Dow: September 5, 2022 Adjustment

The adjustment noted on September 5, 2022 for a close of 15,908 (+/- 4%) [15,271.68 to 16,544.32 range] with a decline in the stock markets accelerating in late September 2022 and collapsing going into October and November 2022 is based on the following.

  1. The Dow has moved past point 8 of the engrbytrade Eight Point Trading ModelTM and is in a similar position to where it was in September 2008.
  2. In the charts shown above and below, points of origin for a four year time frame using a 20.65 degree drop below the X axis and originating from February 23, 2009 and February 9, 2018 indicate the Dow is expected to have a significant decline in 2022. It is possible the 2022 decline could roll over into the first quarter of 2023, but additional data will be needed to make that determination. The scale of the decline in 2022 will be proportional to that of 2008.
  3. Daily calcs identified significant (Market Maker) selling occurred in November 2021. This was followed by a move down to the 30,000 range with very little buying during this decline.
  4. As the Dow moved up between July and August 2022 daily calcs identified significant (Market Maker) selling again prior to rolling over indicating a move to lower levels.

Stock charts courtesy of StockCharts.com.

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Dow: October 2022

The global economic collapse is accelerating as the U.S. moves into its final month of FY22. The following short list provides some perspective of how unstable the world has become.

  1. Russia continues to invade Ukraine.
  2. Foreign capital is being transferred to the U.S. due to negative interest rates in Europe and the war in Ukraine.
  3. Foreign investors continue to buy U.S. real estate, stocks and bonds.
  4. The Fed continues to print Dollars and send them overseas.
  5. Currently, there is no alternative to the Dollar.
  6. The Biden admin destroyed energy markets.
  7. European pension funds are broke due to requirements forcing them to invest in Government bonds.
  8. China is converting to a War economy.

This instability will ramp up quickly in September as the Fed continues to raise interest rates while European industries and stock markets collapse, and international problems surrounding Taiwan and the South China Sea increase. A sharp decline in the stock markets is expected to start in late September and continue going into October and November 2022. Engrbytrade structural calculation updates indicate the Dow can fall to 15,908 (+/- 4%).

June 1, 2022 warning from Jamie Dimon
Jamie Dimon Says Get Ready for an Economic ‘Hurricane’

 

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Dow: April 21, 2022

On Friday August 26, 2022 a bearish engulfing candle appeared along with daily engrbytrade™ Dow calculations showing results that are similar to what occurred on April 21, 2022. After several weeks of Market Maker distributions in July and August the Dow is expected to continue moving lower through September 2022. This move will provide a path to lower trend lines shown in the chart above.

Stock chart courtesy of StockCharts.com.

Disclaimer

Dow: Filling August Gaps

The Dow is moving lower in an attempt to close a gap in the 5-minute futures chart that was created on August 10, 2022 between 32,840 and 32,955. The next move would be upward in order to fill various gaps created in the 5-minute futures chart between August 16, 2022 and August 19, 2022. In order to fill the gaps at higher levels, a move up to 34,187 will be needed. This means a quick move up with significant distributions by Market Makers would form a double top in the Dow prior to making a significant decline.

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Dow/SP500: Distribution of Stock

Since July 19, 2022 daily engrbytrade™ Dow and S&P500 calculations have revealed an underlying trend of significant selling that is similar to what occurred between October 21, 2021 and November 11, 2021. The rate and scale of Market Makers distributing stock indicates a move to significantly lower levels is expected during the last half of 2022.

Stock charts courtesy of StockCharts.com.

Disclaimer

Dow: Inverse Index Groups

Market Makers are currently moving the Dow, S&P 500, and NASDAQ indices higher in order to fill gaps in their related inverse index groups. It was observed that gaps occurred in various daily inverse index groups on April 6, 2022 (PSQ, QID, REW, SQQQ) and April 22, 2022 (DOG, DXD, RXD, SDOW, SKF). The Dow 30 inverse index shown above illustrates a process Market Makers are using with a rising wedge show below in order to fill gaps created on April 22, 2022. This process also aligns with the July 28, 2022 post and an expectation of reaching point eight of the Engrbytrade Eight Point Trading Model (discussed previously) between August 4, 2022 and August 16, 2022 within a trading range of 33,913 (+/- 1.5%) before moving lower.

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

Chart courtesy of StockCharts.com.

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Stock chart courtesy of StockCharts.com.

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Dow: Preliminary update 33,913

Based on futures trading data, rate of acceleration, and preliminary risk adjusted structural calculations the Dow is expected to reach point eight of the Engrbytrade Eight Point Trading Model (discussed previously) between August 4, 2022 and August 16, 2022 within a trading range of 33,913 (+/- 1.5%) before moving lower. This point in the model is a key area where the Dow is expected to start a significant decline during the last half of 2022. Updates will be provided as needed.

Disclaimer

Dow: 2008 vs 2022 Reference Point

As noted on June 27, 2022, the Dow is in the process of completing an Eight Point Trading ModelTM structure. The 2022 Dow structure has similar design attributes as the smaller version from 2007-2008 and, based on its current position, a move above the June 1, 2022 high of 33,272 is expected to occur. Additional futures market data will be needed to identify reference point 8 where the Dow is expected to start moving lower.

Charts courtesy of StockCharts.com.

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Dow: Decline Below The Trendline

Before moving higher, daily engrbytrade™ Dow calculations indicate a decline should occur with a move below the lower trendline of the current falling wedge formation. This chart structure continues to develop into an engrbytrade Eight Point Trading Model TM formation, which is typically found within intraday futures charts. A structure similar to this can be found in the 1-hour Dow futures chart between February 10, 2022 and February 24, 2022.  A sharp decline below 28,405 is expected before moving higher as it did between February 24, 2022 and March 30, 2022.

Chart courtesy of StockCharts.com.

Disclaimer

Dow: Strategic Long-Term Positions

Futures trading data calculations indicate very significant and strategic long-term positions were constructed by institutions between June 22, 2022 and June 28, 2022. These positions are scaled relative to what was developed on March 24, 2009, September 1, 2015, February 23, 2016, March 24, 2020, May 19, 2020, June 23, 2020, and March 2, 2021. At a minimum the Dow is expected to move up to 35, 373 (+/-1%).

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