Intermarket structural analysis research
On October 12, 2024 it was noted that a move up in gold will have to wait. This is based on the completion of a 2016 to 2024 three peak Non Commercial futures trading sequence. In addition to this the 2008 chart structure is similar to the current 2024 chart Fibonacci sequence. At this point a decline is expected in 2025.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Unlike gold, Engrbytrade™ daily and weekly silver calculations are currently not indicating consistent readings where a significant decline would be expected. There are current structural changes related to 2007. The charts below indicate silver is following a path similar to that of late 2007. What would be expected is a change in silver derivatives that reflect a move to the $40 mark in silver. In 2007 it was the $20 mark where investors were lured as Market Makers sold their inventory to the public. What followed was a sharp decline going into 2008.
Market Makers are once again working on the investor’s anticipation of higher prices in order to sell their inventory to the public. This time it would be expected to see a level of $40 in silver before a decline begins in 2025. This type of psychological gamesmanship is explained in Richard Ney’s book, “Making it in the Market”.
Note that this information is for educational purposes only and not a recommendation.
Stock charts courtesy of StockCharts.com.
On December 6, 2023 initial market calculations indicated crude oil was under accumulation. As time progressed, a descending triangle took shape in 2024. Reviewing CVX, it was clear that significant distributions occurred on March 8 and March 9, 2022. This completed Market Maker objectives above the $150 range. Based on the descending triangle in CVX, there is a high probability of a decline.
Note that this information is for educational purposes only and not a recommendation.
Stock charts courtesy of StockCharts.com.
On October 8, 2024 it was noted that Market Makers took deliberate steps to follow the 2021 Dow chart structure. It also appears they are using algorithms, intentionally or not, to reproduce mathematical relationships with the 2018 Dow chart structure. The Dow’s intermarket relationship with Non-Commercial Trader 10-Yr Note interest rate positions indicates Market Makers are expecting a stock market decline.
Note that this information is for educational purposes only and not a recommendation.
Index charts courtesy of StockCharts.com.
On September 17, 2024 it was noted that after four years of economic stimulus packages gold was expected to move higher. A detailed review of Non-Commercial Gold Futures Trader positions revealed that, at this point, a move up will have to wait. Gold is currently in the process of completing a 2016 to 2024 three peak Non Commercial futures trading sequence (Points 4, 5 and 6) shown below. This sequence is similar to what occurred between 2009 and 2011. After 2011 a decline continued until 2020 when economic stimulus packages were once again issued to bail out the economy.
Note that this information is for educational purposes only and not a recommendation.
Gold charts courtesy of StockCharts.com.
On September 26, 2024 it was noted that active money managers were reducing their equity exposure. As of October 9, 2024, it appears they are reluctant to take on additional risk. With an October 9th NAAIM Index reading of 90.26 and Fear & Greed Index reading of 72, there is a low probability of equity managers accumulating a significant amount of risk assets. On October 19, 2022 and November 15, 2023 equity managers did have some room to the upside to accumulate additional risk assets. At this point it will not take much to move the Fear & Greed Index into its Extreme Greed category. To take advantage of this situation, Market Makers may raise equity prices quickly to distribute stock and sell short.
Fear & Greed Index readings relative to the following chart.
Point 1 – October 19, 2022 = 37
Point 2 – November 15, 2023 = 67
Point 3 – October 19, 2024 = 72
On May 13, 2024 it was noted that the angle of support was 8.92 degrees during periods of Exchange Insider distributions. This same angle supported the Dow during 2021 and 2024. On August 5, 2024 the 16.83 degree upper trend line was added. As of October 8, 2024, the Dow has developed to a point where it is similar to its 2021 chart structure.
It appears Market Makers have taken deliberate steps to follow the 2021 chart structure. There is a high probability the Dow will repeat the initial 2022 chart structure pattern with a decline starting this month.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Since the Fed rate cut on September 18, 2024, Non-Commercial Traders have continued to increase their 10-Yr Note short positions. Non-Commercial Traders are expecting the value of the 10-Yr Note to decline as rates move higher. Ultimately rates will move lower as they did in 2007. This aligns with similar positioning of the Dow and S&P500 during the second week of October 2007.
At first glance it would seem Non-Commercial Traders are on the wrong side of the trade. The reality is they will chase this trade until the last minute and quickly unwind their short positions as the value of the 10-Yr Note moves higher.
Note that this information is for educational purposes only and not a recommendation.
Interest Rate charts courtesy of StockCharts.com.
There has been some discussion on rate cuts of September 18, 2007 and September 18, 2024. The 10-Yr Note rate is expected to decline between October and December 2024, as noted on September 28, 2024. Timing of the Dow would align with a 10-Year Note rate decline between October and December 2024. Charts provide below give some perspective on the Dow’s structure as it moves into October. Additional data will be needed to confirm a decline in the Dow.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
There is a 70% chance of a sharp decline in the 10-Yr Note rate before the end of 2024. This is based on the 2024 descending triangle that is similar to what occurred in 1982 and 2000. The reasons for each of the previous declines varied, but the end result was the same.
The latest 10-Yr Non-Commercial Trader Net chart is attached. In this chart the 10-Yr Note rate positions are near an extreme level, just as they were in 2018. The difference between the two extremes is the chart formations used during the topping process. In 2018 an ascending broadening formation was used. In 2024 a descending triangle is developing. The end result is both have the same goal of dropping rates.
Note that this information is for educational purposes only and not a recommendation.
Interest Rate charts courtesy of StockCharts.com.
On September 21, 2024 it was noted that the NAAIM Weekly Exposure Index revealed a repetitive pattern along a 17.33 degree trend line. It also noted that if the NAAIM index moved above the red trend line, markets would trend higher. As of September 25, 2024 the index dropped to 86.64. This indicates active money managers are reducing their equity exposure. It also indicates a higher probability of stock markets declining, as they did in October 2023 before moving higher.
Note that this information is for educational purposes only and not a recommendation.
There are standard technical indicators that provide some insight into the direction of markets. Engrbytrade™ utilizes one technique of chart structure analysis during the course of specific time frames. TLT is an example. The basic TLT chart structure created between July 2006 and September 2007 is similar to the chart created between October 2023 and September 2024. The underlying difference between the two at this point is that the Fed cut rates in August and September of 2007. The first rate cut in 2024 occurred on September 18, 2024.
The Fed dropped their Fed Funds rate from 5.26 to 5.02 on August 17, 2007 in response to the subprime lending crisis and market instability. On September 18, 2007 the Fed Funds rate dropped from 5.02 to 4.94 in response to the mortgage meltdown.
The first rate cut in 2024 occurred on September 18, 2024 when they dropped the target range to 4-3/4 to 5 percent. No clear reason was given, other than inflation dropping to 2.5% in August. Dropping their target range for the federal funds rate means something big is brewing in the background. Expect another rate cut on November 7, 2024.
Note that this information is for research and educational purposes only. It is not a recommendation.
On September 24, 2024, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities. Figure 18 on PDF page 42 shows precious metals derivative contracts held by Insured U.S. Commercial Banks and Savings Associations. The banks continue to move into precious metals contracts.
Note that beginning January 1, 2022 the largest banks were required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk (SA-CCR). Gold derivatives were considered precious metals derivative contracts rather than an exchange rate derivative contract, resulting in an increase in reported precious metals derivative contracts compared.
Note that this information is for educational purposes only and not a recommendation.
On August 17, 2024 it was noted that the 10Yr Note rate dropped from 4.52 to 3.88 without a Fed rate cut. Since that time the Effective Fed Funds Rate was lowered by 0.5% on September 18, 2024. This action is a repeat of the Fed dropping rates on September 18, 2007 . A repeat of 2007 would lead to a select group of stocks making a rapid move upward before peaking in October 2024. To put this into context, seven figure blocks have been crossing the tape since September 18, 2024. This type of trading would be managed by Market Makers. It is expected that Market Makers and computer algorithms will drive retail investors to continue buying on the way up. Watch financial channels promote the fear of missing out.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Something that should not be overlooked is the NYSE New 52-Week Highs chart. It appears that Market Makers are in the process of selling as Retail Investors continue to buy. Over the last two years this has been a consistent contrarian indicator.
“….it is not demand that causes rising stock prices but rising stock prices that cause demand.”
Richard Ney, Making it in the Market, 1975, page 88
Note that this information is for educational purposes only and not a recommendation.
Chart courtesy of StockCharts.com.
On September 2, 2024 it was noted that the NAAIM Weekly Exposure Index revealed a repetitive pattern along a 17.33 degree trend line. The index hit a key point on September 18, 2024, as shown below. If the NAAIM index moves above the red trend line, then stock markets would be expected to trend higher.
Note that this information is for educational purposes only and not a recommendation.
After the Fed interest rate announcement on September 18, 2024 at 2:00 p.m. ET, the Dow moved to a high of 41,981.97. A review of block trades during this time revealed a majority of trades were conducted by retail traders and computer algorithms. The end result was a long tail candle for the day, which typically signals a reversal.
It should also be noted that the Dow continues to follow its 16.83 degree upper trend line, as shown below. A decline going into October 2024 is still expected.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
On July 10, 2024 it was noted that the current gold pattern was similar to that of the late 1970s. After four years of economic stimulus packages gold will move higher. The reason for this rise was explained in the Silver Ascending Triangle article posted on December 24, 2022. This move upward is expected to go parabolic, as it did in 1979.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
2020 – 2024
1975 – 1979
On September 2, 2024 it was noted that the NAAIM Weekly Exposure Index revealed a repetitive pattern. If the NAAIM Index pattern continues as it did in 2022 and 2023, another rally would be expected going into the end of 2024.
Note that this information is for educational purposes only and not a recommendation.
Chart courtesy of StockCharts.com.
On August 9, 2007 George Bush gave a press conference on the economy. He provided the following key points that sound similar to recent economic related comments from the White House.
“Fundamentals of our economy are strong..”
“..job creation is strong..”
“..real after tax wages are on the rise..”
“..inflation is low..”
“..the global economy is strong..”
“..there is enough liquidity in the system..”
Clip from Bush’s Press Conference on 8-9-07
On July 20, 2024 Engrbytrade™ intermarket futures trading data calculations identified a series of key Commercial Trader British Pound positions in 2023 and 2024. This indicated the Dow, S&P500, and NASDAQ would repeat their performance of 2008. Currently the British Pound is repeating a peak that was formed in late October and early November 2007. Based on this data, stock markets are expected to have a significant decline in 2025.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
On September 13, 2024 it was noted that the S&P500 candlestick on September 11, 2024 was similar to the January 24, 2022 candlestick. A review of the following 1-hour charts provided additional Fibonacci expectations that 2024 would be very similar to 2022. The Dow is currently expected to move up to the 1.68 level before moving lower.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Engrbytrade™ Daily Trade Pattern Structure Calculations show the candlestick on September 11, 2024 has similar candlestick characteristics as the one on January 24, 2022. A brief move to the upside is expected for computers and Market Makers to distribute their inventory to retail investors.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
Between July 31st and August 1st 2024 the S&P500 Utilities Sector Bullish Percent Index moved up to 96.67. There was a brief decline during the beginning of August. Then it moved up to 96.67 again between August 14, 2024 and September 3, 2024.
Previously, the Utilities Sector Bullish Index moved up to 96.55 during August and September 2022. This was followed by a sharp decline in the Utilities Industry Group Index
The current bullish reading of 96.67 indicates the Utilities Industry Group Index is overvalued.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
