Intermarket structural analysis research
Note that algorithms are recalculating the sequence of events needed to fill the gap created by the Dow and S&P500 this morning. This also includes other derivative products linked to the Dow and S&P500. When this gap is filled, the decline is expected to continue.
Stock chart courtesy of StockCharts.com.
One hundred eighty eight years ago the S&P500 gained 32% between January 1835 and September 1835 before losing 72% of its value between October 1835 and July 1842. Ninety four years ago the S&P500 gained 29% between January 1929 and September 1929 before losing 86% of its value between September 1929 and June 1932. Both declines were followed by very long economic depressions.
Based on a 94 year timeline preliminary estimates indicate the S&P500 should gain 30% between January 2023 and September 2023 before starting a long decline and losing between 80% – 90% of its value. Additional data will be needed during 2023 to validate this thesis.
Just like 1837-1842 and 1929-1932, the next crash will be caused by congressional spending, recent government regulations, economic policies, presidential executive orders, and the misallocation of capital where everyone involved believes they can control the future.
References:
Panic of 1837
https://en.wikipedia.org/wiki/Panic_of_1837
JACKSONIAN MONETARY POLICY, SPECIE FLOWS, AND THE PANIC OF 1837
http://www.nber.org/papers/w7528.pdf
Crisis of 1839
https://www.nber.org/papers/h0133
Sovereign Debt and Repudiation: The Emerging-Market Debt Crisis in the U.S. States, 1839-1843
https://www.nber.org/papers/w10753
History of Money and Banking in the United States: The Colonial Era to World War II
https://mises.org/library/history-money-and-banking-united-states-colonial-era-world-war-ii
The Great Crash and the Onset of the Great Depression
https://www.nber.org/papers/w2639
The Macroeconomics of the Great Depression: A Comparative Approach
https://www.nber.org/papers/w4814
Debt and Default in the 1930s: Causes and Consequences
https://www.nber.org/papers/w1772
As noted on January 8, 2023 calculations indicate the Euro is expected to move higher over the next 12 months. This Euro shift is also expected to affect the Dow and S&P500 with both moving higher over the next 12 months. It would fill the Dow gap noted on January 3, 2023 and both S&P500 gaps noted on January 4, 2023.
Stock chart courtesy of StockCharts.com.
In addition to a gap in the Dow 15-minute futures chart below 34,604 that was created on December 14, 2022, the S&P500 1-hour futures chart contains one gap below 4228 that was created on August 19, 2022 and one gap below 4071.25 created on December 14, 2022. It is expected that both of these gaps will be filled prior to markets moving lower.
Stock chart courtesy of StockCharts.com.
Preliminary research shows Dow and S&P 500 algorithms have been in the process of repeating their basic 1-hour futures chart structures developed between May 30, 2022 and June 17, 2022. Real time data indicates underlying derivative algorithms are moving products in a choreographed effort to develop the May – June 2022 base chart structures. This means Market Makers are expected to follow through with a decline prior to moving the markets higher. Additional work will be needed to determine the level of decline anticipated.
Daily engrbytrade™ S&P 500 futures calculations indicate a decline similar to what occurred after September 12, 2022 is expected to start this week.
Stock chart courtesy of StockCharts.com.
Disclaimer
The VIX has been following a pattern similar to what occurred between 2007 and 2008 as shown in the VIX 2023 Outlook. On November 23, 2022 the VIX filled its August 22, 2022 gap. This is similar to what occurred between January 27, 2022 and February 12, 2020 as shown in the 2020 chart below. The VIX is currently in the process of repeating the final gap up that is similar to what occurred on February 18, 2020. This would mean that the Dow / SP500 would be expected to start a significant decline this week.
Stock charts courtesy of StockCharts.com.
August – November 2022
January – February 2020
Daily engrbytrade™ calculations from November 14, 2022 confirm the VIX is expected to move down to the lower trend line as discussed on November 11, 2022. This move should be similar to the VIX decline between October 13, 2021 and November 4, 2021. The Dow and S&P500 will continue to move higher as Market Makers distribute inventory.
Based on the declines in January and June 2022, preliminary futures structural calculations indicate the Dow will reach 25,913 and the S&P 500 will reach 3,253 by December 8, 2022.
Based on a detailed review of Daily engrbytrade™ calculations, candlestick structures, accumulation patterns, etc. preliminary data indicates the Dow and S&P500 structures to be developed in October – November 2022 are expected to be similar and have a relatively larger scale than what was developed during October – November 2021.
The last 3 weeks of this SPX weekly chart look similar to the Dow weekly chart between September 30, 1929 and October 19, 1929.
Chart courtesy of StockCharts.com.
Charles Nenner on the S&P 500, Dow, Gold, and Bitcoin.
The Dow and S&P 500 decline in September/October 2022 with a tradable low in the first quarter of 2023. They will move up into March 2023 before making a serious move to the downside.
Gold moves lower in September.
Bitcoin moves up until the beginning of October 2022, then it will continue to move lower.
Since July 19, 2022 daily engrbytrade™ Dow and S&P500 calculations have revealed an underlying trend of significant selling that is similar to what occurred between October 21, 2021 and November 11, 2021. The rate and scale of Market Makers distributing stock indicates a move to significantly lower levels is expected during the last half of 2022.
Stock charts courtesy of StockCharts.com.
HUGE DECLINE!! BUT NOT QUITE YET!! FIND OUT WHEN??
In the following June 16, 2022 interview Peter Eliades notes that markets will move significantly lower this fall.
On January 24, 2022, it was reported that global stock selloff losses were near $3 trillion. It should be noted that part of this stock (inventory) moved from institutional customers, such as pension funds and large trading firms, to the accounts of NYSE Designated Market Makers (DMM) and Supplemental Liquidity Providing Firms (SLP-Prop / SLMM). In the coming weeks part of the inventory accumulated by the DMM and SLP firms will be sold to corporations who are initiating corporate buyback programs. This buyback process will run until March 14, 2022. As corporate buyback programs progress, DMMs and SLP firms will raise prices of their inventory and institutions, large trading firms, retail investors, etc., will start buying. When DMMs and SLP inventories are depleted they have the option to sell short. During the next decline DMMs and SLP firms will cover their short positions while buying stock (inventory) from institutions and large trading firms at a lower price. This process of inventory control was explained in Richard Ney’s books published between 1970 and 1975. The following document provides some insight to the process as well. On page 10 it states that Market Makers must track their inventory to ensure they are not taking undue risk or encroaching on capital limits.
As noted with the Dow Long Term Decline post, Friday’s update to intermarket currency futures trading data indicates the S&P500 is also recreating a move similar to what occurred between October 3, 2018 and October 11, 2018. A retracement is expected with a move up to 4,557 (+/-1%). It appears a long term decline has been initiated.
Stock chart courtesy of StockCharts.com.
Daily engrbytrade™ S&P500 calculations continue to indication a move upward is expected. The daily right angle broadening formation provides a base for this move.
Stock chart courtesy of StockCharts.com.
A detailed review of SP500 daily calculations, associated structural calculations and underlying futures trading data indicates the current rising wedge shown in the chart above is repeating a SP500 rising wedge that developed between June 28, 2018 and October 3, 2018. Additional data will be reviewed as the index moves higher.