Additional data provides a closer comparison to 2018, as shown below.
Stock charts courtesy of StockCharts.com
Interest Rates: 10-Yr Note September 2023
On August 26, 2023, it was noted that the 10-Yr Note appeared to peak on August 22, 2023 with a close of 4.332. Based on the 10-Yr Note Non-Commercial Traders Net (Long – Short) positions and 2022-2023 comparison to 2018 shown below, the 10-Yr Note yield is still expected to move significantly lower in 2023.
Stock charts courtesy of StockCharts.com
Interest Rates: 10-Yr Note August 2023
On July 7, 2023, data from the 10-Yr Note Non-Commercial Traders Net (Long – Short) chart reflected underlying trading data where the 10-Yr Note peaked on September 25, 2018 as well as indicating another peak was expected very soon in 2023. Based on timeline percentages shown in the 2018 and 2023 10Yr-Note charts below, it appears the 10-Yr Note peaked on August 22, 2023. Additional work will be needed to see what the impact will be on equity markets.
Stock chart courtesy of StockCharts.com.
Interest Rates: 10-Yr Note 2023 Timeline
Data shown in the following 10-Yr Note Non-Commercial Traders Net (Long – Short) chart provides a partial background where the 10-Yr Note peaked on September 25, 2018 and is currently expected to peak within a matter of days. In addition to the Non-Commercial Traders chart, weekly engrbytrade™ 10-Yr note futures calculation results show the following dates where the 10-Yr note peaked before moving lower.
January 18, 2000, June 22, 2004, April 13, 2010, October 2, 1018 and the most recent is July 3, 2023.
The following 10-Yr Note charts are included to provide some perspective on the current timeline.
Stock chart courtesy of StockCharts.com.
Interest Rates/Dollar: Velocity of Money
It was recently noted that the velocity of money and money supply have not been this low since 1932 when Great Depression unemployment was 23%, GDP growth was -13% and the annual inflation rate was -11% along with 1700 banks failing. The current situation appears to be much different according to the U.S. Bureau of Labor Statistics showing an unemployment rate of 3.7%, inflation rate of 5.3% as of May 2023, along with three bank failures in the first half of 2023, including First Republic Bank, Signature Bank, and Silicon Valley Bank.
A review of Federal Funds Effective Rate hikes since 2009 shows the current economic situation will change dramatically over the next three years based on the +4.86% change in the Fed Funds rate since March 2022. The Velocity of M2 Money Stock is expected to continue its decline, as it did between Q3 2006 and Q3 2009. This will include a prolonged decline in the Dow, S&P500 and NASDAQ along with a recession at best between 2023 and 2026.
January 1999 (4.63%) to July 2000 (6.54%) = +1.91%
June 2004(1.03%) to August 2006 (5.25%) = +4.22 %
December 2015 (0.24%) to April 2019 (2.42) = +2.18%
March 2022 (0.20) to May 2023 (5.06) = +4.86%
References:
Velocity of Money: Definition, Formula, and Examples
Money Supply Growth Falls to Depression-Era Levels for Second Month in April
Timeline of the Great Depression
Federal Reserve Bank of Richmond Economic Review; M2 and Monetary Policy September /October 1989, Robert L Hetzel, page 15.
Bank Failures in Brief – 2023
Interest Rates: No More Rate Hikes
Expect The “Pivot” Next…Rates Could Go NEGATIVE!!
This aligns with the June 12, 2023 Engrbytrade™ post on “Preparations for 10-Yr Note Yield Decline”.
Interest Rates: Preparations for 10-Yr Note Yield Decline
Futures trading data calculations indicate preparations are being made for a substantial decline in the 10-Yr Note yield over the next several months. This setup is similar to what occurred between September 25, 2018 and October 9, 2018. Part of this preparation was discussed in the June 3, 2023 post showing a 10-Yr Note Non-Commercial Traders net position chart illustrating how traders are continuing to move to extremes beyond what was recorded on September 25, 2018.
Stock charts courtesy of StockCharts.com.
S&P500/Interest Rates: Fibonacci 300% – 327.20%
On May 18, 2023, it was noted that a significant decline in the S&P500 is expected over the coming weeks. The following 10-Yr Note Non-Commercial Traders net position chart update illustrates how traders are continuing to move to extremes beyond what was recorded on September 25, 2018. The following S&P500 charts also illustrate a consistent pattern within a Fibonacci range of 300% – 327.20% where a downturn is expected.
Stock chart courtesy of StockCharts.com.
Dow/Interest Rates: September 26, 2018
Intermarket futures trading data 10-Yr note calculations indicate that on May 23, 2023 the Dow was in a structural position similar to where it was on September 26, 2018. A 23% decline is still expected, as noted on May 21, 2023.
Stock charts courtesy of StockCharts.com.
Gold/Dollar/Euro: Gold 2023 Decline
Intermarket futures trading data calculations indicate the U.S. Dollar, Euro and gold are in a structural position similar to where they were in October 2012. This configuration is expected to produce a drop in gold over several months as the U.S. Dollar and Euro move higher. The following charts illustrate this positioning.
Stock charts courtesy of StockCharts.com.
S&P500/Interest Rates: 2018 Decline
In addition to the May 13, 2023 near term update, the following 10-Yr Note Non-Commercial Traders net position chart indicates a significant decline in the S&P500 is expected over the coming weeks. This is similar to what occurred between September 25, 2018 and December 24, 2018, as shown in the chart below.
Stock chart courtesy of StockCharts.com.
Interest Rates: 2023 30-Yr vs 2018 10-Yr
Weekly Engrbytrade™ futures trading data calculations indicate a situation exists where futures traders are creating a 30-Yr yield descending triangle that is similar to the 2018 10-yr yield descending triangle shown below. A brief move upward in the 10-Yr and 30-Yr yield is expected. This will be followed by a decline during the remainder of 2023 as stock markets move lower.
Stock charts courtesy of StockCharts.com.
Interest Rates: U.S. 10-Yr Note Yield Decline
On November 6, 2022 it was noted that weekly futures trading data calculations indicated the 10-Year note yield was peaking and in a structural position similar to where it was on November 6, 2018. The 10-Year note has slowly declined from 4.218 on November 7, 2022 to 3.373 on March 24, 2023. As of March 24, 2023 the 10Y-Yr note is in a similar position to where it was on November 16, 2018. Current weekly futures trading data calculations indicate the 10-Yr note yield is expected to conduct a decline similar to what occurred between November 2018 and September 2019. The 2022 to 2023 chart shown below provides a trend line of 18.25 degrees below the x-axis and overlays Engrbytrade™ markers based on comparable calculations from 2017. This indicates a steady decline below 1.5% is expected by the end of 2023.
Stock charts courtesy of StockCharts.com.
Economy: Stock Market Decline in 2023
Intensifying War, Enormous Upside for Gold – Charles Nenner
- Inflation continues to move higher
- Fed Funds rate continues to move up to 5 ½ to 6%
- Market declines 38% in 2023 (starting in March)
- 2027 crash of all crashes (1929 situation)
- Gold in a trading range and declines until March. A major move up starts in May
Interest Rates: 10Yr Note November 2018
Weekly futures trading data calculations indicate the 10-Year US Treasury Note Yield is peaking and in a structural position similar to where it was on November 6, 2018.
Stock charts courtesy of StockCharts.com.
Interest Rates: 1987 10-Yr Note
A review of the current non-logarithmic US 10-Yr Note interest rate structure shown below indicates it is similar to the 1987 non-logarithmic 10-Yr Note structure developed between January 1987 and October 1987.
Stock chart courtesy of StockCharts.com.
Interest Rates: 1987
Based on engrbytrade™ 10Yr Note interest rate futures market structural calculations, a significant stock market decline is expected in the coming days. This decline could be as swift as the 1987 crash.
Interest Rates: 2019 10-Yr Structure
Starting on March 1, 2022 the one hour 10-Yr Note interest rate structure started to repeat its one hour structure that started on October 6, 2019 and hit a peak of 1.968 on November 7, 2019. It is expected that the current structure will continue to follow the general trend of the 2019 structure and reach a peak of 2.547 before trending lower.
Interest Rates: October 2018
Futures market structural calculations indicate a decline of the 10-Yr Note interest rate is expected in March 2022. This move will be similar to what occurred in October 2018 and reach 1.78. Then a final move upward will take this interest rate to 2.06 before making a significant decline.
Interest Rates: 10-Yr Lower Trend Line
Stock chart courtesy of StockCharts.com.
10-Yr Note and 30-Yr Note intermarket futures trading data calculations show a significant decline in the stock market is expected to start as soon as the 10-Yr note drops below its lower trend line in the chart shown above. This move in the bond market will start just as it did on November 16, 2018 and January 15, 2020.
Interest Rates: Lower in 2022
Intermarket Futures trading data calculations continue to indicate interest rates are expected to move lower in 2022, regardless of Federal Reserve member forecasts. Projections indicate the 10-Yr note rate dropping below its 2020 low of 0.75%.
Interest Rates: 10Yr Move to Zero
Additional futures trading data revised 10Yr note interest rate structural calculations. This update indicates the 10Yr note interest rate is currently positioned to repeat a decline that is similar to what occurred between November 9, 2018 and September 3, 2019. A move to zero is expected by the third quarter of 2022.
Stock chart courtesy of StockCharts.com.
Interest Rates: Year End Decline
Futures trading data calculation results have moved outside of a statistical range that has not been seen since March 22, 2005. By December 31, 2021 the 10yr note rate is expected to hit 0.4% as the 30 year bond interest rate drops below 1.0%.
Interest Rates: Bank of England
On October 9, 2021 Bank of England policymaker Michael Saunders made an announcement to get ready for “significantly earlier” interest rate rises due to inflation pressure. The timing of this announcement is similar to that of September 26, 1929 when the Bank of England raised its discount rate from 5.5 to 6.5% just prior to the 1929 stock market crash.