While the AI bubble sends a small group of tech stocks into a parabolic rise, Fred Hickey notes their valuations are similar to the Dutch tulip and South Sea mania.
Is A Meltdown In Tech Stocks Nearing As Doubts Of A.I.’s Impact Mount? | Fred Hickey
Dow: RSI Review
Although the physical structures shown below are similar, underlying technical indicators provide a relationship as well. The Relative Strength Index (RSI) is one example. A RSI review shows a value of 82.48 for November 24, 1972 and 86.86 for December 19, 2023.
Charts courtesy of StockCharts.com.
Dow: Turning Points
On June 13, 2024 it was noted that the Dow continues to move in a pattern similar to the last half of 2021. To put this into context, the first Dow chart (2024) includes turning points that align with the second chart (2021). The last chart identifies time frames where very large block trades occurred. Note that very large block trading does not necessarily equate to high volume trading days.
“Big blocks at the tops and bottoms of all moves become larger and more frequent depending on the duration and precipitousness of the move.”
Richard Ney, Making it in the Market, 1975, page 89
Charts courtesy of StockCharts.com.
Interest Rates: Decline in Rates
On April 20, 2024 it was noted that futures traders were repositioning trades with the expectation of declining rates. As of June 11, 2024 Non-Commercial traders were in a position similar to where they were on November 27, 2018. A decline in rates is still expected during 2024 and 2025.
Charts courtesy of StockCharts.com.
Gold: Signal Dates
On June 2, 2024, it was noted that structural calculations revealed gold was in a position similar to where it was on March 11, 2020. In addition to this, a review of separate volume related interface calculations indicate a move upward is still expected. Signal dates from this review include March 31, 2020, September 16, 2021, April 22, 2024, and June 7, 2024.
Charts courtesy of StockCharts.com.
Dow: Very Large Block Trades
The Dow continues to move in a pattern similar to the last half of 2021. Within this pattern very large block trades continue to cycle volatility. The last chart is an indication of where these trades occurred.
Charts courtesy of StockCharts.com.
Interest Rates: Daily Trading Volume
The first chart shows abnormally high daily trading volume. This, along with very large block trades continuing to cross the tape, indicates accumulation by Market Makers, hedge funds, etc. In the second chart, history has shown that similar events took place prior to a major stock market decline, such as 2007 – 2008.
Charts shown below are for research purposes only and are not a recommendation.
“By scrapping traditional theory it becomes possible to discover the true order of things, to show how the aspiration of investors can be linked to the aspirations of the specialist as he proceeds to merchandise his stock.”
Richard Ney, Wall Street Gang, 1974, page 88
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Dow: First Week of May
Algorithms appear to be repeating the first week of May 2024. Between May 29, 2024 and June 5, 2024, a series of seven figure block trades crossed the tape at the close. This is very similar to what occurred during the last two weeks of April 2024. It is also similar to what occurred in the futures market between December 1, 2021 and December 6, 2021. The Dow is expected to continue moving higher, as it did in May 2024 until Market Makers start to move very large block trades again.
Charts courtesy of StockCharts.com.
Dow: 1974 Model Perspective Update
The following model perspective update provides key points on the Dow that align with 1971 – 1973 structures. The Dow ultimately hit its low point in late 1974. Based on this update, the Dow currently aligns with mid-January 1973.
Charts courtesy of StockCharts.com.
Gold: Trend Upward
On May 26, 2024 it was noted that gold’s relative value against the U.S. Dollar was in a position similar to where it was on May 4, 2010. In addition to this, daily Engrbytrade™ structural calculations show gold is in a position similar to where it was on March 11, 2020. A pullback is possible, but the trend upward is expected to remain intact in 2024.
Charts courtesy of StockCharts.com.
Admin: Subscriber Registration
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Dow/S&P500: Brief Move Upward
The move on Friday, May 31, 2024 was a culmination of the following factors:
- 7 figure block trades crossing the tape on 5/29, 5/30/, and 5/31/2024
- The Fear and Greed Index being in a position similar to where it was on January 19, 2023.
- No Dow or S&P500 futures gaps in their 5-min charts above the close on 5/31/24
- One small gap remains in the NASDAQ futures 5-min chart on 5/28/24 above 18,942.
A brief move upward is expected before a decline is initiated.
Stock charts courtesy of StockCharts.com.
Dow/S&P500: Repeat of December 2021
It appears Market Makers are starting to step in with very large seven figure block trades again. It could be a repeat of December 2021. If this is the case, Market Makers are in the process of developed a structure that was created between June 2021 and December 2021 in preparation for a larger decline.
Stock charts courtesy of StockCharts.com.
Dow/S&P500: Block Trades
The Dow changed direction three times between March 2024 and May 2024, as shown below. Groups of very large, seven figure block trades were observed during each change in direction. In the sample group of block trades under observation, two large cap tech stocks stood out. Since this sample group was relatively small, there may be other companies that fit this profile. Additional work will be needed to reveal any consistent patterns.
Stock chart courtesy of StockCharts.com.
Gold: Relative Value
Daily Engrbytrade™ calculations indicate gold’s relative value to the U.S. Dollar is currently in a position similar to where it was on May 4, 2010. This is due, in part, to numerous U.S. Congressional spending bills passed between March 2020 and March 2024. As a result of this spending, a move similar to what occurred between 2010 and 2011 is expected.
S&P500: Bearish Engulfing Candle
On May 23, 2024 a bearish engulfing candle pattern occurred. This candle pattern indicates a decline is expected. It is also consistent with previous entries including the Transportation Index Lag, Dow 8.92 Degrees structure, and Move to Dollars.
Stock chart courtesy of StockCharts.com.
Dow: Transportation Index Lag
The Dow Jones Transportation Index typically moves with the Dow Jones and S&P500 indices. There have been periods in the past when the Transportation Index lagged behind other indices, ultimately resulting in a decline of major stock indices. The most recent lag period occurred between October 2019 and January 2020 prior to a significant decline going into March 2020. The charts below currently show a significant Transportation Index lag relative to the Dow Jones and S&P500 indices. A decline is still expected.
Stock charts courtesy of StockCharts.com.
Economy: Big Short 2.0
The following describes a prelude to The Big Short 2.0. Video quality is problematic, but the audio is good. Fraud and corruption are expected to appear this summer.
Are $Trillions Of New Loans About To Be Pumped Into The Housing Market? | Melody Wright
0:00 – Less Home Equity Than Estimated
4:33 – Role of The GSEs
9:23 – Government Holds 85% Of Mortgages Now
13:16 – Does The Market Need More Home Equity Loans?
19:35 – What Are The Biggest Risks Here?
24:12 – Is This A Bad Idea?
34:48 – Is This Setting Up The Big Short 2.0?
41:09 – Melody’s Latest Housing Market Update
Dow: 1929 Trajectory
Taking a closer look at the Dow on a 95 year timeline, the 1929 trajectory shown below is currently in alignment with a move up in mid-2024 prior to starting a decline.
S&P500/Silver: 1973 Structures
On April 17, 2024, a pull back within silver’s ascending triangle was expected. Silver did pull back into May and then continued to move higher. This move is consistent with the 1971 – 1973 silver structure shown below. As silver started to move higher in 1973, the S&P hit its peak on January 11, 1973 and started a decline the following day. The current 2024 structures are expected to continue on a path that is similar to the 1973 structures.
Stock charts courtesy of StockCharts.com.
1971 – 1973
2021 – 2024
Interest Rates: Year 2000
There are two key indications that a repeat of the year 2000 is possible. The first indication is an interest rate reversion angle shown in the following 2020 to 2024 Federal Reserve chart. This angle is similar to what occurred between April 2000 and December 2000. Previous inversions have impacted stock markets to varying degrees.
Another indication is the Buffett Indicator: US Stock Market Value to GDP. This indicator currently suggests the U.S. stock market is strongly overvalued.
Stock charts courtesy of StockCharts.com.
Dow: 8.92 Degrees
Additional research shows Engrbytrade™ daily trade pattern structure calculation charts reflect patterns identified in the following Dow charts. The 2024 angle of support is 8.92 degrees during periods of Exchange Insider distributions. A pattern similar to this occurred during mid-1972 and late 1973 to early 1974 using a support angle of 15.39 degrees. It also occurred between March 2007 and August 2007 with a support angle of 20.03 degrees. Large quantities of stock were distributed during this time frame.
The Stock Exchange abets its specialists’ merchandising strategies by training investors to address their attention to business statistics, economic data, and other concepts that have but limited relevance for investment purposes.
Richard Ney, Wall Street Gang, 1974, page 85
Stock charts courtesy of StockCharts.com.
Economy: Financial Shock – Ed Dowd
Huge Financial Shock Inevitable & Hitting Now – Ed Dowd
Dow: Move to Dollars Continues
On March 22, 2024 Engrbytrade™ daily trade pattern structure calculations indicated a move to dollars was in progress. Daily calculations continue to detect subtle changes in trading patterns that are similar to what occurred between August and October of 2021. In addition to this, corporate insiders continue to sell.
Stock chart courtesy of StockCharts.com.
Dow/S&P500: Promises of Technology
There is no shortage of endless promises of new technology from electric car manufactures. The current descending triangle chart timeline for Tesla is similar to Apple and Intel in 2008.
Note that this information is for educational purposes only and not a recommendation.
Stock charts courtesy of StockCharts.com.
2024 Tesla model 3 commercial
2008 Apple commercial
2008 Intel commercial