Category: Dow

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.

Charts courtesy of StockCharts.com.

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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 2^nd 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.

Charts courtesy of StockCharts.com.

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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.

Stock charts courtesy of StockCharts.com.

Disclaimer

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.

Stock charts courtesy of StockCharts.com.

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The Dow moved above its 261.80% Fibonacci level, as noted on December 15, 2023.

Stock charts courtesy of StockCharts.com.

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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.

Stock charts courtesy of StockCharts.com.

Disclaimer

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.

Stock charts courtesy of StockCharts.com.

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The first chart shown below provides the Dow’s current calculated trajectory. The second chart is a 2006 – 2008 trajectory for the Dow illustrating how the current trajectory should move.

The Dow’s move above its current line of trajectory is similar to what occurred in November and December of 1916. In the last half of December 1916 the Dow dropped quickly below its line of trajectory and continued to move lower resulting in a 40% decline by December 19, 1917.

The Dow is currently expected to move back in line with its calculated trajectory and continue on its projected line of descent going into November 2024.

Stock charts courtesy of StockCharts.com.

Disclaimer

Between June 1, 2023 and December 7, 2023 the Dow has been moving methodically through a trading process similar to what was produced between September 17, 2021 and January 6, 2022. Although the price chart structures are different, daily  engrbytrade™ trading calculations produced peak signals on July 21, 2023, September 7, 2023, and November  21, 2023 that are similar to the peak signal pattern produced on October 26, 2021, December 8, 2021, and January 4, 2022.

In addition to the signals noted above, Dow E-Mini futures signals produced on October 26, 2021, December 10, 2021, and January 6, 2022 are similar to the peak signal patterns produced on July 21, 2023, September 8, 2023 and November 22, 2023.

It was also observed that a pattern of extremely large block trades crossed the tape within the trading areas of interest shown below between June 2023 and December 2023, just as they did between September 2021 and January 2022. Based on this comparison of peak signals, a decline is still expected.

Stock charts courtesy of StockCharts.com.

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On November 2, 2023 the following charts were included with a comparison between 2018 and 2023 10-Yr note rates when the Dow was expected to move up to 35,078 +/- 1%. Since November 2, 2023 the Dow has moved up in a chart structure similar to what was developed between November 2, 2018 and November 9, 2018. On November 15, 2023 the Dow hit a high of 35,051.10. This move indicates 10-Yr rates could start to move lower sooner than expected while stock markets decline.

Stock charts courtesy of StockCharts.com.

Disclaimer

Daily engrbytrade™ structural calculation results have shown the Dow’s decline from July 21, 2023 to October 6, 2023 is similar to what occurred between October 26, 2021 and December 1, 2021. To put this in perspective, the move down from July to October 2023 is part of a long term process for moving the Dow to lower levels. The Dow is currently in a process of repeating a move similar to what occurred between December 2, 2021 to January 5, 2022 in order to fill the Dow futures gap created on August 1, 2023 at 6:00 p.m. and S&P500 futures gap created on August 2, 2023 at 9:30 a.m. This will also provide Market Makers with the means to distribute their inventory before moving markets lower.

Note: The Dow structure developed in the last quarter of 2023 is not expected to be an exact replica of December 2021.

Stock charts courtesy of StockCharts.com.

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July 21, 2023 – October 6, 2023

October 26, 2021 – December 1, 2021

On October 19, 2023 it was noted that the Dow structure was in a similar position to where it was on March 22, 2023. Additional research revealed the September 1, 2023 to October 26, 2023 Dow structure is very similar to its structure that was developed between September 1, 2023 and October 12, 2022. Large block trades are also in a pattern that is similar to what occurred between September 26, 2022 and October 12, 2022. A move up to 35,078 +/- 1% is still expected.

Stock charts courtesy of StockCharts.com.

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The charts below are a comparison of Head and Shoulder Reversal formations during 2023 and 2007. The current move up is expected to be similar to what occurred between November 27, 2007 and December 10, 2007.

Stock charts courtesy of StockCharts.com.

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2023

2007

On September 15, 2023 it was noted that the topping process was complete and similar to what occurred between late 2021 and early 2022. The engrbytrade™ mini Dow futures signal confirms a long term decline is in progress and is expected to continue through 2024.

Stock charts courtesy of StockCharts.com.

Disclaimer

2023

2022

On October 12, 2023, it was noted that a decline structure setup going into the last quarter of 2023 is similar to what occurred in 2018. A detailed review of the 1973 vs 2023 19 point chart posted on September 29, 2023 against the charts shown below revealed that Market Makers shifted away from the 1973 model to a 2018 chart structure starting in mid-March 2023, just  prior to the start of interest rates moving higher in the 2^nd quarter of 2023. A move up to 34,598 +/- 1% by October 18, 2023 is expected before starting a sharp decline.

Stock charts courtesy of StockCharts.com.

Disclaimer

On October 10, 2023 it was noted that the 2018 and 2023 10-Yr interest rate charts had similar underlying characteristics based on 10-Yr Non-Commercial futures trader’s positions. The following 2023 Dow chart also illustrates a decline structure setup going into the last quarter of 2023 that is similar to what occurred in 2018.

Stock charts courtesy of StockCharts.com.

Disclaimer

The Dow is currently expected to move higher based on changes in U.S. Dollar future positions and recent changes in relative value of the Euro and Silver. The U.S. Dollar and 10-Yr Note are expected to move lower in 2023.

The following charts provide a comparison of 1973 to 2023 turning points. As of September 29, 2023 the Dow is estimated to be in a similar position to where it was on August 22, 1973.

Stock charts courtesy of StockCharts.com.

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