Intermarket structural analysis research
A review of futures trading data revealed a correlation between E-Mini S&P 500 engrbytrade™ signals received on May 30, 2023 and September 11, 2007. The E-Mini signals are unusual and would not be expected prior to a move in the Dow or S&P500. But, when placing these signals within the context of a Fibonacci structure, it does provide some insight to an expectation of markets changing direction.
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In March 2000, the Internet Bubble was well underway with Intel going parabolic. Intel ultimately survived the Dot Com bust, but numerous computer and technology companies did not survive and were “disestablished” in the decade that followed.
Today artificial intelligence has introduced the AI Bubble, and it is well underway with NVIDIA leading the way. Comparing Intel in March 2000 to NVIDIA in March 2024 provides some insight to the relative position of today’s bubble. NVIDIA’s current position aligns with the Dow ratio measurement taken on March 3, 2024. Optimism will continue as it did going into March – April 2000, when many tech stocks peaked.
Note that this information is for educational purposes only and not a recommendation.
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Based on angles discussed on March 2, 2024 where algorithms appear to continue duplicating the 1973 Dow structure, an Engrbytrade™ custom ratio measurement was taken from reference points where geometric lines intersect rather than using traditional Fibonacci structure points. Based on the 1973 Dow structure shown below, a brief decline is still expected, followed by a 1.65% move up above the February 23, 2024 high to reach 45,763.88 (+/- 1%) before starting a long term decline.
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The following chart provides a point eleven of thirteen update to reflect angles discussed on March 2, 2024.
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The rise in the Dow and S&P 500 between October 2023 and March 2024 has been similar to what occurred between October and December 1972. The Dow moved upward along a 41.46 degree trend line while the S&P 500 followed a 43.23 degree trend line. This would indicate the 2023 – 2024 structures were developed by algorithms based on what occurred in late 1972. The expected result of this move is a brief decline followed by one more move upward before starting a long decline in 2024.
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It was noted on February 12, 2024 that preliminary calculations indicated placement of the final point in a 1973 structure model would be expected to occur within a 2024 peak range of 38,559 +/-5.963% (36,260 to 40,859). On Friday, February 23, 2024, the Dow hit a high of 39,282.3. Market Makers, Exchange Insiders, Bankers, et al. are at a crossroad where they need to decide if the 1973 model structure will continue with a decline in 2024, or adapt to another structure and continue moving higher. This also applies to the S&P500. Ultimately, the end result will be a significant decline and depression for either choice.
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Since mid-December 2023 a series of descending triangles have appeared that include Apple, Boeing, Caterpillar, Walgreens, and the Japanese Yen. This is very similar to what occurred between April – September 2008 with stocks such as Apple, Chevron, Disney, and Goldman Sachs. Currency descending triangles in 2008 included the British Pound, Canadian Dollar, and Swiss Franc. Based on the current Japanese Yen descending triangle, it is a preliminary indication of positioning expected in the U.S. Dollar before moving higher, as noted on January 20, 2024.
Note that this information is for educational purposes only and not a recommendation.
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On January 26, 2024 and February 4, 2024 it was noted how Market Makers move a group of stocks without revealing their intentions to the public while providing minimal impact on the Dow’s movement. Between February 1, 2024 and February 20, 2024 Market Makers conducted selective declines in Amgen, Cisco, Honeywell, and Verizon. In order to avoid a rush of broad retail selling an offset to this decline was setup with a move up in issues such as American Express, Caterpillar, Salesforce, Disney, JP Morgan, Merck, Travelers, and Walmart. This was conducted to maintain the Dow within 50 point range between February 1, 2023 and February 20, 2023.
“Like the musicians in an orchestra, the ( Market Makers formerly known as Specialists) who conduct the movements of each of the Dow stocks work on behalf of their own interests while at the same time working for the fulfillment of the objectives of the system as a whole.”
Richard Ney, Making it in the Market, 1975, page 98
Note that this information is for educational purposes only and not a recommendation.
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On February 5, 2024 a review of the Dow Transportation Index revealed similar angles in the 2007 – 2008 and 2021 – 2024 chart structures. The Dow Utility Average Index also contains a similar angle of 30.89 degrees in the declining structures shown below.
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Using the 1973 Dow chart structure as a model discussed on February 11, 2024, preliminary calculations indicate placement of point 13 on the following chart would be expected to occur within a 2024 peak range of 38,559 +/-5.963% (36,260 to 40,859).
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On January 12, 2024, a 12 point chart was posted to illustrate a repeating 2018 structure. The Dow index has continued to follow this structure, as well as the 1971 – 1973 structure shown below.
Based on sentiment presented on February 7, 2024 and February 10, 2024, a decline is expected to start over the near term.
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Robert Prechter: Market Forecast 2024
This video presentation provides a description of specific indicators measuring investor optimism and pessimism. Engrbytrade™ does not use Elliott wave principles due to the fact that wave labeling is subjective and Market Makers, with support from the financial media, control investor’s emotions as they raise and lower prices. Structural measurements are taken based on proprietary intermarket technical analysis of financial data and chart structures created during the course of specific time frames.
Market Makers (formerly known as Specialists)
“Like the musicians in an orchestra, the specialists who conduct the movements of each of the Dow stocks work on behalf of their own interests while at the same time working for the fulfillment of the objectives of the system as a whole.”
Richard Ney, Making it in the Market, 1975, page 98
A review of Engrbytrade™ Daily Trade Pattern Structure Calculation results between November 17, 2023 and January 17, 2024 indicate a significant change in direction to lower levels is expected during 2024. The results are similar to what occurred between September 17, 2021 and December 10, 2021. Change in direction signals are identified in the charts below.
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As part of a wider market structural review, the Dow Transportation Index provides some additional insight on the state of the market. Since October 2022 the Transportation Index has developed a similar form of its 2008 chart structure. In addition to this, the Transportation Index stopped moving higher after the beginning of 2024, unlike the Dow Jones Index moving to new highs.
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On January 26, 2024, a decline preview of the Dow was provided to show how Market Makers initiate a decline without revealing their intentions to the public. The next phase for Market Makers is to coordinate a selected tech stock decline. This will be done using Apple, Cisco, Honeywell, and Intel while the public is distracted with new highs in the Dow.
“In a bear market specialists (currently known as Market Makers) will invariably advance the Dow on a Friday in order not to allow pessimism to build over a weekend—…” Richard Ney, Wall Street Gang, 1974, page 92
Note that this information is for educational purposes only and not a recommendation.
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A ratio measurement between October 17, 1972 and January 11, 1973 was taken with a peak result of 3.35, as shown in the bottom chart. The same measurement was taken between October 27, 2023 and January 30, 2024 with a peak result of 3.2043. The January 30, 2024 measurement of 3.2043 is within 4.3% of the January 11, 1973 measurement of 3.35. Today, a decline is expected based on key factors noted on January 29, 2024. Additional data will be needed to see if a decline similar to the first quarter of 1973 occurs.
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Starting in mid-November 2023, Dow Stochastic and DeMARK indicators moved into their overbought range. By December 19, 2023, a variety of indicators such as the Relative Strength Index, Chalkin Oscillator, Price Oscillator, and Random Walk Indicator hit their overbought range peak. During this rally it was observed that Market Makers were consistently distributing extremely large blocks of stock. When their distributions were complete at the end of 2023, Market Makers started moving prices lower in Dow stocks that are not in the top ten Dow Index Component Weights of Stocks list. This group of stocks will provide a minimal impact on the Dow’s movement and give Market Makers the ability to initiate a decline without revealing their intentions to the public. The charts below provide a decline preview of what’s to eventually occur with the Dow Index.
Note: The following are strictly for illustration purposes only, not recommendations.
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On December 27, 2023 it was noted that Market Makers were expected to push the Dow Jones Index to 38,120, which is 100 times the close on September 3, 1929.
Today the NYSE Dow hit a high of 38,109.20 and the CBOT Mini Dow Jones Industrial – $5 March 24 contract hit a high of $38,209.00. The average between the two is 38,159.10. The Dow Jones Industrial Index Bullish Sentiment is currently in a position that is similar to where it was on August 11-19, 2022, December 1-2, 2022, and July 26, 2023, as shown in the 2nd chart below. Overall, there is a high probability of a decline in 2024 that is similar to what occurred between November 2021 and October 2022 based on daily Dow calculation results from November 17, 2021 and December 15, 2023. This aligns with the expected decline in the 10-Yr Note interest rate in 2024.
Recent changes in the Dow chart structure have prompted a review of the Engrbytrade™ 1974 Model in comparison to what was developed between March 23, 2022 and January 23, 2024. Initial observations indicate a decline could extend into 2025.
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Using the Engrbytrade™ hypothesis that market structures are created and implemented during a course of predetermined time frames, the following is one example where the Dow has been repeating its 2018 chart structure since August 2022. The Dow is now in a peak range similar to where it was in September – October 2018 with bullish sentiment starting to decline. Preliminary calculations indicate the Dow will move below the October 2022 low of 28,660.
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The Dow chart structure developed between July and October 2018 is similar to what was developed between October 2023 and January 2024. Since the current Fibonacci scale measurement of 2.837, as shown below, is within 1.4% of the 2.878 measurement developed in September 2018, there is a possibility that a very brief rally could occur before the Dow starts moving sharply lower.
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The following is one example of discussions that took place between December 11, 2023 and December 19, 2023 for the purpose of increasing market optimism near the top as Market Makers distributed (sold) millions of shares of stock from their company trading accounts.
Options interest is hitting a record high and Wall Street is racing to meet demand
The Stock Market Is Rigged – Richard Ney
Between 2006 and 2008 the NYSE used the financial crisis as cover to quietly transition from a Specialist Unit system to a Designated Market Maker Unit system. Regardless of the new rules, Market Makers continue to use their merchandising operation to sell at the highs and buy at the lows.
“DMMs were conceived as a new type of market maker for a primarily electronic trading environment that had the ability, and the affirmative obligation, to contribute liquidity in a security by trading competitively for the DMM unit’s dealer account. DMMs were designed to function in a manner substantially different from the manner in which specialists had previously functioned on the Exchange.”
Federal Register Document Citation 88 FR 77625, pages: 77625-77642
The Dow moved above its 261.80% Fibonacci level, as noted on December 15, 2023.
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The Dow has moved quickly over the last 33 trading days and is expected to pierce the 261.8% Fibonacci level today, as shown in the chart below. Another example of this type of move occurred between October 18, 1999 and January 14, 2000, within a 63 trading day period. A sharp decline followed after mid-January 2000.
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Comparing data structures covering the last 26 years the Dow has taken shape on a scale that is 100 times larger than the 1913 to 1929 model. The charts shown below compare values of the Dow between 1913 – 1929 and 1997 -2023.
Note that the price range in the Dow on August 23, 1929 (370.0 – 378.70) x100 would overlap with the trading range of 37,051.5 – 37,287.5 on December 14, 2023.
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