This is one method of reviewing the 10-Yr note using a Fibonacci perspective within a structural base.
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Silver: 2023 Relative Value
On July 24, 2023 it was noted that British Pound Commercial Futures Trader expectations would impact the price of silver. Since that time the average relative value of silver derivatives have moved into a position of being “Extremely Undervalued”. The following chart provides a representative average relative value of silver derivatives vs. the U.S. Dollar. Calculations are adjusted as the average trend line changes. The current position of this relative value provides an expectation that silver should move higher over the next several months.
Interest Rates: 10-Yr Note September 22, 2023
Additional data provides a closer comparison to 2018, as shown below.
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S&P500: 2007 Descending Triangle Structure
Between June 26, 2023 and September 21, 2023 market makers created a descending triangle structure similar to what was developed during the last half of 2007. A decline below the triangle support line is expected to occur. In this situation futures traders would then move prices upward at a later date to fill the futures gap created between August 1, 2023 and August 2, 2023.
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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.
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Dow: Price to Volume Positioning 9/15/23
On September 15, 2023 daily Engrbytrade™ price to volume positioning calculations indicated the Dow is expected to make a brief move up to 35,630. This move is on a smaller scale compared to calculations for what occurred between March 17, 2023 and May 1, 2023. It also appears to be a coordinated effort in support of filling the S&P500 August 1 – 2, 2023 gap.
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Dow: Mini Dow Futures Final Signal
On September 9, 2023 it was noted that a 3rd signal of repetitive computer program selling had not appeared within a 4 trading day window of the September 8, 2023 E-Mini Dow futures signal. On September 14, 2023, 4 trading days after the E-Mini Dow futures signal on September 8, 2023, a process of repetitive computer program selling was observed. This appears to have completed the topping process, which is similar to what occurred between late 2021 and early 2022, as shown in the chart below.
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Dow: 1987 vs 2023 Update
On August 19, 2023 actual Fibonacci percentages were calculated for a comparison between 1987 and 2023. As of September 8, 2023, the Dow continues to stay within its comparative range from 1987. Very large block trades observed between late August 2023 and early September 2023 appear to be similar in nature to what was observed in October 2022. At this point the Dow is expected to continue moving higher.
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Dow: Mini Dow Futures 3rd Signal
On September 6, 2023 it was noted that two out of three Mini Dow futures signals were received. It was also observed that an indication of repetitive computer program selling appeared within a four day window of each of the first two Mini Dow futures signals.
On September 8, 2023 a 3rd Mini Dow futures signal was received indicating the topping process is near completion. At this point, repetitive computer program selling has not appeared within a 4 day window, as it did with the first two signals. The following charts show a comparison between the February 2023 to September 2023 structure and the August 2021 to January 2022 structure.
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S&P500: 2019 – 2020 Review
In addition to the trade data review of 2021 and 2023, as discussed on September 8, 2023, a review of daily Engrbytrade™ S&P500 trading data was done between November 2019 and February 2020 to identify strategic trade positioning dates. Calculations between November 4, 2019 and February 12, 2020 indicated strategic trade positioning did occur during this time frame in preparation for a decline in 2020. Extreme Engrbytrade™ readings from very subtle movements in price were noted during the trading days of November 4, 2019, November 26, 2019, December 17, 2019, December 18, 2019, December 23, 2019, January 17, 2020, January 21, 2020 and February 12, 2020.
Based on strategic trade positioning data reviewed in 2019, 2020, 2021, and 2023, a there is a high probability of a 25% to 30% decline occurring in 2024.
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S&P500: Decline In 2024
A review of daily Engrbytrade™ S&P500 trading calculations between May 27, 2021 and September 1, 2021 indicated strategic trade positioning occurred during this time frame in preparation for a decline in 2022. This is based on extreme Engrbytrade™ readings from very subtle movements in price during the trading days of May 27, 2021, June 25, 2021, August 4, 2021, August 13, 2021, August 24, 2021, and August 31, 2021.
Similar strategic trade positioning activity appeared between May 9, 2023 and July 31, 2023 where extreme readings were noted on May 9, 2023, May 31, 2023, June 23, 2023, July 19, 2023, July 21, 2023, and July 31, 2023. Based on May – July 2023 readings, the remainder of 2023 is expected to remain volatile followed by a decline in 2024.
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Dow: Mini Dow Futures Update
On July 31, 2023, it was noted that Engrbytrade™ Dow daily derivative related calculations from CBOT Mini Dow futures trading data indicated a topping process was in progress. As of September 5, 2023 two out of three Mini Dow futures signals have been received. It was also observed that an indication of repetitive computer program selling appeared within a four day window of each Mini Dow futures signal. Computer program selling is not an unusual activity, but being so close to each Mini Dow signal should be noted. The following charts show a comparison between the February 2023 to September 2023 structure and the August 2021 and January 2022 structure.
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Bitcoin: British Pound Leading Indicator
As noted on September 3, 2023, futures trading data indicates the British Pound is currently in a similar position to where it was in July 2014. A decline in the British Pound would be expected to coincide with a rise in the U.S. Dollar and a decline in Bitcoin. Bitcoin’s move to lower levels would align with the Bitcoin / Euro Model.
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US Dollar: British Pound Leading Indicator
As of August 29, 2023 futures traders accumulated an extremely large number of positions in the British Pound that are similar to what they accumulated in July 2014. Using this data as a leading indicator the end result of this accumulation is an expectation of a sharp decline in the British Pound, along with a corresponding sharp rise in the U.S. Dollar in 2023 and 2024. Using the 2014 U.S. Dollar structure, a move up to 150 over the next 12 months would be in line with related Fibonacci calculations. This will have a significant deflationary impact on major currencies and commodities in 2023 and 2024.
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Dow: Repeat of 2019 – 2020
The 2023 structure illustrated below indicates Market Makers are trying to repeat the performance of 2019 – 2020. If the current Dow structure continues to follow the 2019 – 2020 pattern and moves above its 161.80% level there is a high probability of a sharp decline.
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S&P500: E-Mini 500 Futures Signal
On May 30, 2023, weekly Engrbytrade™ calculations indicated E-Mini S&P 500 futures trader positions were in an extreme position similar to where they were on September 11, 2007. This has been monitored closely over the last month to see if a structure developed that is similar to what appeared during the last quarter of 2007. The charts below provide a comparison between 2023 and 2007. Additional data will be needed to see if Market Makers and futures traders follow through with another 2007 structure.
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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.
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Bitcoin: Dollar Strength
Daily Engrbytrade™ short term calculations continue to indicate the U.S. Dollar is under accumulation and is expected to move higher, just as it did in 2022. This will drive the value of various products lower, including Bitcoin. On July 6, 2023, it was noted that international bankers, BlackRock, et al., want to drive asset prices lower in order to buy them for pennies on the Dollar. Bitcoin is currently in the final phase of a long term decline that is expected to be a repeat of the Euro’s decline between 1983 and 1985, before moving significantly higher, as shown in the latest Bitcoin model update.
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S&P500: Extremely Large Block Trades
Between August 18, 2023 and August 21, 2023 extremely large block trades were observed crossing the tape for a select group of mega cap stocks in the S&P500. Typically, this action by itself would not be considered for comment, but it was very similar to what occurred between March 15, 2023 and March 16, 2023. Positioning of these trades indicates Market Makers are still expecting to move prices higher.
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Dow: Actual Fibonacci Percentages
On July 27, 2023 it was noted that a brief pullback would be expected before moving higher. On August 12, 2023 change in direction calculations continued to support a move higher. The Dow charts below have been updated to reflect their actual Fibonacci percentages for 2023 and 1987. At this point there is a 7.726% difference in the Fibonacci peak of August 2023 and June 1987.
Between August 7, 2023 and August 17, 2023, numerous large block trades were observed in pre-market trading sessions. Over the last year, this type of trading activity is typically been seen at the market close. It was also taking place during a period of time when the CBOE Put/Call Ratio was moving higher, as shown in the chart below. A move higher is still expected. Note that this expectation could change quickly, just as it did during the last week of August 1987 and first week of September 1929.
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Dow: Change in Direction
Daily Engrbytrade™ Dow calculations discussed on August 6, 2023 were supported with a secondary confirmation in the daily Engrbytrade™ Dow “Change in Direction” calculation on August 8, 2023. A similar change in direction calculation result was received on October 6, 2021.
In addition to this, an observation was made during a review of intraday trading data that Market Makers appeared to be accumulating stock of large cap tech stocks between August 8, 2023 and August 11, 2023, as prices moved sideways during the week.
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Dow: Price Action
Daily Engrbytrade™ Dow calculations show price action relative to volume data on August 4, 2023 is similar to what was developed on December 1, 2021, March 3, 2022 and November 2, 2022. A move upward is expected to continue in August.
Observation: During July 2023 a steady stream of billion dollar trades crossed the tape. Hedge funds and institutions appear to be chasing tech stocks.
Traders Are Risking It All on Bets That Market Boom Will Last
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Dow: Tracking June 1987
The Dow continues to move along its 127.20% Fibonacci level shown in the chart below. A brief pullback is still expected to track with the Dow’s pullback in late June 1987 before moving higher.
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NASDAQ 100: Pennant Forming
While Wall Street traders vacation in the Hampton’s and Federal Reserve members confirm their reservations for the August 24 – 26 Jackson Hole Economic Symposium, markets continue to move higher. The following chart illustrates the formation of a pennant in the NASDAQ 100 index.
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Dow: Mini Dow Futures Signal
Engrbytrade™ Dow daily derivative related calculations from CBOT Mini Dow futures trading data indicate a topping process is in progress. This same process occurred between October 26, 2021 and January 7, 2022 when three separate signals were provided during this time frame as shown in the 2021 – 2022 chart below. Calculations show this process is repeating with two out of three signals occurring on June 13, 2023 and July 25, 2023. A third signal is expected to occur in August 2023, but additional data will be needed to confirm this. If this does occur in August, it would align with expectations noted on July 27, 2023.
Stock charts courtesy of StockCharts.com.
