Intermarket structural analysis research
Daily Engrbytrade™ S&P500 calculations indicate that positioning for very large distributions took place between February 28, 2023 and April 5, 2023. This is similar to what took place between October 20, 2021 and November 19, 2021. This positioning also indicates preparations are being made for a significant decline in 2023.
Stock charts courtesy of StockCharts.com.
Starting at 11:41 a.m. today, the Dow and S&P500 1-minute chart followed the Engrbytrade eight point trading model shown below. This is typically followed by a rally.
Update. Rally to continue.
Put/Call Ratio = 0
Rally to Follow.
Between October 19, 2021 and November 22, 2021 daily engrbytrade™ Dow calculation results were found to be similar to results produced between January 19, 2023 and March 6, 2023. This comparison indicates the Dow January 2023 to March 2023 structure is expected to be a prelude for a decline over the next several months. It would also align with the expectation of a decline discussed on February 25, 2023. Similarities were also found for the S&P500 between October 20, 2021 to November 19, 2021 and January 17, 2023 to February 28, 2023.
Stock charts courtesy of StockCharts.com.
Just in time for a market decline. Timing is everything.
Jerome Powell testimony
Date: Tuesday, March 7, 2023
Time: 10:00 AM
The Semiannual Monetary Policy Report to the Congress
Jerome Powell testimony
Date: Wednesday March 8 2023
Time: 10:00 AM
The Federal Reserve’s Semi-Annual Monetary Policy Report
Daily intermarket futures trading data calculations indicate the Dow and S&P500 are expected to continue to decline in March 2023 based on comparable calculation results from February 2, 2022 and August 24, 2022.
Stock charts courtesy of StockCharts.com.
Market Makers have successfully managed to develop Dow and S&P500 chart structures between 2018 and 2023 that are similar to chart structures between 1966 and 1973. The end result is also expected to be similar to 1974. Arrows in the charts below overlay Engrbytrade™ markers based on comparable calculations from 1966 to 1973 and indicate a steady decline is expected until the end of 2023. Preliminary estimates indicate the end result would be a drop below 14,000 for the Dow and below 2000 for the S&P500.
Stock chart courtesy of StockCharts.com.
Intensifying War, Enormous Upside for Gold – Charles Nenner
The S&P500 1-hour chart is in the process of developing a descending broadening wedge. Based on this structure the potential exists for a brief move up to fill a gap between 4219-4228 that was created on August 21, 2022. Regardless of whether this move occurs, a meaningful decline down to its lower trend line on a daily chart is still expected.
Note that the S&P500 and NASDAQ 15-minute charts are in the process of forming a descending triangle. A decline is expected.
The Dow/S&P500/NASDAQ are still expected to move higher. Algorithms are currently in the process of filling intraday gaps created during a volatile trading period after Jerome Powell’s speech on February 7, 2023.
The S&P500 is still on track to move above 4228 and fill its August 19-21 futures gap. On a relative scale, calculations indicate algorithms developed the January 19, 2023 to February 7, 2023 1-hour futures chart structure (with adjustments as needed) based on characteristics from the July 14, 2022 to August 10, 2022 1-hour futures chart. Using these similarities, calculations indicate a move up to 4297 (+/- 1%) is expected before making a significant move to lower levels.
Stock chart courtesy of StockCharts.com.
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.