The Dow Jones Index crossed it long-term structural design limit on Friday, December 20, 2019 as it moved through 28,455. It is possible for the Dow to stay in this range until mid-January 2020 before starting a long-term decline.
Dow Structure Stability
The current broadening top formation in the Dow is developing an ominous structural feature. Based on this structure, a rapid move to the upside going into mid-January could present significant downside risk. If the Fed follows through with their $500 billion liquidity intervention in an attempt to avoid another December 2018 decline, the result could lead to an extremely unstable Dow structure in the first quarter of 2020.
Broadening Top Formation
The Dow’s resistance to a decline is reflected in its Broadening Top formation that started in 2018. This price structure typically appears prior to a substantial decline. Over the recent past examples include 1999, and 2007.
Chart courtesy of StockCharts.com
November-December Decline
The decline discussed in Dow vs Aramco on Nov. 3, 2019 is still expected based on a move up from October 24, 2019 that was extended three days by Market Makers. Friday’s move up in the Dow to 28,000 provided Exchange Insiders with an opportunity to sell to the public as media outlets manipulated retail investor expectations with optimistic news. A decline is still expected to start by November 19, 2019 +/- 1 trading day and continue until December 24, 2019 when the NYSE closes at 1 p.m. EST. This decline now has the potential to reach 24,200 +/- 1%.
Dow vs. Aramco
Prior to the official announcement of Saudi Arabia’s Aramco IPO, Market Makers quickly adjusted the Dow timeline to accommodate the start of Aramco stock trading on December 11, 2019. This adjustment shifted the Dow structure in a way that will provide stability in the markets until a final price for the float is announced on December 4, 2019. A small decline in the Dow is expected to start by November 12, 2019 and move down to the 26,200 range by December 10, 2019.
Dow: Aramco IPO
Prior to any significant decline in the stock market, Aramco is expected to complete an initial public offering by December 11, 2019.
Saudi Aramco shares to start trading in December
Dow: Futures Gap Filled
The October 1, 2019 gap down at 10:00 a.m. (EST) in the Dow 30 Futures was filled today (October 15, 2019) with the Dow 30 Futures moving above 26,986.5 at 10:29 a.m. (EST). This structure clears the way for a decline over the next 18 days. Based on this confirmation, final structural calculations indicate the NYSE Dow 30 index is expected to decline to a level of 24,091.99 (+/-1%) by November 8, 2019 (+/-1 trading day).
Dow: Tuesday Turning Point
A majority of the gap down identified on 10/6/19 was filled today. A down day is expected on Monday followed by an up day on Tuesday to fill the remainder of the gap. Tuesday’s peak will initiate the start of a decline going into November.
Dow: October Turning Point
Time is short for Market Makers. The latest calculations indicate a turning point in the Dow by Monday, October 14, 2019 (+/- 1 day). Preliminary calculations show the Dow is expected to decline to 24,527 (+/-1%) by November 6, 2019, and then move upward for ten days before the next turn to continue the decline.
(Disclaimer)
Dow: Algorithm Adjustment
A gap down occurred in the Dow futures between 26,986.5 and 26,956 on October 1, 2019 at 10:00 a.m. (EST). The Dow Index algorithm is expected to move the Dow up and fill this gap by November 11, 2019. Final computer model adjustments show the Dow dropping to 22,300 (+/- 1.5%) before December 31, 2019.
Dow: Structure Planned
Today’s move in the Dow’s structure indicates a significant move to the downside is planned. If the Dow moves up to 26,900 (+/-0.5%) by October 11, 2019 (+/-1 trading day), a high probability exits for the Dow to decline to 23,045 (+/-1%) before December 31, 2019.
Dow: 90 Years Later
Dow: 8 Trading Days
As of the close on October 1, 2019, the Dow is expected to move higher over the next 8 (+/-1) trading days before turning down. There is a very high probability (80% chance) that the Dow will hit a low of 25,928 (+/-1%) before November 5, 2019 (+/-1 trading day). There is also a 60% chance that the Dow will hit 24,951 (+/-1%) before the end of 2019.
(Disclaimer)
Dow: Decline and Volatility
Based on current futures trading data calculations, a significant amount of potential energy exists in the financial system to support a sharp decline in the Dow before the end of 2019. This decline could start as early as September 30, 2019 and move the Dow down to levels last seen during the week of December 17, 2018. A sharp rally is also expected to follow this decline with a recovery of at least 60%, followed by another decline. The volatility Index will move to extremely high levels during this time.
Dow: Structure Peak
A daily high of 27,272.17 occurred at 11:39 a.m. on September 19, 2019. This was within 0.5% of the projected closing high of 27,386.27 and one trading day earlier than expected, as noted on September 17, 2019. This peak is expected to be the starting point for a long term decline.
Dow: Peak Calculation
The Dow is currently within 2.2% of the 27,738.40 calculated on August 31, 2019. Daily trades indicate Market Makers are being held to a strict timeline with a projected closing high of 27,386.27 (+/- 0.5%) on Friday, September 20, 2019 or Monday, September 23, 2019. Upon reaching this target, Market Makers are expected to start the engrbytrade Eight Point Trading Model™ shown above. Preliminary calculations indicate a low of 19,000 (+/-2%) will occur after moving down from point 8 on the chart. A time frame of several months has been planned for this decline.
Dow: Tracking the Dow
The Dow is on track day-for-day toward 27,738.40 (+/- 1.0%) with a peak by September 24, 2019 (+/- 1 trading day). Following this peak, the Dow is still expected to start a long term decline with the first short leg down to 24,870 (+/-1.0%) by November 4, 2019 (+/- 1 trading day). If there are any changes to this scenario prior to September 24, 2019, they will be posted.
Dow: Long Term Peak
Short term calculations confirm a very high probability exists for the Dow to peak on September 24, 2019 (+/- 1 trading day). From September 24, 2019 a steady long-term decline in the Dow is expected to occur over the next two years. Minor adjustments have been made to the short term model shown below.
Current Projected Scenario (Model #2019-4, Rev.3.1)
Dow closing price on August 30, 2019: 26,403.28
The Dow is expected to:
Move up to 27,738.40 (+/- 1.0%) by September 24, 2019 (+/- 1 trading day)
Move down to 24,870 (+/-1%) by November 4, 2019 (+/- 1 trading day)
Move up to 26,558 (+/-1%) by November 19, 2019 (+/- 1 trading day)
Move down to 23,505 (+/-1%) by December 24, 2019 (+/- 1 trading day)
Dow: Extreme Volatility
Calculations based on the actions of market makers and structures they create, reveals a truncated rally with a peak expected in September, 2019. Extreme volatility will be the norm in the last quarter of 2019. Due to this volatility, calculations shown below are preliminary and are subject to change as Market Makers incorporate their adjustments. Overall, a decline in the Dow is expected to continue well into 2020.
Current Projected Scenario (Model #2019-4, Rev.3)
Dow closing price on August 23, 2019: 25,628.90
The Dow is expected to:
1. Move up to 27,605 (+/- 1.0%) by September 20, 2019 (+/- 1 trading day)
2. Move down to 24,870 (+/-1%) by November 4, 2019 (+/- 1 trading day)
3. Move up to 26,558 (+/-1%) by November 19, 2019 (+/- 1 trading day)
4. Move down to 23,505 (+/-1%) by December 24, 2019 (+/- 1 trading day)
Dow: September Peak
With today’s decline, preliminary model calculations show a market peak occurring on September 18, 2019 (+/- 1 trading day), during options expiration week. This peak is earlier than expected and indicates Market Makers may be adjusting their plans to start driving markets lower in early October. Until then, calculations will be reviewed daily to see if any adjustments are needed.
Dow: Pullback
Today’s short term pullback was a repeat performance of August 14, 2019 and provided Market Makers with the opportunity to accumulate additional inventory in order to move the Dow higher in September.
Dow: Filled the Gap
The August 18, 2019 gap in the futures market was filled today. Time to move up again.
Dow: Aramco’s IPO
Aramco has decided to move forward with their IPO near the market’s all-time high. A sign that the top is very close.
Dow: October Peak
A review of additional data with the recent discussion surrounding GE indicates a truncated rally going into October. The following model reflects extreme volatility over the next few months. If the Dow aligns with the first three moves noted below, there is a high probability a steep decline will follow in the fourth move.
Current Projected Scenario (Model #2019-4, Rev.2)
Dow closing price on August 16, 2019: 25,886.01
The Dow is expected to:
1. Move up to 27,605 (+/-1.0%) by October 9, 2019 (+/-1 trading day).
2. Decline to 23,890 (+/-2%) by November 18, 2019 (+/- 1 trading day)
3. Move up to 25,952 (+/-2%) by December 3, 2019 (+/- 1 trading day)
4. Decline to 16,563 (+/-2%) by , January 17, 2019 (+/- 1 trading day)
Dow: Exchange Insider Accumulation
A significant amount of stock in the Technology Sector was accumulated by Exchange Insiders over the last ten trading days. This accumulation is reflected in the latest computer model run and indicates the Dow is now projected to peak by October 9, 2019 (+/-1 trading day) with a level of 29,923 (+/-1%). The Current Projected Scenario Model will be revised at a later date to reflect this change.