To start the week, the 5 minute Dow futures chart is forming a falling wedge formation prior to the open. This is expected to reverse and move up to 36,830 to fill a gap left behind in the futures market chart.
Dow: Point of Reference
As a point of reference, daily engrbytrade™ Dow calculations and structural calculations indicate the Dow is in the process of developing a 15 minute futures chart that is similar to what was developed between October 7, 2021 and October 13, 2021.
Dow: Rising Wedge Expected
Daily engrbytrade™ Dow calculations confirm a move to 38,473 is in progress. Structural calculations indicate a rising wedge is expected to develop with the Dow hitting a peak by February 2022. This peak would be similar to what occurred in January 1973 and January 2000.
Dow: Move to 38473
As of 11:46 a.m. (EST) on December 20, 2021 Dow futures hit a low of 34548 while dropping within a predetermined range of 34389 to 34559, as originally noted on December 16, 2021. Preliminary calculations indicate a move in the Dow futures to 38,473 (+/-1%) is expected.
Dow: Deferred Move
The deferral of a move down to a range between 34389 and 34559, as noted on December 17, 2021, was initiated during the overnight futures trading session prior to markets opening on Monday, December 20, 2021. Upon completion of this decline to fill previous gaps, a move to 38,000 is still expected based on Market Maker accumulation activity and daily engrbytrade™ Dow calculations.
Dow: Move To 38,000
Market Maker accumulation activity between December 13, 2021 and December 14, 2021 along with daily engrbytrade™ Dow calculations at the market close on December 16, 2021 indicates the decline that was expected to a range between 34389 and 34559 will be deferred. A move upward is now expected to continue towards 38,000 on the Dow.
Dow: Brief Decline
Chart courtesy of StockCharts.com.
Underlying data indicates Market Makers were engaged in a meaningful level of accumulation at the close on December 14, 2021. This accumulation relative to daily engrbytrade™ Dow calculations indicates positioning within a broadening formation shown above will result in a brief decline to a range between 34389 and 34559 in the futures market before moving to higher levels.
Dow: Decline Expected
Additional data related to daily engrbytrade™ Dow calculations indicate a decline is still expected with a move down to a range between 34389 and 34559 in the futures market prior to moving higher.
Dow: Repeating Structure
Daily engrbytrade™ Dow calculations show a repeating structure is in progress, which is similar to what was developed between September 20, 2021 and October 1, 2021. The Dow is expected to return to 34561 in the futures market to fill a gap created on December 5, 2021 at 6:00 p.m. (EST). Upon completion of this move, the Dow is expected to move higher.
Dow: Gaps Closed
As noted on December 3, 2021 the Dow moved above 35789 on the 5 minute futures chart today closing various gaps created between November 25, 2021 and December 1, 2021. Daily engrbytrade™ Dow calculations continue to show the Dow is expected to move higher.
Dow: March 2022
When the Senate approved a Continuing Resolution it deferred the start of a market decline noted on November 30, 2021 to the first quarter of 2022. This approval action aligns with the 1929 peak structure and would place a Dow peak near 38,000 by March 2022. Pending any further action by Congress or the Fed, a significant decline would follow the March peak. Daily engrbytrade™ Dow calculations will track the progress of this move.
Dow: Closing Gaps
Daily engrbytrade™ Dow calculations confirmed the Dow is expected to move higher as noted on November 27, 2021. This move up is expected to reach 35789 on the 5 minute futures chart for the purpose of closing various gaps created between November 25, 2021 and December 1, 2021. It has also been observed that very large block trading (>1M) is limited.
Dow: 2018 4th Quarter
In addition to the non-existent accumulation of very large block trades on Monday, November 29, 2021, futures trading data calculations indicate a 2018 4th quarter decline is expected to start between December 3, 2021 and December 15, 2021.
Dow: Limited Accumulation
Daily engrbytrade™ Dow calculations indicate a retracement to 35782 in the futures market is expected prior to moving lower. This retracement structure would be similar to what occurred between September 21, 2021 and September 27, 2021. It appears that a limited number of very large blocks were accumulated during the sharp decline on November 26, 2021.
Dow: 83% Update
On November 1, 2021 the Dow: 83% post noted that the Dow would start a decline on November 8, 2021. Congress passed the $1.2 trillion infrastructure bill on November 6, 2021. This was followed by the Dow peaking on Monday November 8, 2021 with a new all-time high while a significant number of very large block trades occurred between November 8, 2021 and November 9, 2021. Prior to this move, daily engrbytrade™ Dow calculations shifted to indicate the Dow will continue developing a declining structure. The chart shown below provides an update to the rising wedge discussed on November 1, 2021. As of Friday, November 19, 2021 the Dow landed on the 83% mark and is expected to continue moving lower.
Stock chart courtesy of StockCharts.com.
Dow: 1929 vs 2021 Peak
The Dow hit an all-time high of 36565.73 on November 8, 2021. Prior to reaching this peak, calculations indicate the Dow repeated a unique set of daily structures similar to what occurred between July 29, 1929 and the peak on September 3, 1929. Daily Engrbytrade™ Dow calculations indicate the Dow will continue to develop a declining structure similar to what occurred between September 11, 1929 and October 4, 1929. The current decline is expected to continue into mid-December 2021.
Dow: Debt Limit
Daily Engrbytrade™ Dow calculations and large block trade patterns continue to indicate a decline is expected to occur. Additional data shows this decline will follow Treasury debt limit concerns going into mid-December.
Dow: Mid-November Decline
Daily Engrbytrade™ Dow calculations indicate a brief mid-November decline will take place before moving higher. This move is expected to be similar to what occurred between May 10, 2021 and May 19, 2021.
Dow: Calculation Update
Based on Congress passing the $1 trillion infrastructure bill and upcoming $1.75 trillion “Build Back Better Plan”, structural calculations indicate the Dow is expected to reach 38,610 (+/- 2.5%) before moving lower.
Dow: $1 Trillion Infrastructure Bill
On November 5, 2021 the House passed a $1 trillion infrastructure bill. This last minute approval provides Wall Street with the means to complete a 1929 peak. Calculations will be revised as needed to incorporate this change.
Disclaimer
Dow: Transports Leading Indicator
On November 2, 2021 the Dow Jones Transportation Average Index hit an all-time high of 18,246.51 with a significant number of large blocks trading during the day. Tuesday’s candlestick formation is typical for a market that is peaking.
Stock chart courtesy of StockCharts.com.
Dow: 83%
Over the last three years, one key trait of the Dow (and S&P500) that stands out has been the rising wedge format with a consistent drop point on the 83% (+/-1%) mark, as shown below. The Dow is expected to peak by November 4, 2021 (+/- 1 trading day) followed by a sharp decline starting the week of November 8, 2021.
Stock chart courtesy of StockCharts.com
Dow: Turning Down
Daily calculations indicate the Dow is completing its move through the rising wedge discussed on October 25, 2021 and initiating a process to start a decline. This decline is expected to move the Dow back down to 33,613 (+/-1%) using a structure similar to what was developed between June 1, 2021 and June 18, 2021.
Dow: 1989 Nikkei 225
On December 29, 1989 the Nikkei 225 hit a peak of 38,957. Thirteen years later it was below 8,000. It should be noted that the Nikkei 225 parabolic move from 1960 to 1989 looks similar to the Dow parabolic move from 1990 to 2021.
Dow: October Rising Wedge
As noted on October 20, 2021, large block distributions have been observed each day. This is very similar to what occurred between June 21, 2021 and August 16, 2021. This trend upward is expected to be complete by October 28, 2021.
Stock chart courtesy of StockCharts.com.