The Dow is expected to close higher today before starting a bear market with a steady decline going into 2022.
Dow: Realigned Expectations
The bond market has realigned expectations for the Dow. A decline has started and the Dow is expected to reach 19,642 (+/-2%) by April 14, 2021. Volatility will continue to increase.
Dow: 2021 vs 2007
Based on the historic size of 30-Yr Bond short positions held by futures traders, structural timing calculations indicate the Dow is expected to hit its peak this week prior to turning lower. Futures traders were in a similar situation prior to the Dow peaking in October 2007.
Gold: Long Term
Stock charts courtesy of StockCharts.com.
Underlying gold trader positions along a 30 year timeline indicate futures traders are adjusting their positions at a faster pace than what occurred between October 1999 and April 2001. The falling wedge formation shown above provides an illustration that a long term low is near. The decline discussed on February 6, 2021 is still expected to occur and should be brief, as it was on February 16, 2001, prior to moving significantly higher over the long term.
Dow: Time is Short
On a 15 minute Futures chart for the Dow Jones index, it appears that February 17, 2021 at 19:30 (7:30 PM EST) is the equivalent of February 19, 2020 at 19:00 (7:00 PM EST). Time is short. If this thesis is correct, a decline has started and the Dow is expected to reach 26,892.10 (in the Futures market) by Friday, February 26, 2021. After this decline there will be a brief rally, followed by an even larger decline.
Dow: February Decline
In the Futures Market, it appears that the algorithm used to develop a Dow structure between 6:30 PM EST February 12, 2020 and 12:45 PM EST February 17, 2020 was also used to develop a similar structure on a shorter timeline between 08:30 AM EST February 10, 2021 and 16:45 PM February 12, 2021. Another February to March decline is expected.
Dow: Early Decline Update
Today, futures market activity indicates a long-term decline in the Dow is expected to start on Friday, February 12, 2021. Structures developed up to this point reflect plans that will ultimately take stock markets down to a 20+ year low by mid-2022.
Dow: Upcoming Decline
Stock chart courtesy of StockCharts.com.
Based on a review of Specialist activities between 1964 and 1974, it appears that major structural templates from this time period were modified and used on a large scale between 1999 and 2009. Current Designated Market Makers are expected to modify an October 2007 to March 2009 Dow template for a significant decline between 2021 and 2022. This template would initiate a decline by March 2021 and last until mid-2022. Unique data points shown below should be noted, as they align with what occurred during the peak of 2007. At this point there is a 90% chance the market will decline over the next two years in a format similar to what occurred during 2007-2009. Preliminary estimates indicate the Dow is expected to fall below 6000 by mid-2022. The following data was identified in the engrbytrade computer model.
Prerequisites:
30Yr T-Bond Non Commercial Trader Short Position Peak
Completed on 6/19/07
Completed on 11/3/20
Copper Peak vs Dollar Value
Completed on 9/25/07
Completed on 12/21/20
Silver: Decline Extended
During the short squeeze in silver between January 28, 2021 and February 1, 2021, it appears Market Makers sold a significant number of shares to retail investors rushing in to buy silver derivatives such as SLV. Commercial Futures Traders short positions remained relatively unchanged. This short squeeze is expected to extend the decline previously planned for silver. Adjustments in the engrbytrade silver model indicate a move to 13.93 is expected by August 25, 2021.
Gold: Minor Change
Designated Market Makers and Commercial Futures Traders gold positions remained relatively unchanged with the recent spike in silver prices. This trading activity resulted in a minor change in the engrbytrade gold model structure showing an expected decline to 1469 (+/- 2%) by February 24, 2021 (+/- 1 trading day) before moving higher.
Silver: Short Squeeze
The rally in silver today was expected as exchange insiders sold short to retail investors rushing in to buy silver. This short squeeze, discussed in the following article, is a move designed to drop the price of silver during the first half of 2021. Commercial Traders will continue to hold a significant number of short positions. A move to 12.33 is expected by June 2021.
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Dow: 88 Days
Based on historical timelines, dynamic trade structures, engrbytrade™ embedded trade markers, and a collapsing economy, an 88 business day decline has started that will lead to 15,804 (+/- 10%) on the Dow by June 3, 2021. This is the first phase of a decline that will ultimately lead to a long term low of 4,137.19 on the Dow. Another point of reference is the SPY. It is expected to decline to 200 (+/- 5%) by June 3, 2021.
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Dow: 44 weeks
Stock chart courtesy of Stockcharts.com.
In addition to the 1929 timeline, Ray Dalio of Bridgewater Associates made a point in 2017 that the U.S. economy looks like it did in 1937.
The week of May 4, 1936 to week ending March 6, 1937 covers 44 weeks with a similar structure shown in the chart above. As of the end of this week, the Dow will complete its 44th week starting from March 23, 2020.
Dow: 1929 vs 2021
On September 3, 1929 the Dow Jones index hit an all-time high of 386.10 prior to starting the market collapse. Today, Market Makers took advantage of the inauguration by pushing the SPDR S&P500 ETF (SPY) upward to hit a high of 384.79. It is not a coincidence that the Dow’s 1929 high of 386.10 and today’s SPY high of 384.79 are less than 2 points apart.
Silver: Decline Expected
The expectation that Silver will decline has not changed. Commercial Futures Traders still hold significant short positions while retail customers continue to purchase long positions. Silver will need to decline in order to be in alignment with the value of global currencies. Silver is still expected to reach 16.50 (+/-3%) by February 11, 2021.
Gold: Significant Short Positions
Commercial Futures Traders still hold significant short positions in gold, and in concert with the media, have driven retail customers into acquiring significant long positions just as they did in mid-2016. While gold prices drop to align with global currencies, retail investors will find their profits evaporate quickly. A decline to 1517 (+/- 2%) is still expected by February 16, 2021 (+/- 1 trading day).
Dow: Market Peak
Underlying futures trader positions and intermarket relationships between the Dow, 30Yr Bond, Copper and U.S. Dollar indicate a major decline is expected over the next two years. There is a high probability the Dow will repeat a structure similar to that of October 2007 through March 2009, ultimately dropping below 6,000. As of January 15, 2021, data indicates the Dow is in the same position as it was on October 11, 2007.
Dow: Hedged Position
Stock chart courtesy of StockCharts.com.
The chart above reflects the intent of Market Makers and Commercial Futures Traders to provide a swift decline below 15,000. At this point Commercial Futures Traders are hedged to take advantage of this broadening formation.
Dow: Timeline Review
A review of the timeline indicates Market Makers are still planning a January – February decline. It is expected that they will split the decline with the first part in January by dropping the Dow to 26,256 (+/- 2%) by January 28, 2021. This will be followed by a relatively small retracement during the first week of February to 28,154 (+/- 2%). The second decline is expected to take the Dow down to 14,683.46 (+/- 2%) by March 2, 2021.
Dow: 3.618
Chart courtesy of StockCharts.com
On January 8, 2021 the Dow hit an Engrbytrade level of 3.618 in the chart structure shown above. From this level the Dow is expected to roll over and start moving lower. This structure has occurred numerous times in the past. One example occurred between May 20, 1987 and August 25, 1987 prior to the October 1987 crash.
Gold: Gold Structure
On January 6, 2021 Commercial Futures Traders completed a gold structure similar to what occurred between June 11, 2016 and November 9, 2016 as Market Makers continue selling short and distributing gold shares to retail investors. A decline to 1517 (+/- 2%) is expected by February 16, 2021 (+/- 1 trading day). Upon completion of this decline, a steady move upward is expected to occur between 2021 and 2025 based on structural relationships with Commercial Trader positions in long term bonds.
Dow: Dow vs. SPY
Note: On August 29, 1929 the Dow hit a daily high of 378.80 prior to moving lower the following week. On December 21, 2020 the SPDR S&P 500 ETF (SPY) hit a daily high of 378.46.
Dow: Sept – Oct 1929
Trades related to the 1929 template currently being used by Exchange Insiders, as discussed on December 12, 2020, are on track to duplicate a September 3, 1929 to October 4, 1929 decline during January – February 2021. An intraday low of 12,904.27 (+/-2%) is expected by February 25, 2021. This aligns with a decline in gold and silver that is expected during the same time period.
Gold: Decline in Gold
The expectation for a decline in gold has not changed. Market Makers continue to sell short and distribute gold shares to retail investors in preparation for this decline. Commercial Futures Traders are currently positioned for a decline in gold with a price target of 1517 (+/- 2%) by February 11, 2021. Upon completion of this decline, a steady move upward is expected to occur between 2021 and 2025 based on structural relationships with Commercial Trader positions in long term bonds.