Intermarket structural analysis research
The Dow continues to follow its 2008 template, as shown in the daily charts below. Based on daily engrbytrade™ Dow calculations and structural development, a move up to 31,044 (+/-1%) in the futures market by November 4, 2022 is expected before moving lower.
Stock chart courtesy of StockCharts.com.
October 2 – 14, 2008 October 4 – 14, 2022
The Dow continues to develop a 15-minute futures chart structure similar to that of March 1, 2022 to March 16, 2022. Based on the October 4, 2022 to October 14, 2022 15-minute chart structure rate of acceleration, the Dow is expected to reach 31,470 (+/-1%) by October 24, 2022 before starting a decline.
Daily engrbytrade™ Dow calculations indicate the decline is incomplete. On October 13, 2022 the Dow completed a 2.8% move up on volume of less than 500 million. Based on retail investor sentiment this move appears to be similar to what occurred on October 13, 2008.
On October 10, 2022, it was noted that the Dow was following its March 1, 2022 to March 8, 2022 15-minute futures chart. The Dow continues to develop a 15-minute futures chart similar to that of March 1, 2022 to March 14, 2022. Volatility is expected to increase over the next two to three trading days before moving higher while institutions and retail investors take extreme defensive positions.
Daily engrbytrade™ Dow calculations on October 11, 2022 indicate the Dow is in a similar position to where it was on October 11, 2021. Market makers continue to accumulate very large blocks of stock.
Stock chart courtesy of StockCharts.com.
The October 4, 2022 to October 10, 2022 15-minute futures chart appears to be a repeat of the March 1, 2022 to March 8, 2022 15-minute futures chart. A move higher is still expected.
Market Makers need a sharp rally to distribute very large quantities of stock they accumulated during September. When this distribution is complete, a significant decline is expected to start.
Stock chart courtesy of StockCharts.com.
Based on a detailed review of Daily engrbytrade™ calculations, candlestick structures, accumulation patterns, etc. preliminary data indicates the Dow and S&P500 structures to be developed in October – November 2022 are expected to be similar and have a relatively larger scale than what was developed during October – November 2021.
On September 30, 2022, it was noted that “Commercial Futures Traders are positioned for the Dow to move back above 36,000 during the first quarter of 2023″. As of today, that expectation has not changed. Based on similarities of the 2007-2008 and 2021-2022 Dow structures illustrated below, a review shows a close of 10,962.54 on July 15, 2008 was followed by a higher close of 11,782.35 on August 11, 2008 before starting a significant decline going through September to November 2008. Market data calculations will need to be monitored closely over the coming weeks to see if Market Makers or bankers change priorities and start a decline earlier than expected.
Stock chart courtesy of StockCharts.com.
2021 – 2022
2007 – 2008
The two charts shown below illustrate how structures repeat over different time frames and scales. The current decline is nearing completion, just as it did 20 years ago in September 2022. Note that angles for the trend lines in both charts are identical and drop 25.03 degrees from the X axis. This supports the Engrbytrade hypothesis that market movements are based on structures created prior to, and implemented during, the course of predetermined time frames.
Stock charts courtesy of StockCharts.com.
Weekly futures trading data calculations have shifted and indicate the Dow is significantly undervalued relative to the U.S. Dollar. Capital continues to move out of Europe pushing the U.S. Dollar higher. This flow of capital has created a distortion in relative values of various products, such as the Dow Jones Index. At this point calculations show the Dow will not have a sharp decline in 2022 as expected. Commercial Futures Traders are positioned for the Dow to move back above 36,000 during the first quarter of 2023.
The chart below provides key points where the Dow has been undervalued relative to the U.S. Dollar.
Chart courtesy of StockCharts.com.
Preliminary data indicates the Dow repeats a June – August 2022 structure filling any remaining gaps. End-of-month data is still needed to confirm this.
Since September 23, 2022 the Dow has developed a Right-Angled and Descending Broadening Formation in the 15-minute chart. A move to higher levels is expected to continue.
Key words from the media push pessimism in retail trading for Market Makers to acquire additional inventory.
A move up in the Dow is still expected.
To provide an illustration for a move up that is expected to occur between the last week of September 2022 and first week of October 2022, the following charts show a comparison between 2004 and 2022. The December 2003 to September 2004 Dow structure is not an exact replica, but is similar to the December 2021 to September 2022 Dow structure. Following this move up a decline will depend on Market Makers and bankers going into the end of the 2022 fiscal year. As data becomes available, adjustments may be needed.
Chart courtesy of StockCharts.com.
The Dow completed its September 21 -23, 2022 decline sequence based on daily engrbytrade™ Dow calculations from price structures between October 11-13, 2021 and May 18 – 20, 2022. A move up to 32,122 (+/-1%) is expected based on today’s futures market price structure. Potential does exist for the Dow to move above 32,610, but additional daily data will be needed to see if the Dow continues to move higher.
A repeat of the Dow structure from late August to early September 2022 is in progress. Daily engrbytrade™ Dow calculations show that by the third business day after September 21, 2022 (September 26, 2022) the Dow is expected to start moving higher. This is similar to what occurred after October 11, 2021 and May 18, 2022. A move up to 31,715 (+/- 1%) is expected in the futures market.
Chart courtesy of StockCharts.com.
Today’s review indicates an attempt is in progress to complete a falling wedge. This could lead to filling gaps created on September 3, 2022 and August 22, 2022.
Chart courtesy of StockCharts.com.
The Engrbytrade hypothesis is that market structures are created and implemented during the course of predetermined time frames. This is based on observations that market structures continue to repeat. The current Dow futures structure is in the process of developing (and potentially repeating) a 12 calendar day structure similar to that of the 15-minute futures chart starting on 6:30 p.m. on June 12, 2022 to 10:45 a.m. on June 24, 2022. This does not mean the current futures structure will have a 12 day timeline. Financial market structures are not natural, such as a Fibonacci sequence, due to external adjustments made by algorithms or those who control prices and timelines. This is why time frames and price targets will continue to change. Current calculations show the Dow starting to fill the gap created on September 13, 2022 by September 27, 2022. Price and timelines are subject to change and updates will be provided as this structure develops.
Current calculations show the Dow futures index rate of acceleration indicates a fill for the gap generated on September 13, 2022 at 08:30 a.m. is expected after the NYSE market close on September 26, 2022.
Dow futures are moving quickly to fill a gap created on September 13, 2022 at 8:30 a.m. At the current rate of rise, it is expected that this gap will be filled by Friday, September 23, 2022.
Chart courtesy of StockCharts.com.
Note that a brief move up between September 20, 2022 and September 21, 2022 (during the FOMC meeting) is expected before making a sharp decline to the lower trend line shown below.
Chart courtesy of StockCharts.com.
The last 3 weeks of this SPX weekly chart look similar to the Dow weekly chart between September 30, 1929 and October 19, 1929.
Chart courtesy of StockCharts.com.
After the Dow dropped on September 15, 2022 with a gap opening in after-hours futures trading it was observed that within 24 hours of this gap opening the Dow moved back up to fill it on September 16, 2022. It was also observed that very large blocks were crossing the tape in after-hours trading as the Dow moved up on the 16th. Based on these observations, daily engrbytrade™ Dow calculations, and daily futures trading calculations the Dow is expected to continue moving to its lower trend line shown below.
Charts courtesy of StockCharts.com.
On September 15, 2022 at 6:00 p.m. EST a gap down in the Dow futures chart appeared. This action is similar to what occurred on June 12, 2022 at 6:00 p.m. EST. The Dow is expected to move down to 28,792 in the futures market before moving above 32,688 at a later date in order to fill the gap created on September 13, 2022.
Chart courtesy of StockCharts.com.