Intermarket structural analysis research
The response from stock markets concerning an interest rate increase of 0.25% indicates algorithms are expected to continue moving the S&P500 higher to close a 5-minute futures chart gap created on August 21, 2022. A move up above 4229 in the futures market within 8.5 trading days (+/- 1.5 trading days), starting on January 30, 2023, is still expected.
Stock chart courtesy of StockCharts.com.
Between January 19, 2023 and January 27, 2023 daily engrbytrade™ Dow calculations indicate algorithms have been positioning the Dow to set up a brief move upward prior to starting a decline. The January 19 – 27, 2023 calculations are similar to results received between December 8, 2021 to December 17, 2021 and August 4, 2022 to August 9, 2022. Prior to conducting a decline in the Dow, algorithms are expected to move the Dow higher and fill a gap that was created in the 5-minute Dow futures chart on December 14, 2022. This would move the Dow above 34,617 in the futures market before a decline would start.
Algorithms are also expected to move the S&P500 above 4229 in the futures market to fill a gap created in the 5-minute futures chart between August 19, 2022 and August 21, 2022.
This move up is calculated to take 8.5 trading days (+/- 1.5 trading days). A move down is still expected in accordance the January 25, 2023 post.
Stock chart courtesy of StockCharts.com.
On December 14, 2022 at 2:00 p.m. the Federal Reserve raised the overnight borrowing rate one-half percent to a range between 4.25% and 4.5%. This announcement resulted in a gap of the 1-hour S&P500 and Dow futures charts. The S&P500 gap was filled at the close on January 26, 2023. It appears algorithms are working to fill the December 14, 2022 Dow futures chart gap above 34,482.
Daily engrbytrade™ inverse derivative calculations indicate the Dow and S&P500 are expected to decline. Calculations for the Dow are similar to results from January 4, 2022 and February 9, 2022. Calculations for the S&P500 are similar to results from April 1, 2022 and August 4, 2022. Engrbytrade structural calculations in the futures market indicate the S&P500 is expected to reach 2891 (+/-1%) and the Dow to ultimately reach 27,108 (+/- 1%).
Stock chart courtesy of StockCharts.com.
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.