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).
Dow: Repeating Trend Lines
Charts courtesy of StockCharts.com.
A review of the 2018, 2019-2020, and 2021 trend lines shown above indicates a significant decline is expected to start by the second quarter of 2021. In the first chart there were 9 trading days between September 21, 2018 and October 3, 2018. In the second chart there were 18 trading days between January 17, 2020 and February 12, 2020. If this pattern continues the Dow should peak above the 2021 trend line in the 3rd chart, pullback and then hit a final peak in April. This pattern would explain the steady accumulation of Commercial Futures Trader short positions in the S&P500 and long positions in the VIX.
Dow: Broadening Formation
Stock chart courtesy of StockCharts.com.
In the February 6, 2021 post (SP500: Broadening Formation) it was noted that an Ascending Broadening Wedge pattern was forming in the SPDR SP500 ETF Trust (SPY). Since that time the SPY has declined to 381.72. Since February 16, 2021, a broadening formation has developed in the Dow, as shown in the chart above. This is also very clear in the Futures market and it is expected to be a prelude to a decline. Underlying positions in the Futures market indicate Commercial Traders are expecting a decline in the Dow and S&P500.
Silver: Short Positions
Current structural calculations indicate Commercial Traders are positioning for a decline in silver this month that is expected to hit 19.48 by March 23, 2021. A long term decline in silver is planned based on the significant number of short positions held by Commercial Traders. The U.S. Dollar is expected to move higher over the next two years and drive metal prices lower.
Dow: Decline Offset
The Senate approved the coronavirus relief bill. This could offset a decline that is expected on Monday, March 8, 2021.
Dow: Sharp Drop
Unless something changes, current price structures indicate a sharp drop in the Dow on Monday, March 8, 2021.
Update: A decline of at least 2.4% is expected on Monday, March 8, 2021.
Gold: Long Term Trend
Stock chart courtesy of StockCharts.com.
The chart above provides some perspective on long term projections for gold. Commercial Trader positions indicate they are in the process of moving gold down to the red trend line. A decline below 1517 (+/- 2%) is still expected. Based on underlying futures trader positions, long term calculations indicate the current trend is expected to be a repeat performance of 2000 to 2011. Note that the trend lines start in the early 1800’s.
Crude Oil: 2021
Calculations indicate the U.S. Dollar is expected to stay in a range that will support a move upward in crude oil during the next nine months.