Intermarket structural analysis research
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.
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.
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.
The following charts show the Dow appears to be following its 2021 structure time frame. Another turn upward from the 8.92 degree trend line will confirm this market structure was created for a predetermined time frame. Using the current time frame a peak in September – October 2024 would be expected.
Chart courtesy of StockCharts.com.
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.
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.
Veteran Wall Street Trader Reveals Strategies Used At Stock Exchanges
Richie Naso points out that algorithms and Market Makers control the market.
This is only for educational purposes. Not financial advice.
The Dow 2003 – 2024 monthly chart structure continues to follow the Dow 1918 – 1929 monthly chart structure, as shown below. Based on these structures it indicates the Dow still has room to move higher and pass the 461.80% Fibonacci level. This would certainly take sentiment to a level we have not seen for some time.
Charts courtesy of StockCharts.com.
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.
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.
Since June 2022 the NAAIM exposure index has been moving upward on an 18.32 degree trend line. Based on this trend it appears, at the moment, there is room for markets to move higher.
Chart courtesy of StockCharts.com.
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.
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.
While the AI bubble sends a small group of tech stocks into a parabolic rise, Fred Hickey notes their valuations are similar to the Dutch tulip and South Sea mania.
Is A Meltdown In Tech Stocks Nearing As Doubts Of A.I.’s Impact Mount? | Fred Hickey
Although the physical structures shown below are similar, underlying technical indicators provide a relationship as well. The Relative Strength Index (RSI) is one example. A RSI review shows a value of 82.48 for November 24, 1972 and 86.86 for December 19, 2023.
Charts courtesy of StockCharts.com.
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.
The Dow continues to move in a pattern similar to the last half of 2021. Within this pattern very large block trades continue to cycle volatility. The last chart is an indication of where these trades occurred.
Charts courtesy of StockCharts.com.
Algorithms appear to be repeating the first week of May 2024. Between May 29, 2024 and June 5, 2024, a series of seven figure block trades crossed the tape at the close. This is very similar to what occurred during the last two weeks of April 2024. It is also similar to what occurred in the futures market between December 1, 2021 and December 6, 2021. The Dow is expected to continue moving higher, as it did in May 2024 until Market Makers start to move very large block trades again.
Charts courtesy of StockCharts.com.
The following model perspective update provides key points on the Dow that align with 1971 – 1973 structures. The Dow ultimately hit its low point in late 1974. Based on this update, the Dow currently aligns with mid-January 1973.
Charts courtesy of StockCharts.com.
The move on Friday, May 31, 2024 was a culmination of the following factors:
A brief move upward is expected before a decline is initiated.
Stock charts courtesy of StockCharts.com.
It appears Market Makers are starting to step in with very large seven figure block trades again. It could be a repeat of December 2021. If this is the case, Market Makers are in the process of developed a structure that was created between June 2021 and December 2021 in preparation for a larger decline.
Stock charts courtesy of StockCharts.com.
The Dow changed direction three times between March 2024 and May 2024, as shown below. Groups of very large, seven figure block trades were observed during each change in direction. In the sample group of block trades under observation, two large cap tech stocks stood out. Since this sample group was relatively small, there may be other companies that fit this profile. Additional work will be needed to reveal any consistent patterns.
Stock chart courtesy of StockCharts.com.
The Dow Jones Transportation Index typically moves with the Dow Jones and S&P500 indices. There have been periods in the past when the Transportation Index lagged behind other indices, ultimately resulting in a decline of major stock indices. The most recent lag period occurred between October 2019 and January 2020 prior to a significant decline going into March 2020. The charts below currently show a significant Transportation Index lag relative to the Dow Jones and S&P500 indices. A decline is still expected.
Stock charts courtesy of StockCharts.com.
Taking a closer look at the Dow on a 95 year timeline, the 1929 trajectory shown below is currently in alignment with a move up in mid-2024 prior to starting a decline.
Additional research shows Engrbytrade™ daily trade pattern structure calculation charts reflect patterns identified in the following Dow charts. The 2024 angle of support is 8.92 degrees during periods of Exchange Insider distributions. A pattern similar to this occurred during mid-1972 and late 1973 to early 1974 using a support angle of 15.39 degrees. It also occurred between March 2007 and August 2007 with a support angle of 20.03 degrees. Large quantities of stock were distributed during this time frame.
The Stock Exchange abets its specialists’ merchandising strategies by training investors to address their attention to business statistics, economic data, and other concepts that have but limited relevance for investment purposes.
Richard Ney, Wall Street Gang, 1974, page 85
Stock charts courtesy of StockCharts.com.
