Intermarket structural analysis research
Just in time for a market decline. Timing is everything.
Jerome Powell testimony
Date: Tuesday, March 7, 2023
Time: 10:00 AM
The Semiannual Monetary Policy Report to the Congress
Jerome Powell testimony
Date: Wednesday March 8 2023
Time: 10:00 AM
The Federal Reserve’s Semi-Annual Monetary Policy Report
The 1-hour Dow futures chart is currently forming a falling wedge pattern that is similar to what developed between August 22, 2022 and August 24, 2022. Based on research from February 28, 2023, a brief rally is expected prior to a sharp decline similar to what occurred after August 26, 2022.
Stock charts courtesy of StockCharts.com.
Be aware that a small gap appeared at the market open on February 28, 2023. This gap is expected to be filled with a move above 32,814 on the NYSE and 32,981 in the 15-minute futures chart, before the Dow moves to lower levels.
Stock charts courtesy of StockCharts.com.
Daily intermarket futures trading data calculations indicate the Dow and S&P500 are expected to continue to decline in March 2023 based on comparable calculation results from February 2, 2022 and August 24, 2022.
Stock charts courtesy of StockCharts.com.
Market Makers have successfully managed to develop Dow and S&P500 chart structures between 2018 and 2023 that are similar to chart structures between 1966 and 1973. The end result is also expected to be similar to 1974. Arrows in the charts below overlay Engrbytrade™ markers based on comparable calculations from 1966 to 1973 and indicate a steady decline is expected until the end of 2023. Preliminary estimates indicate the end result would be a drop below 14,000 for the Dow and below 2000 for the S&P500.
Stock chart courtesy of StockCharts.com.
The chart below is a representation of the current Dow futures chart structure with a descending triangle pattern that typically precedes a decline. If this structure continues to develop, a move up to its upper trend line is possible before dropping through the lower horizontal line and continuing with a decline described on February 22, 2023.
Note that this information is for educational purposes only and not a recommendation.
Stock chart courtesy of StockCharts.com.
In the charts below it has been observed that structures between November 1, 2022 and February 22, 2023 appear to be similar to what was developed between July 11, 2008 and September 5, 2008. Although, this comparison alone does not confirm a decline is expected, it does provide a framework to conduct structural calculations showing an upcoming decline to 25,777. This would be a 22.2% decline.
Stock chart courtesy of StockCharts.com.
Daily engrbytrade™ calculations indicate market movements are determined prior to the issuance of Fed Meeting Minutes.
Stock chart courtesy of StockCharts.com.
Daily engrbytrade™ calculations from February 16, 2023 confirm the Dow is in a similar structural position compared to where it was on February 2, 2022 and August 24, 2022. A decline is expected during the next 24 trading days.
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Around 8:30 a.m. EST today the 5-minute Dow futures chart gap below 34,617, that was created at 2:00 p.m. on December 14, 2022, has been filled. The need to fill this gap was noted on January 28, 2023. One gap in the NASDAQ remains, as described on February 7, 2023.
The Dow Jones Transportation Average charts shown below provide some insight into significant trading activities prior to a decline. In the last quarter of 2021, when a large long tail candlestick appeared on November 2, 2021, it was observed that a significant number of very large block trades were crossing the tape around that period of time. This trading activity is also similar to what occurred as a steady stream of very large blocks appeared during late January 2023 and early February 2023 when a long tail candlestick appeared on February 2, 2023. In the past, smaller versions of long tail candlesticks appeared on May 19, 2008 and September 19, 2008 prior to a sharp decline in late 2008.
Based on the Dow Transport Average index timelines discussed above, S&P500 and NASDAQ descending triangles noted on February 9, 2023, very large block trades crossing the tape during periods when long tail candlesticks appear, plus “technical issues” for trades on over 200 stocks during the morning session on January 24, 2023, it appears that Market Makers are setting up a decline that could last well into 2023.
Stock chart courtesy of StockCharts.com.
The Dow/S&P500/NASDAQ are still expected to move higher. Algorithms are currently in the process of filling intraday gaps created during a volatile trading period after Jerome Powell’s speech on February 7, 2023.
Daily engrbytrade™ Dow calculations indicate the Dow is in a peak structural position similar to where it was on August 18, 2022, before losing 18% as it fell into mid October 2022. A market decline is imminent.
Stock chart courtesy of StockCharts.com.
Between January 19, 2023 and January 27, 2023 daily engrbytrade™ Dow calculations indicate algorithms have been positioning the Dow to set up a brief move upward prior to starting a decline. The January 19 – 27, 2023 calculations are similar to results received between December 8, 2021 to December 17, 2021 and August 4, 2022 to August 9, 2022. Prior to conducting a decline in the Dow, algorithms are expected to move the Dow higher and fill a gap that was created in the 5-minute Dow futures chart on December 14, 2022. This would move the Dow above 34,617 in the futures market before a decline would start.
Algorithms are also expected to move the S&P500 above 4229 in the futures market to fill a gap created in the 5-minute futures chart between August 19, 2022 and August 21, 2022.
This move up is calculated to take 8.5 trading days (+/- 1.5 trading days). A move down is still expected in accordance the January 25, 2023 post.
Stock chart courtesy of StockCharts.com.
On December 14, 2022 at 2:00 p.m. the Federal Reserve raised the overnight borrowing rate one-half percent to a range between 4.25% and 4.5%. This announcement resulted in a gap of the 1-hour S&P500 and Dow futures charts. The S&P500 gap was filled at the close on January 26, 2023. It appears algorithms are working to fill the December 14, 2022 Dow futures chart gap above 34,482.
In addition to the post on January 25, 2023, chart structures with a four day rise, followed by a brief decline and another four day rise have a history of being predecessors to a decline. This includes time frames in the following charts when the Dow declined from October 3, 2018 to December 24, 2018 and December 27, 2007 to January 22, 2008.
Stock chart courtesy of StockCharts.com.
Daily engrbytrade™ inverse derivative calculations indicate the Dow and S&P500 are expected to decline. Calculations for the Dow are similar to results from January 4, 2022 and February 9, 2022. Calculations for the S&P500 are similar to results from April 1, 2022 and August 4, 2022. Engrbytrade structural calculations in the futures market indicate the S&P500 is expected to reach 2891 (+/-1%) and the Dow to ultimately reach 27,108 (+/- 1%).
Stock chart courtesy of StockCharts.com.
The Dow 15-minute futures chart gap created on December 14, 2022 at 2:00 p.m. EST still needs to be filled, as noted on December 29, 2022.
Note that there are some Dow short ETF products that contain a gap created between January 13, 2023 at 8:00 p.m and January 17, 2023 at 4:15 a.m. The potential exist for the Dow to move up to 34,300 to fill these gaps before moving lower.
Note that algorithms are recalculating the sequence of events needed to fill the gap created by the Dow and S&P500 this morning. This also includes other derivative products linked to the Dow and S&P500. When this gap is filled, the decline is expected to continue.
Stock chart courtesy of StockCharts.com.
It was observed from additional data that intraday trading patterns have been similar within time frames illustrated in the chart below. Based on this, structural calculations indicate a move down to 28,733 in the futures market is possible with the development of a double bottom reversal formation before moving higher.
Stock chart courtesy of StockCharts.com.
As noted on January 8, 2023 calculations indicate the Euro is expected to move higher over the next 12 months. This Euro shift is also expected to affect the Dow and S&P500 with both moving higher over the next 12 months. It would fill the Dow gap noted on January 3, 2023 and both S&P500 gaps noted on January 4, 2023.
Stock chart courtesy of StockCharts.com.
On December 19, 2022 at 11:00 p.m. (EST), the Dow started a 1-Hour Ascending Triangle. A breakout from this triangle would take the Dow above 34,604 to fill a Dow 15-minute futures chart gap noted on December 29, 2022.