today, hit 1333, and popped back up to finish flat. 1333 is the final Fibonacci retracement level in the series, a level the market has been struggling with for almost two years. 1333 is the bottom of the trading channel the market has been in for the past couple months. 1333 is also very close to the 50-day moving average. It is impossible to overstate how important it is for the market to find support at 1333. I don't know about you, but I am on my knees praying to the stock market Gods that 1333 holds.

On June 29 the market experienced a follow through day that turned a rally attempt into a technical rally. That was the day that the EU said it will bail out Spanish banks without making the Spanish government liable for these loans.

Fundamentals: EU ministers are squabbling like children about whether the Spanish government is liable for Spanish bank bail outs, even though they seemingly made up their minds that Spain's government is not liable. The fact that the EU can't make up its mind, that it can't shoot straight, puts an icy feeling into my bowels and makes me want to vomit. Luckily I have a puke bucket near my desk, so its all good.

Dave's Long Range LW forecast: A year and a half ago I made my last long range forecast. Back then I said the CIA would build a string of drone bases stretching from the Mideast into North Africa and into the deep Sahara. This is now actually happening. Investing is no place for false modesty. Even though I am normally a modest person, I am forced to admit that I have mad skills at long range geopolitical forecasting. I've got the skills. I've got the tools. And I am putting them to use. Here goes...

For the sake of simplicity let's say the Long War started right after 9/11. In the early years there were only two LW campaigns (or LW wars): Iraq and Afghanistan. Since Iraq has heated up enough to be called a LW campaign once again there are currently 7 LW campaigns: Afghanistan, Pak Tribal Lands, Iraq, Syria, Yemen, Somalia, and Mali. There is a clear trend of more wars and they are moving down the African continent. Nigeria is on the verge of tipping into a jihadist guerrilla war, Kenya is heating up, and Sudan is always near a boil.

So two big jihadist pincer movements are creeping down either side of the African continent, pointing at South Africa, the strongest country in Africa by far. South Africa is militantly Christian. The bad guys need the Long War to become a Muslim vs Christian conflict to really light the world on fire. In time they will succeed, unless the CIA really has its shit together. But Petraeus will probably be followed by a weaker Director, so it won't have its shit together. When this weak Director takes over, the wars in Africa will explode. There will be blow back up the continent and Iran will catch fire. When all this happens we will see much bigger wars, the size of Vietnam. By then there will be a third CIA Director and he will be as good as the current one. If the CIA is left alone then countries like South Africa, Ethopia, and Turkey will do most of the fighting. The good guys will win. It will take a few decades to mop up the aftermath. The whole process will take about 100 years.