Engrbytrade Posts

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Economy: Big Short 2.0

The following describes a prelude to The Big Short 2.0. Video quality is problematic, but the audio is good. Fraud and corruption are expected to appear this summer.

Are $Trillions Of New Loans About To Be Pumped Into The Housing Market? | Melody Wright

0:00 – Less Home Equity Than Estimated
4:33 – Role of The GSEs
9:23 – Government Holds 85% Of Mortgages Now
13:16 – Does The Market Need More Home Equity Loans?
19:35 – What Are The Biggest Risks Here?
24:12 – Is This A Bad Idea?
34:48 – Is This Setting Up The Big Short 2.0?
41:09 – Melody’s Latest Housing Market Update

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S&P500/Silver: 1973 Structures

On April 17, 2024, a pull back within silver’s ascending triangle was expected. Silver did pull back into May and then continued to move higher. This move is consistent with the 1971 – 1973 silver structure shown below. As silver started to move higher in 1973, the S&P hit its peak on January 11, 1973 and started a decline the following day.  The current 2024 structures are expected to continue on a path that is similar to the 1973 structures.

Stock charts courtesy of StockCharts.com.

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1971 – 1973

2021 – 2024

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Interest Rates: Year 2000

There are two key indications that a repeat of the year 2000 is possible. The first indication is an interest rate reversion angle shown in the following 2020 to 2024 Federal Reserve chart. This angle is similar to what occurred between April 2000 and December 2000. Previous inversions have impacted stock markets to varying degrees.

Another indication is the Buffett Indicator: US Stock Market Value to GDP. This indicator currently suggests the U.S. stock market is strongly overvalued.

Stock charts courtesy of StockCharts.com.

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Dow: 8.92 Degrees

Additional research shows Engrbytrade™ daily trade pattern structure calculation charts reflect patterns identified in the following Dow charts. The 2024 angle of support is 8.92 degrees during periods of Exchange Insider distributions. A pattern similar to this occurred during mid-1972 and late 1973 to early 1974 using a support angle of 15.39 degrees. It also occurred between March 2007 and August 2007 with a support angle of 20.03 degrees. Large quantities of stock were distributed during this time frame.

The Stock Exchange abets its specialists’ merchandising strategies by training investors to address their attention to business statistics, economic data, and other concepts that have but limited relevance for investment purposes.
Richard Ney, Wall Street Gang, 1974, page 85

Stock charts courtesy of StockCharts.com.

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Dow/S&P500: Promises of Technology

There is no shortage of endless promises of new technology from electric car manufactures. The current descending triangle chart timeline for Tesla is similar to Apple and Intel in 2008.

Note that this information is for educational purposes only and not a recommendation.

Stock charts courtesy of StockCharts.com.

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2024 Tesla model 3 commercial

2008 Apple commercial

2008 Intel commercial

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S&P500: 2019 Trade Pattern

Engrbytrade™ primary Daily Trade Pattern Structure calculations indicate the S&P500 is in a position similar to where it was on February 4, 2020. Based on key structural data points, the Fibonacci retracement sequence reveals a high correlation to the 2019 trade pattern. Secondary calculations indicate the S&P500 is in a position similar to where it was on November 16, 2021. A decline is still expected.

Stock charts courtesy of StockCharts.com.

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Dow/S&P500: Artificial Intelligence Bubble

Prior to the NASDAQ hitting its peak in 2000, a series of events initiated a dot-com bubble that would be remembered for decades. Today we have an Artificial Intelligence bubble headed for the same fate. One clear comparison is the price chart of NVIDA in 2024 vs. Apple in 2000. NVIDA’s price scale is currently 1000 times larger than Apple’s scale in 2000. Overall, the current Artificial Intelligence bubble is expected to be similar to the dot-com bubble with one difference. Instead of large brokerage firms fueling the bubble, very large hedge funds are also participating.

Note that charts shown below are for research purposes only and are not a recommendation.

Stock charts courtesy of StockCharts.com.

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Interest Rates: Not the Fed

On April 20, 2024 it was noted that futures traders were repositioning trades with the expectation of a decline in rates. Positioning is reflected in the charts shown below where a 61.35 degree angle from the Y axis appeared in 2018.  This same structural angle reappeared between June 2022 and October 2023. It has placed the 10-Yr Note interest rate on a 2018 path. Futures traders are still waiting for a decline in rates. This will be generated by the bond market, not the Fed.

Stock charts courtesy of StockCharts.com.

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Dow/S&P500: Global Companies

On May 2, 2024 it was observed that a recent peak of positions in US Equity Futures by Asset Managers was above its 2014 peak. This indicator appeared to have a relatively low correlation to the Dow and S&P500. Further research revealed a high correlation of global companies that included CAT, CVX, IBM, and XOM.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

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Gold: 2024 Angle Rise

On December 22, 2023 it was noted that daily Engrbytrade™ Gold/U.S Dollar derivative calculations have moved quickly in a direction that confirms gold is nearing the completion of a long term ascending triangle structure. This is similar to what developed during 2008 and 2009. Gold’s recent move confirms a 2024 angle rise of 44.43 degrees. This is similar to the angle rise in 2009. Gold is still expected to conduct a move that is similar to what occurred between 2010 and 2011.

Charts courtesy of StockCharts.com.

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Dow/S&P500: 2024 IBM Structure

Structural calculations for the 2017 to 2024 IBM structure show similar characteristics and measurements to that of the 1986 – 1987 structure. IBM hit its first peak in May 1987 as compared to the first peak in April 2024. It is possible another peak will occur in October 2024. Based on its current structure, the end result is expected to be a much lower level.

Note that this information is for educational purposes only and not a recommendation.

Stock charts courtesy of StockCharts.com.

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Interest Rates: 2018 Path

On March 16, 2024 a comparison was made between 10-Yr Note non-commercial futures trader net positions and the 30-Yr Fixed Rate Mortgage Average in 2018 and 2024. Futures traders are currently repositioning trades with the expectation of declining rates, just as they did on November 13, 2018. This has placed the 10-Yr Note interest rate on a 2018 path shown in the charts below. With the current situation, a decline in rates is still expected during 2024 and 2025. Note that during the 2018 interest rate decline between October 4, 2018 and December 24, 2018 the S&P500 dropped 18.9%.

Stock charts courtesy of StockCharts.com.

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Silver: Computer Program Selling

On March 30, 2024 it was noted that confirmation was needed in silver before it could move higher. A review of daily Engrbytrade™ calculations currently indicate a pullback within silver’s long term ascending triangle is planned. Similar pullback signals occurred on August 10, 2020 and February 1, 2021. Since April 3, 2024, computer program selling of very large block trades in derivative products, such as SLV, has increased. The long term move upward from silver’s ascending triangle is still expected.

Stock charts courtesy of StockCharts.com.

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Dow: January 1973 Decline

On March 27, 1973 a 39.91 degree chart illustrated the expectation of a decline that is similar to what occurred in January 1973.  It is not a coincidence that the current trend is similar to January 1973. This decline is expected to continue until key sentiment indicators reach their respective extreme positions.

Be aware of the following.

“Most investors will probably never make money in the market over the long run unless they learn to look at the market as a merchandising operation in which specialists manipulate stock prices in order to sell at retail what they bought at wholesale price levels.”
Richard Ney, Making it in the Market, 1975, page 33

Today’s Market Maker organizational structure controls the merchandising operation.

Stock charts courtesy of StockCharts.com.

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Gold: Banks Precious Metal Contracts

On March 27, 2024, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities.  Table 21 on PDF page 25 shows precious metals derivative contracts held by four major banks. This includes Goldman Sachs, JP Morgan, Citibank and Bank of America. Figure 18 on PDF page 42 shows Notional Amounts of Precious Metal Contracts by Maturity for the 4th quarter of 2023. This move into precious metals by the banks continues to be consistent with data and chart structures discussed in the following Engrbytrade™ posts.

Gold: Long Term Ascending Triangle

Silver: Ascending Triangle

It should be noted that prior to January 1, 2022, gold derivatives were categorized with exchange rate derivative contracts rather than precious metals derivative contracts. This changed reported precious metals derivative contract values in 2022 and future years.

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S&P500: Peak Short Positions

A historical review of E-Mini S&P500 futures trading data revealed E-Mini S&P500 Non-Commercial net short positions peaked on September 11, 2007. This review also identified an E-Mini S&P500 Non-Commercial net short position peak on May 30, 2023. Placement of 2007 vs. 2023 peak short positions is very similar based on the relative scale of each chart. Placement of these peak short positions aligns with the April 10, 2024 post indicating a decline is expected in 2024.

Stock charts courtesy of StockCharts.com.

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S&P500: Key Signal Points Update

On March 24, 2024, it was noted that S&P500 trade patterns indicated algorithms were in the process of developing a structure similar to March 2019 and February 2020. In addition to key signal points identified for 2023 – 2024, one additional point was added on March 25, 2024. This  internal trade structure pattern is similar to what occurred between August 15, 2021 and November 17, 2021.

A decline in 2024 is expected.

Stock charts courtesy of StockCharts.com.

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S&P500: Fear and Greed

As of 3:59 p.m. on April 5, 2024 the CNN Fear and Greed Index had a reading of 60. It is in a position similar to where it was in mid-August 2023 with a decline still expected in April – May 2024. When this index moves below 20, it falls into a range where retail investors are selling and Market Makers are accumulating inventory. This occurred in October 2022, March 2023, and October 2023. When the next move below 20 occurs sentiment will be extremely negative as the media provides a wide variety of pessimistic headlines. The media coordinates very closely with the stock exchanges.

The charts shown below are currently in a range where investors have very bullish expectations for the S&P500. Current readings are similar to what occurred in February 2023.

Stock charts courtesy of StockCharts.com.

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Silver: Distribution Trades

On March 7, 2024 it was noted that a confirmation move above silver’s ascending triangle was needed before both metals are expected to move higher. The chart below illustrates a technique used by Market Makers to distribute their inventory to retail investors. Prior to the move up in April 2024, short term computer algorithms were initiated by Market Makers to accumulate inventory. A move upward was then made for distribution trades between April 2, 2024 and April 3, 2024. Silver is still expected to stay within its ascending triangle based on the need to fill a futures market gap created on March 1, 2024 at 11:05 a.m.

“If specialists want investors to buy stock, they simply raise stock prices sharply. This creates demand. If they want to cause massive selling, they drop prices precipitously. It is merely a problem in engineering.”
Richard Ney, Making it in the Market, 1975, page 85

Note that the chart shown below is for research purposes only and is not a recommendation.

Stock chart courtesy of StockCharts.com.

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