As of 12:37 p.m. (EST) on April 5, 2021, the Dow hit a high of 33503.5 in the futures market. It appears the Dow has hit its’ peak based on the rising wedge top and current algorithm in progress. A decline similar to the October 10, 2018 to October 29, 2018 is expected.
Dow: April Rising Wedge
The change in algorithms noted on March 30, 2021 has developed into a rising wedge structure in the futures market. The Dow is expected to reach 33560 (+/- 1%) in the overnight market between April 5, 2021 and April 6, 2021.
Dow: Algorithm Changes
After the close on Monday, March 29, 2021, the predicted model of futures price structure algorithms changed dramatically. This occurred after a tense day of volatility, margin calls, and calculations of big bank losses. It appears that plans have changed with an accelerated schedule to start a decline this week.
Dow: Hourly Charts
The algorithm(s) that ran between 6:00 p.m. (EST) on January 16, 2020 and 09:00 a.m. (EST) on January 24, 2020, as illustrated on a one hour chart, is very similar to the hourly chart developed between 10:00 p.m. on March 17, 2021 and 4:00 p.m. on March 26, 2021. This would indicate that a short decline is expected between March 29, 2021 and April 1, 2021. Another peak would follow with a very sharp decline going into May 5, 2021 (+/- 1 trading day).
Dow: 2022 Crash
Stock charts courtesy of StockCharts.com.
What occurred between May 2007 and May 2008 has been replicated on a large scale between January 2018 and March 2021, as shown in the charts above. Based on the 2007-2008 structure, calculations indicate a major market crash similar to October 2008 is expected to start on September 9, 2022.
Dow: Repeating Trend Lines
Charts courtesy of StockCharts.com.
A review of the 2018, 2019-2020, and 2021 trend lines shown above indicates a significant decline is expected to start by the second quarter of 2021. In the first chart there were 9 trading days between September 21, 2018 and October 3, 2018. In the second chart there were 18 trading days between January 17, 2020 and February 12, 2020. If this pattern continues the Dow should peak above the 2021 trend line in the 3rd chart, pullback and then hit a final peak in April. This pattern would explain the steady accumulation of Commercial Futures Trader short positions in the S&P500 and long positions in the VIX.
Dow: Broadening Formation
Stock chart courtesy of StockCharts.com.
In the February 6, 2021 post (SP500: Broadening Formation) it was noted that an Ascending Broadening Wedge pattern was forming in the SPDR SP500 ETF Trust (SPY). Since that time the SPY has declined to 381.72. Since February 16, 2021, a broadening formation has developed in the Dow, as shown in the chart above. This is also very clear in the Futures market and it is expected to be a prelude to a decline. Underlying positions in the Futures market indicate Commercial Traders are expecting a decline in the Dow and S&P500.
Dow: Decline Offset
The Senate approved the coronavirus relief bill. This could offset a decline that is expected on Monday, March 8, 2021.
Dow: Sharp Drop
Unless something changes, current price structures indicate a sharp drop in the Dow on Monday, March 8, 2021.
Update: A decline of at least 2.4% is expected on Monday, March 8, 2021.
Dow: Bear Market
The Dow is expected to close higher today before starting a bear market with a steady decline going into 2022.
Dow: Realigned Expectations
The bond market has realigned expectations for the Dow. A decline has started and the Dow is expected to reach 19,642 (+/-2%) by April 14, 2021. Volatility will continue to increase.
Dow: 2021 vs 2007
Based on the historic size of 30-Yr Bond short positions held by futures traders, structural timing calculations indicate the Dow is expected to hit its peak this week prior to turning lower. Futures traders were in a similar situation prior to the Dow peaking in October 2007.
Dow: Time is Short
On a 15 minute Futures chart for the Dow Jones index, it appears that February 17, 2021 at 19:30 (7:30 PM EST) is the equivalent of February 19, 2020 at 19:00 (7:00 PM EST). Time is short. If this thesis is correct, a decline has started and the Dow is expected to reach 26,892.10 (in the Futures market) by Friday, February 26, 2021. After this decline there will be a brief rally, followed by an even larger decline.
Dow: February Decline
In the Futures Market, it appears that the algorithm used to develop a Dow structure between 6:30 PM EST February 12, 2020 and 12:45 PM EST February 17, 2020 was also used to develop a similar structure on a shorter timeline between 08:30 AM EST February 10, 2021 and 16:45 PM February 12, 2021. Another February to March decline is expected.
Dow: Early Decline Update
Today, futures market activity indicates a long-term decline in the Dow is expected to start on Friday, February 12, 2021. Structures developed up to this point reflect plans that will ultimately take stock markets down to a 20+ year low by mid-2022.
Dow: Upcoming Decline
Stock chart courtesy of StockCharts.com.
Based on a review of Specialist activities between 1964 and 1974, it appears that major structural templates from this time period were modified and used on a large scale between 1999 and 2009. Current Designated Market Makers are expected to modify an October 2007 to March 2009 Dow template for a significant decline between 2021 and 2022. This template would initiate a decline by March 2021 and last until mid-2022. Unique data points shown below should be noted, as they align with what occurred during the peak of 2007. At this point there is a 90% chance the market will decline over the next two years in a format similar to what occurred during 2007-2009. Preliminary estimates indicate the Dow is expected to fall below 6000 by mid-2022. The following data was identified in the engrbytrade computer model.
Prerequisites:
30Yr T-Bond Non Commercial Trader Short Position Peak
Completed on 6/19/07
Completed on 11/3/20
Copper Peak vs Dollar Value
Completed on 9/25/07
Completed on 12/21/20
Dow: 88 Days
Based on historical timelines, dynamic trade structures, engrbytrade™ embedded trade markers, and a collapsing economy, an 88 business day decline has started that will lead to 15,804 (+/- 10%) on the Dow by June 3, 2021. This is the first phase of a decline that will ultimately lead to a long term low of 4,137.19 on the Dow. Another point of reference is the SPY. It is expected to decline to 200 (+/- 5%) by June 3, 2021.
Dow/SP500: Prudent Warning
Why Grantham Says the Next Crash Will Rival 1929, 2000
See: Investing Legend Sees “Spectacular” Crash In “The Next Few Months”
Dow: 44 weeks
Stock chart courtesy of Stockcharts.com.
In addition to the 1929 timeline, Ray Dalio of Bridgewater Associates made a point in 2017 that the U.S. economy looks like it did in 1937.
The week of May 4, 1936 to week ending March 6, 1937 covers 44 weeks with a similar structure shown in the chart above. As of the end of this week, the Dow will complete its 44th week starting from March 23, 2020.
Dow: 1929 vs 2021
On September 3, 1929 the Dow Jones index hit an all-time high of 386.10 prior to starting the market collapse. Today, Market Makers took advantage of the inauguration by pushing the SPDR S&P500 ETF (SPY) upward to hit a high of 384.79. It is not a coincidence that the Dow’s 1929 high of 386.10 and today’s SPY high of 384.79 are less than 2 points apart.
Dow: Market Peak
Underlying futures trader positions and intermarket relationships between the Dow, 30Yr Bond, Copper and U.S. Dollar indicate a major decline is expected over the next two years. There is a high probability the Dow will repeat a structure similar to that of October 2007 through March 2009, ultimately dropping below 6,000. As of January 15, 2021, data indicates the Dow is in the same position as it was on October 11, 2007.
Dow: Hedged Position
Stock chart courtesy of StockCharts.com.
The chart above reflects the intent of Market Makers and Commercial Futures Traders to provide a swift decline below 15,000. At this point Commercial Futures Traders are hedged to take advantage of this broadening formation.
Dow: Timeline Review
A review of the timeline indicates Market Makers are still planning a January – February decline. It is expected that they will split the decline with the first part in January by dropping the Dow to 26,256 (+/- 2%) by January 28, 2021. This will be followed by a relatively small retracement during the first week of February to 28,154 (+/- 2%). The second decline is expected to take the Dow down to 14,683.46 (+/- 2%) by March 2, 2021.
Dow: 3.618
Chart courtesy of StockCharts.com
On January 8, 2021 the Dow hit an Engrbytrade level of 3.618 in the chart structure shown above. From this level the Dow is expected to roll over and start moving lower. This structure has occurred numerous times in the past. One example occurred between May 20, 1987 and August 25, 1987 prior to the October 1987 crash.
Dow: Dow vs. SPY
Note: On August 29, 1929 the Dow hit a daily high of 378.80 prior to moving lower the following week. On December 21, 2020 the SPDR S&P 500 ETF (SPY) hit a daily high of 378.46.