Intermarket futures trading data confirms crude oil has started a long-term decline based on underlying data from related petroleum products and currencies. This decline is expected to be similar in nature to previous declines that include August 28, 2013 to February 11, 2016 (2 years 5 months 14 days: 897 days) and October 3, 2018 to April 20, 2020 (1 year 6 months 17 days: 565 days). The end result will be a return to the 1986 and 1998 base level of 10.80 after a period of decline that can take as long as 2 years.
Dow: March 2022
When the Senate approved a Continuing Resolution it deferred the start of a market decline noted on November 30, 2021 to the first quarter of 2022. This approval action aligns with the 1929 peak structure and would place a Dow peak near 38,000 by March 2022. Pending any further action by Congress or the Fed, a significant decline would follow the March peak. Daily engrbytrade™ Dow calculations will track the progress of this move.
Dow: Closing Gaps
Daily engrbytrade™ Dow calculations confirmed the Dow is expected to move higher as noted on November 27, 2021. This move up is expected to reach 35789 on the 5 minute futures chart for the purpose of closing various gaps created between November 25, 2021 and December 1, 2021. It has also been observed that very large block trading (>1M) is limited.
Dow: 2018 4th Quarter
In addition to the non-existent accumulation of very large block trades on Monday, November 29, 2021, futures trading data calculations indicate a 2018 4th quarter decline is expected to start between December 3, 2021 and December 15, 2021.
Dow: Limited Accumulation
Daily engrbytrade™ Dow calculations indicate a retracement to 35782 in the futures market is expected prior to moving lower. This retracement structure would be similar to what occurred between September 21, 2021 and September 27, 2021. It appears that a limited number of very large blocks were accumulated during the sharp decline on November 26, 2021.
Dow: 83% Update
On November 1, 2021 the Dow: 83% post noted that the Dow would start a decline on November 8, 2021. Congress passed the $1.2 trillion infrastructure bill on November 6, 2021. This was followed by the Dow peaking on Monday November 8, 2021 with a new all-time high while a significant number of very large block trades occurred between November 8, 2021 and November 9, 2021. Prior to this move, daily engrbytrade™ Dow calculations shifted to indicate the Dow will continue developing a declining structure. The chart shown below provides an update to the rising wedge discussed on November 1, 2021. As of Friday, November 19, 2021 the Dow landed on the 83% mark and is expected to continue moving lower.
Stock chart courtesy of StockCharts.com.
Interest Rates: 10Yr Move to Zero
Additional futures trading data revised 10Yr note interest rate structural calculations. This update indicates the 10Yr note interest rate is currently positioned to repeat a decline that is similar to what occurred between November 9, 2018 and September 3, 2019. A move to zero is expected by the third quarter of 2022.
Stock chart courtesy of StockCharts.com.
Dow: 1929 vs 2021 Peak
The Dow hit an all-time high of 36565.73 on November 8, 2021. Prior to reaching this peak, calculations indicate the Dow repeated a unique set of daily structures similar to what occurred between July 29, 1929 and the peak on September 3, 1929. Daily Engrbytrade™ Dow calculations indicate the Dow will continue to develop a declining structure similar to what occurred between September 11, 1929 and October 4, 1929. The current decline is expected to continue into mid-December 2021.
Dollar: Year End
As noted on August 1, 2021, futures trading data calculations indicated a rise in the US Dollar during the remainder of 2021. This rise is expected to continue going into the end of 2021.
Dow: Debt Limit
Daily Engrbytrade™ Dow calculations and large block trade patterns continue to indicate a decline is expected to occur. Additional data shows this decline will follow Treasury debt limit concerns going into mid-December.
Dow: Mid-November Decline
Daily Engrbytrade™ Dow calculations indicate a brief mid-November decline will take place before moving higher. This move is expected to be similar to what occurred between May 10, 2021 and May 19, 2021.
Economy: Trade Deal Expiration
On January 15, 2020 China signed an Economic and Trade Agreement with the U.S. Within 30 days of signing this agreement, the Dow started a sharp decline on February 13, 2020. This was just one day before the trade agreement went into effect, as noted in the following article.
US-China phase one tracker: China’s purchases of US goods in 2020 and 2021
This trade agreement expires on December 31, 2021. Watch for a stock market decline to start in January 2022.
Dow: Calculation Update
Based on Congress passing the $1 trillion infrastructure bill and upcoming $1.75 trillion “Build Back Better Plan”, structural calculations indicate the Dow is expected to reach 38,610 (+/- 2.5%) before moving lower.
Dow: $1 Trillion Infrastructure Bill
On November 5, 2021 the House passed a $1 trillion infrastructure bill. This last minute approval provides Wall Street with the means to complete a 1929 peak. Calculations will be revised as needed to incorporate this change.
Disclaimer
Dow: Transports Leading Indicator
On November 2, 2021 the Dow Jones Transportation Average Index hit an all-time high of 18,246.51 with a significant number of large blocks trading during the day. Tuesday’s candlestick formation is typical for a market that is peaking.
Stock chart courtesy of StockCharts.com.
Dow: 83%
Over the last three years, one key trait of the Dow (and S&P500) that stands out has been the rising wedge format with a consistent drop point on the 83% (+/-1%) mark, as shown below. The Dow is expected to peak by November 4, 2021 (+/- 1 trading day) followed by a sharp decline starting the week of November 8, 2021.
Stock chart courtesy of StockCharts.com
Crude Oil: 2023
Long term preliminary intermarket futures trading data indicates crude oil is completing a topping process based on underlying data from related petroleum products and currencies. A volatile decline is expected to last as long as 2 years before reaching a level below 20.00 by 2023. Additional data will be needed during the remainder of 2021 to clarify this expected outcome.
Bitcoin: Accumulation Period
Based on intermarket futures trading data calculations, bitcoin’s current value has moved below Futures Traders expectations relative to the U.S. Dollar. A similar situation occurred when the U.S. Dollar moved higher between January 2018 and December 2018. A long term accumulation period for Bitcoin started in December 2018 and continued until May 2020. Bitcoin is starting another accumulation period, as observed during the last week of October 2021, and is expected to continue moving higher over the long term.
Dow: Turning Down
Daily calculations indicate the Dow is completing its move through the rising wedge discussed on October 25, 2021 and initiating a process to start a decline. This decline is expected to move the Dow back down to 33,613 (+/-1%) using a structure similar to what was developed between June 1, 2021 and June 18, 2021.
Dow: 1989 Nikkei 225
On December 29, 1989 the Nikkei 225 hit a peak of 38,957. Thirteen years later it was below 8,000. It should be noted that the Nikkei 225 parabolic move from 1960 to 1989 looks similar to the Dow parabolic move from 1990 to 2021.
Dow: October Rising Wedge
As noted on October 20, 2021, large block distributions have been observed each day. This is very similar to what occurred between June 21, 2021 and August 16, 2021. This trend upward is expected to be complete by October 28, 2021.
Stock chart courtesy of StockCharts.com.
Interest Rates: Year End Decline
Futures trading data calculation results have moved outside of a statistical range that has not been seen since March 22, 2005. By December 31, 2021 the 10yr note rate is expected to hit 0.4% as the 30 year bond interest rate drops below 1.0%.
Dow: Daily Calculation Changes
History shows that a stock market collapse is expected to follow Blackstone’s next major effort to launch an IPO for Building Materials Europe BV in 2022. It is also expected this IPO could be pulled back into 2021 in order to line up with interest rate hikes, and the Fed’s scaling back of central bank bond purchases. The reason for a 2021 IPO is based on the following:
1. The Blackstone Group $4.133 billion IPO occurred on June 21, 2007 prior to a long market decline and collapse going into 2009.
2. Blackstone was involved in the Aramco IPO which was accelerated to start trading on December 11, 2019, just before the 2020 stock market collapse. Gary Quin (North Atlantic Acquisition Company) helped Blackstone with the Aramco IPO.
Other short term planning elements include:
1. On September 23, 2021 it was reported that Jerome Powell said the central bank could begin scaling back asset purchases as soon as November 2021 and complete the process by mid-2022.
2. Bank of England policymaker Michael Saunders made an announcement to get ready for “significantly earlier” interest rate rises due to inflation pressure.
3. Goldman Sachs is expecting a huge market melt-up in the coming weeks.
4. Distributions continue, as it appears central bankers, investment bankers and investment management firms are coordinating a final move similar to what occurred between August 13, 1929 and September 3, 1929.
5. Engrbytrade™ daily Dow calculations indicate a shift has occurred that would support a move similar to that of March 4, 2021 to April 12, 2021. This move would allow the Dow to hit 38,000 in a very short period of time and align with the original Engrbytrade™ perspective.
Update note:
It looks like Blackstone found a way to leverage $1.2 billion before markets reach their peak.
https://www.reuters.com/article/marketsNews/idUSL4N2RG3H0?il=0
Interest Rates: Bank of England
On October 9, 2021 Bank of England policymaker Michael Saunders made an announcement to get ready for “significantly earlier” interest rate rises due to inflation pressure. The timing of this announcement is similar to that of September 26, 1929 when the Bank of England raised its discount rate from 5.5 to 6.5% just prior to the 1929 stock market crash.
Silver: Structural Changes
Stock charts courtesy of StockCharts.com.
Futures trading data calculations indicate the silver structure shown above has taken on characteristics of the January 2011 to April 2013 silver structure. Silver is still positioned for a decline as it moves through the descending triangle shown above. Based on structural calculation changes silver is expected to move down to $18.81 (+/- 5%) before the end of 2021.
All that is need now is for the Fed to stop buy bonds and the Bank of England to start raising interest rates.