Category: Dow

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Dow/SP500: Market Maker Accumulation

The Market Maker accumulation process was in full swing on August 5, 2024. For example, it appears they accumulated at least 5 times the number of shares in the SPY that they normally would on an average day. This inventory will be redistributed as the markets move higher. In the background, CNN’s Fear and Greed Index hit 18 with an intraday low of 16. In comparison this index closed with a low of 17 on October 11, 2022. The Dow is still on track with the 2021 eight point chart shown below.

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

Charts are courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: British Pound and Swiss Franc

On July 20, 2024 an exponential shift occurred when Commercial Futures Traders reported a record level of British Pound net short positions. This short position move was much larger than what occurred in 2007. After the July 2007 record of net short positions, stock markets started moving lower in October 2007.

On July 30, 2024 Non-Commercial Futures Traders reported a record level of British Pound net long positions on July 23, 2024. This was well above the July 2007 record that occurred prior to the Dow and S&P500 peak in October2007.

In the chart below Swiss Franc Non-Commercial Traders repeated a 105 day performance of what occurred between May 29, 2018 and September 11, 2018.  After Swiss Franc traders changed direction in September 2018, stock markets started a decline in October 2018. This lasted until late December 2018.

It appears various currency futures traders are positioning for a stock market peak in late September or early October 2024. This would be followed by a substantial decline going into 2025.

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Dow: 2024 Preliminary Fibonacci

On August 5, 2024 Market Makers were in the process of accumulating inventory as the Fear and Greed Index moved to a low of 18. The Dow is expected to move higher using a chart structure similar to December 2021. A 2024 preliminary Fibonacci retracement structure has been applied as a guide for this move upward. If this move continues as expected, it will be volatile and lead to a projected peak of 42,062.

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

Charts courtesy of StockCharts.com.

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Dow: Accumulating Inventory

Today, Market Makers moved the Dow to a low of 38, 499 with an opportunity to accumulate additional stock (inventory). This move fell within a few points of the 8.92 degree trend line shown in the chart below. Based on CNN’s Fear and Greed Index moving to a low of 18 today, Market Maker priorities could shift quickly and expedite a move to the upside. This would be similar to the Fear Index reading of 18 (+/-1) on September 29, 2022, March 15, 2023, and October 3, 2023.

Charts courtesy of StockCharts.com.

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Interest Rates: July 2007 Trajectory

On July 25, 2024 it was noted that bond traders were preparing for a stock market decline. It also appeared the Federal Reserve was following an interest rate path similar to 2007. The charts below indicate the current 10-Yr Note rate is still on a July 2007 trajectory. The August 2, 2024 10-Yr Note rate decline aligns with the decline on July 26, 2007. This places the current Dow and S&P500 in a position that is similar to  where they were late July 2007.

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

Charts courtesy of StockCharts.com.

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Dow: Change in Direction

On July 19, 2023 the Dow appeared to follow its 2021 structure time frame. The August 1, 2024 change in direction confirms this. If Market Makers and algorithms continue to move markets as they did in 2021, a decline to the 8.92 degree support line is expected. This would be followed by a move upward going into the election.

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

Charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: British Pound Net Short Positions

On July 20, 2024 it was noted that an exponential shift occurred when Non-Commercial Futures Traders reported a record level of British Pound net short positions. That record level was broken last week by Commercial and Non-Commercial Futures Traders (Net Long-Short shown below).

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

Chart courtesy of StockCharts.com.

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Dow: Algorithms Continue to Move the Dow

As noted on July 26, 2024, structure is important. Prior to the current decline Market Makers pushed prices higher on July 17, 2024 using their standard practice of distributing extremely large blocks at the close. Algorithms continue to move the Dow down to its 8.92 degree trend line shown below before moving higher.

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

Chart courtesy of StockCharts.com.

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Dow: Structure is Important

During the last half of May 2024 algorithms followed a pattern shown in the first chart that could be identified as an engrbytrade Eight Point Trading ModelTM . The second chart provides a template for this model. It should be noted that this structure is important and appears to have started once again in the third chart. This will provide the timing needed to replicate its 2021 structure time frame.

Charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Significant Decline in 2025

An exponential shift occurred this week when Commercial Futures Traders reported a record level of British Pound net short positions. This is much larger than what occurred in 2007. It indicates Futures Traders are expecting a repeat performance of 2008 with a significant decline in 2025. As noted on July 19, 2024, a turn upward from the 8.92 degree trend line would lead to a peak in September – October 2024.

Chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Distributing Stock

On July 17, 2024 Market Makers pushed prices higher using their standard practice of distributing stock at the close. It appears they are moving lower using a broadening formation in order to fill one gap created in the extended hours on July 8, 2024 at 4:10 AM. This will provide an opportunity to accumulate additional inventory before moving higher. This is only one example of a coordinated effort using a multitude of trades each day.

Chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Extended Hours Trading

On July 12, 2020 it was observed that very large block trades crossed the tape at an irregular pace. In Extended Hours trading this morning a sharp rise in Intel occurred as Market Makers pushed prices higher. Their accumulation of inventory between April 30th and July 10th was coordinated with the current rise in markets.
This is only educational material. Not financial advice.

Chart courtesy of StockCharts.com.

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Dow: Investor Sentiment

Based on the current NAAIM exposure index and CNN Fear and Greed Index, investor sentiment is not in an extreme position. Estimates indicate the Dow is currently in a position that is similar to where it was in October 2021. The charts below have been updated to reflect this. This means there is room to move higher, as noted on July 11, 2024.

Charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Intel Block Trades

Between October 2022 and June 2023 very large Intel block trades crossed the tape approximately every other month. This was followed by a steady move up into the end of 2023 before falling in 2024. Over the last two and one-half months it was observed that very large block trades crossed the tape at an irregular pace.  Typically this would be an accumulation process by Market Makers. But, with the Warren Buffet stock market indicator hitting an all-time high, as it did at the beginning of 2000, it is not clear what Market Maker’s intend to do.

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

Chart courtesy of StockCharts.com.

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S&P500/Dow/NASDAQ: AAPL Block Trade Review

This block trade review found two AAPL trades of more than $1.6 billion occurred on December 3, 2021 and December 15, 2021 before markets started their decline in 2022. Two more AAPL trades of more than $1.7 billion occurred on June 11, 2024 and June 20, 2024. It is an indication that Market Makers are expecting another decline in 2024.

“Big blocks at the tops and bottoms of all moves become larger and more frequent depending on the duration and precipitousness of the move.”
Richard Ney, Making it in the Market, 1975, page 89

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

Charts courtesy of StockCharts.com.

Disclaimer

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Dow/S&P500: Algorithmic Trading

On June 15, 2024, it was noted that the Dow was moving in a pattern similar to the last half of 2021. A closer look at this pattern shows algorithmic trading continues in a predetermined structure similar to 2021. It also aligns with the S&P500 Fibonacci 1.618 range discussed on June 20, 2024. A move into the 40,200 range is expected before moving lower.

Charts courtesy of StockCharts.com.

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Dow: Turning Points

On June 13, 2024 it was noted that the Dow continues to move in a pattern similar to the last half of 2021. To put this into context, the first Dow chart (2024) includes turning points that align with the second chart (2021). The last chart identifies time frames where very large block trades occurred.  Note that very large block trading does not necessarily equate to high volume trading days.

“Big blocks at the tops and bottoms of all moves become larger and more frequent depending on the duration and precipitousness of the move.”
Richard Ney, Making it in the Market, 1975, page 89

Charts courtesy of StockCharts.com.

Disclaimer