Today, shortly after 8:00 a.m. (EST) when an announcement of a deal with the Senate infrastructure group was made, Dow algorithms were modified from a structural decline similar to that of March 2020 to a retracement structure found between November 27, 2007 and December 10, 2007. A decline is expected with a move down in the futures market to 31,712 (+/- 1%) by August 4, 2021 (+/-1 trading day).
Dow: 2021 Collapse
Data structures developed as of today indicate the Dow is expected to decline to 30,538 (+/- 1%) by July 15, 2021. These same structures are also following a path that is similar to 2008. Based on existing structures and current timeline, there is a 90% chance stock markets will collapse in October 2021.
Dow: Within 1% of 33,818
The Dow moved up to within 1% of 33,818 as noted this morning at 4:44 a.m. (EST). A move to a significantly lower level is expected to start by Wednesday, June 23, 2021. Structural data will be reviewed prior to this move.
Dow: Retracement Upward
On June 19, 2021 it was noted that based on algorithm adjustments the Dow would move down to 32,756 (+/- 1%) by Monday, June 21, 2021. On June 20 at 11:00 p.m. the Dow hit a low of 32,903 and was within the applicable 1% range. A retracement upward to 33,818 (+/- 1%) is expected by Thursday, June 24, 2021 before starting a move to significantly lower levels.
Dow: Key Markers
As the Dow continued its decline on Friday, key markers were noted within its futures market structure that had similar attributes to the February 24, 2020 to February 27, 2020 decline. At this point algorithm adjustments for this decline are expected to take the Dow down to 32,756 (+/- 1%) by Monday, June 21, 2021 before starting a retracement move upward.
Dow: Decline Adjustment
Intraday volatility on June 17, 2021 provided additional data for an adjustment to include an initial drop to 30,781.7 (+/- 1%) by June 22, 2021 (+/- 1 trading day) followed by a retracement up to 32324 (+/- 1%) before ultimately falling to 25,653.
Dow: Decline Accelerating
Based on current model calculations, the Dow’s decline is accelerating and is expected to reach 29,800 (+/- 1%) by June 22, 2021 (+/- 1 trading day).
Silver: Deflationary Forces
Currency and silver calculations continue to indicate a decline in silver. With the Federal Reserve’s discussion today of raising interest rates by the end of 2023, this confirms their intent to strengthen the U.S. Dollar. It also aligns with a peak in the price of silver against the British Pound and Canadian Dollar, as discussed in the Silver post on May 16, 2021. A repeat performance of October 2012 to December 2015 is expected where significant deflationary forces will drive the price of silver much lower over the next three years.
Gold: Deflationary Forces
On June 8, 2021 it was noted that a move up in gold to 1942.50 was expected prior to turning lower. With the Federal Reserve’s discussion today of raising interest rates by the end of 2023, this confirms their intent to strengthen the U.S. Dollar. It also aligns with a peak in the price of gold against the British Pound and Canadian Dollar, as discussed in the Gold post on June 5, 2021. At this point gold is expected to have a repeat performance of October 2012 to December 2015 where significant deflationary forces will drive the price of gold much lower over the next three years.
Dow: Model Reference Point
As of 1:00 p.m. (EST) today the Dow one hour futures chart structure is in a relatively similar position to the one hour model structure that appeared on February 20, 2020 at 8:00 p.m. The Dow is still expected to continue moving lower.
Dow: June Descending Triangle
Note that in the futures market a descending triangle was started on June 3, 2021.
Crude Oil: May 2018
Preliminary futures trading data structural calculations indicate an algorithm is moving Crude Oil (WTI) within a structure that is similar to what was developed in 2018. At this point current pricing is in the same relative position as it was in May 2018. If this trend continues, crude will align with a sharp decline expected between October 2021 and December 2021. Additional data will be needed over the coming weeks to confirm this.
Gold: Decline in 2021
In the futures market, a move up in gold is expected to reach 1942.50 (+/-1%) prior to turning lower. Based on intermarket futures trading data calculations, a decline is planned for the next several months with the goal of reaching 1424 (+/- 1%).
Dow: Exhibit 1
It has become increasing clear to some investment management firms, such as Morgan Stanley, that stock markets have hit their peak. Exhibit 1 in the following Zerohedge article illustrates this.
“We Took Out The June 2007 Highs”: Morgan Stanley’s Sell Signal Just Hit An All Time High
This aligns with the engrbytrade SP500 entry on June 5, 2021 describing an expected decline.
Gold: Position of Gold
On May 25, 2021 it was noted that the position of gold against its current relative value with the U.S. Dollar was part of a calculation indicating a decline in gold is expected. In addition to the U.S. Dollar calculation, the position of gold to the British Pound and Canadian Dollar are now showing a 90% chance that gold will decline. The last time this occurred was in September 2012.
Dow: Structure Completion
The Dow futures structure developed during the past 9 trading days is nearing completion. If the algorithm continues as planned a decline is expected to start on June 8, 2021 (+/- 1 trading day). The Dow moved within the target range of 34,986 (+/- 1%) on June 1, 2021 as noted on May 27, 2021.
Dow: Hit 1% Target Range
The Dow hit 34,639 at 5:20 a.m. in early futures market trading based on the 34,986 (+/- 1%) [34,637 to 35,335] target calculation noted on 5/26/21.
Dow: Indication of a Top
Algorithms appear to have been initiated, modified, or deactivated over the past two trading days. This provided a futures market structure that is similar to what was developed between 3:00 p.m. on January 31, 2020 and 3:00 p.m. on February 12, 2020. The current structure runs between 10:00 a.m. on May 19, 2021 to 8:00 a.m. on May 27, 2021. This indicates a top was hit today. There is a 10% chance the Dow will move to 34, 986 (+/- 1%) as discussed on May 26, 2021.
Dow: Rising Wedge Peak
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.