As noted in the Dow post on May 22, 2021, the Dow has developed a structure similar to the January 24, 2020 to February 4, 2020 structure. The target for the peak of this rising wedge is 34,986 (+/- 1%) by June 2, 2021 (+/- 1 trading day).
Gold: 2011-2021
Chart courtesy of StockCharts.com.
Additional data indicates a decline in gold is expected after reaching the 61.8% retracement level shown in the weekly chart above. This is based on calculations showing: 1) Commercial Traders positioning for a decline, 2) Non-Commercial Traders accumulating significant long positions as well as their sentiment that gold prices will continue much higher, and 3) the position of gold against its current relative value with the U.S. Dollar. This also aligns with the post on May 22, 2021 noting that the Dollar is being positioned for a move higher in 2021.
Dow: Dow Rise vs Dollar
As noted in the SP500 post on May 20, 2021, the Dow is also developing a structure similar to the January 24, 2020 to February 4, 2020 structure. As this continues into June 2021, it should be noted that the Dollar is being positioned for a move higher in 2021 as a stock market decline is initiated by international bankers to drive the dollar higher, just as they did between July 2008 and March 2009.
Gold: Short Positions
As with silver, calculations continue to indicate Commercial Futures Traders hold significant gold short positions with the expectation of a decline. There is a 60% chance gold will have a repeat performance of the May-November 2008 decline based on Dow key events discussed in the May 12, 2021 post. Using the 2008 decline model would take gold down to 1424 (+/- 1%) prior to moving higher as it did between 2009 and 2011.
Silver: Trader Positions
Currency and silver calculations continue to indicate Commercial Futures Traders are positioned to take advantage of a decline in silver. As a minimum, silver is expected to reach 19.42 by November 2021. In addition to this, there is a 60% chance silver will have a repeat performance of the May-November 2008 decline based on Dow key events discussed in the May 12, 2021 post. This is also based on the large number of Non-Commercial Futures traders long silver positions in place relative to its current value against the Dollar, British Pound, Swiss Franc, etc. If these positions stay in place or increase, a decline to 8.32 would be expected by November 2021.
Bitcoin: Decline Continues
Calculations indicate a decline is expected to continue just as it did in early 2018. Bitcoin’s structural design from December 2017 to April 2021 is similar to that of December 2014 to December 2017. Commercial Futures Traders still hold a significant number of bitcoin short positions relative to its value against the Dollar. Since bitcoin started trading in 2010, it is unknown what the impact will be with a substantial decline in the Dow, as discussed in the May 12, 2021 post. This may explain why Goldman Sachs set up crypto currency trading desk for their wealthy clients.
Dow: Proportional to 2008
As noted on April 16, 2021, the following key events occurred between June 2007 and June 2008. They also occurred during the last six months.
- Non Commercial Futures Trader short positions peaked in U.S Treasury Bonds
- Long term engrbytrade calculations indicated Copper was near its peak value against the U.S. Dollar
- A 40% retracement in the 10-Yr note occurred on October 15, 2007
In addition to the items noted above:
- Today, the following news article noted a 4.2% increase in the Consumer Price Index. This is the sharpest increase since September 2008.
Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008
- Engrbytrade calculations indicate SP500 futures trading reporting firms, currency traders, and bond traders are hedged for a decline in the Dow, SP500 and NASDAQ.
- S&P 500 Index vs Margin Debt Year over Year percentage change is above 55%, just as it was in 2000 and 2007.
See:
Zerohedge: Froth
Finra: Margin Statistics
A decline in the Dow, starting in May, is expected to be proportional to the decline between May 2008 and October 2008. This is based on Dow structures developed between January 2018 and May 2021.
Dow: Extreme Market Peak
Stock allocations are hitting historic highs as stocks push an extreme market peak. Calculations show the middle of this quarter (Monday, May 17, 2021) to be a turning point.
Dow: Tracking January 2020
The current one hour Dow futures chart structure discussed on April 22, 2021 continues to track with the one hour chart developed between 8:00 p.m. on January 7, 2020 and 8:00 a.m. on January 24, 2020. Based on the structure developed between April 16, 2021 and April 30, 2021 the Dow futures chart is expected to start a move down to 32,100 (+/-1%) by May 28, 2021.
Dow: Dow vs Lumber
Stock chart courtesy of StockCharts.com.
An 11.88 degree 51 year channel upper trend line for Lumber was broken in January 2021 with a move upward to a peak on April 20, 2021. This move started a new upper external channel that is expected to confirm the current peak forming in the Dow. The upper external channel peak in Lumber hit a high of 1374.7 and is expected to be an inverse of a decline through the lower external channel that was confirmed when lumber hit a low of 139 on January 14, 2009. If the new external channel upper trend line holds, a peak in the Dow is expected by June 17, 2021.
Dow: Repeating Structures
The one hour Dow futures chart structure developed as a rising wedge between 2:00 p.m. on March 4, 2021 and 6:00 a.m. on April 22, 2021 appears to be similar to the one hour chart developed between 8:00 p.m. on January 7, 2020 and 3:00 p.m. on January 20, 2020. Both structures completed 84% of their rising wedge. This indicates the Dow futures chart is now expected to start a move down to 30,810 (+/-1%) by May 31, 2021.
Silver: Decline Continues
Currency and silver calculations indicate Commercial Futures Traders are positioned to take advantage of a steady decline in silver. Silver is expected to reach 19.42 by November 2021.
Dow: Long Term Range
Within fifteen minutes of the market open on April 16, 2021, the Dow moved into a long term range between 34,160.97 and 34,445.86. This range represents the completion of a significantly larger structure that is similar to what was developed between October 10, 2002 and October 11, 2007.
Key underlying events that occurred between June 2007 and June 2008 include the following;
- Non Commercial Futures Trader short positions peaked in U.S Treasury Bonds
- Long term calculations indicated Copper was near its peak value against the U.S. Dollar
- A 40% retracement in the 10-Yr note occurred on October 15, 2007
The same three events have taken place over the last six months. This indicates a large, long term decline could take up to three years to complete with the Dow eventually falling below 6000.
Silver: Overnight Peak
Based on calculations related to the British Pound, silver is still on track to decline with the stock market. A peak is expected in the overnight markets between April 13, 2021 and April 14, 2021.
Dow: Sell Programs
The one hour Dow futures chart structure developed between April 5, 2021 and April 8, 2021indicates Market Makers are planning on a decline to start by Tuesday, April 13, 2021 (+/- 1 trading day). This decline is expected to continue until April, 30, 2021.
Dow: Rising Wedge Top
As of 12:37 p.m. (EST) on April 5, 2021, the Dow hit a high of 33503.5 in the futures market. It appears the Dow has hit its’ peak based on the rising wedge top and current algorithm in progress. A decline similar to the October 10, 2018 to October 29, 2018 is expected.
Dollar: Moving Higher
In the March 1, 2021 post it was noted that calculations indicate global currencies, such as the Australian Dollar, British Pound, Canadian Dollar, and Euro are expected to retest their previous 2020 lows by early 2023 as the U.S. Dollar moves higher. On April 5, 2021 Goldman Sachs finally closed its recommendation for shorting the dollar.
Dow: April Rising Wedge
The change in algorithms noted on March 30, 2021 has developed into a rising wedge structure in the futures market. The Dow is expected to reach 33560 (+/- 1%) in the overnight market between April 5, 2021 and April 6, 2021.
Dow: Algorithm Changes
After the close on Monday, March 29, 2021, the predicted model of futures price structure algorithms changed dramatically. This occurred after a tense day of volatility, margin calls, and calculations of big bank losses. It appears that plans have changed with an accelerated schedule to start a decline this week.
Gold: Current Price Structure
The current daily price chart structure developed between August 7, 2020 and March 18, 2021 is 2.52 times longer in duration than a similar structure that was constructed between August 26, 2019 and November 20, 2019. Based on futures trader positions and expectation of a sharp decline in the Dow by May 5, 2021, gold is expected to follow the pattern of the 2019 price structure. A move up to 1950 prior to dropping to 1517 (+/-2%) would align with the March 3, 2021 post.
Silver: Adjustments
Adjustments in commercial trader positions and the price structure show silver moving above 29.00 by April 12, 2021 prior to falling to 21.00 by April 16, 2021.
Dow: Hourly Charts
The algorithm(s) that ran between 6:00 p.m. (EST) on January 16, 2020 and 09:00 a.m. (EST) on January 24, 2020, as illustrated on a one hour chart, is very similar to the hourly chart developed between 10:00 p.m. on March 17, 2021 and 4:00 p.m. on March 26, 2021. This would indicate that a short decline is expected between March 29, 2021 and April 1, 2021. Another peak would follow with a very sharp decline going into May 5, 2021 (+/- 1 trading day).
Bitcoin: Bitcoin vs Dollar
On January 4, 1971 the EuroUSD index started trading with an opening value of 0.5353. By December 3, 1979 the EuroUSD index hit a high of 1.1418 before starting a decline in January 1980. Thirty-nine years after the EuroUSD index started trading, the BTCUSD (Bitcoin/USD) index started trading on July 19, 2010 with an opening value of 0.08584. It has taken Bitcoin 11 years to develop a structure that is similar to the EuroUSD that ran from 1971 to 1980. As the Dow, S&P500, and Nasdaq start their long term decline in 2021, the value of the U.S. Dollar will rise just as it did between 1980 and 1985.
It was noted in the March 1, 2021 post that calculations indicate global currencies, such as the Australian Dollar, British Pound, Canadian Dollar, and Euro are expected to retest their previous 2020 lows by early 2023 as the U.S. Dollar moves higher. Bitcoin is also expected to have a significant decline for several years, similar to what occurred with the EuroUSD index between 1980 and 1985.
Dow: 2022 Crash
Stock charts courtesy of StockCharts.com.
What occurred between May 2007 and May 2008 has been replicated on a large scale between January 2018 and March 2021, as shown in the charts above. Based on the 2007-2008 structure, calculations indicate a major market crash similar to October 2008 is expected to start on September 9, 2022.
Silver: Short Positions Update
The short term silver price structure from June 28, 2011 to September 13, 2011 is similar to the price structure from November 30, 2020 to March 9, 2021. Commercial Futures Traders silver short positions on March 9, 2021 were 8% higher than they were on September 13, 2011. This post updates the March 7, 2021 entry (Silver: Short Positions) to indicate Commercial Traders are positioning for a decline in silver this month that is expected to hit 19.48, by March 30, 2021 (+/- 1 trading day).