The Dow continues to move along its 127.20% Fibonacci level shown in the chart below. A brief pullback is still expected to track with the Dow’s pullback in late June 1987 before moving higher.
Stock charts courtesy of StockCharts.com.
Dow: Mini Dow Futures Signal
Engrbytrade™ Dow daily derivative related calculations from CBOT Mini Dow futures trading data indicate a topping process is in progress. This same process occurred between October 26, 2021 and January 7, 2022 when three separate signals were provided during this time frame as shown in the 2021 – 2022 chart below. Calculations show this process is repeating with two out of three signals occurring on June 13, 2023 and July 25, 2023. A third signal is expected to occur in August 2023, but additional data will be needed to confirm this. If this does occur in August, it would align with expectations noted on July 27, 2023.
Stock charts courtesy of StockCharts.com.
Dow: 127.20%
With the Dow breaching its 127.20% Fibonacci level, a brief pullback is expected before moving higher. A pullback similar to this started on June 23, 1987, as shown in the chart below.
Stock charts courtesy of StockCharts.com.
Dow: October 2024 Low
As the Dow chart structure shown below continues to develop, long term Engrbytrade™ trade markers point to a low in October 2024. Whether by design, or a result of built-in programming, this 1997 – 2023 Dow structure appears to provide an indication of where this chart will ultimately end. Prior to moving lower the Dow is expected to hit 37,744 (+/-1%) by October 5, 2023 (+/-1 trading day).
Stock chart courtesy of StockCharts.com.
Dow: Upper Trend Line Breakout
On July 13, 2023 it was noted that Market Makers would need to decide on a course of action within the current ascending triangle. Today, it appears they have made a decision to move higher and follow a path that is similar to what occurred in 1929, 1973, and 2020. Based on their move above the upper trend line the Dow is expected to hit 37,744 (+/-1%) by October 5, 2023 (+/-1 trading day) before a significant collapse occurs.
Stock chart courtesy of StockCharts.com.
Dow: Infinite Liquidity
If the Dow closes above its upper trend line shown in the chart below, it provides Market Makers with an opportunity to draw in retail investors, hedge funds, pension funds, etc. using “infinite liquidity”. At this point, it is up to the Market Makers to decide what their course of action will be. History has shown the Dow would be expected to move higher for an average of 56 trading days before hitting a peak and then falling dramatically. The following dates and related trading days illustrate this.
Ascending Triangle Breakout History
June 28 – September 3, 1929 (54 trading days)
November 3, 1972 – January 11, 1973 (44 trading days)
November 1, 2019 – February 12, 2020 (69 trading days)
Average number of breakout trading days before a decline starts = 56
56 trading days covers July 13, 2023 to October 2, 2023 (200% Fibonacci rise = 37,744)
Stock charts courtesy of StockCharts.com.
Dow: Ascending Triangle 2019 vs 2023
There is a 20% chance the Dow will continue to move higher if it breaks out of the ascending triangle shown below. If this occurs it will end badly, just as it did in 2019 -2020.
Stock charts courtesy of StockCharts.com.
Dow: Big Block Trade Chart Structures
Reviewing the Dow big block trade structures discussed on July 11, 2023 at 6:21 AM, it appears that the following 2021 and 2023 1-hour chart structures are similar. This implies Market Makers and/or embedded computer algorithms use a strategic method to distribute very large blocks of stock.
Stock charts courtesy of StockCharts.com.
Dow: Big Block Trades
Daily Engrbytrade™ Dow calculations and big block trading activity between May 31, 2023 and July 5, 2023 indicate several of the most active Dow stocks are exhibiting a unique trading pattern in large blocks over 1 million shares. This pattern is similar to what occurred between October 19, 2021 and November 22, 2021. Activity of this nature is typically expected when Market Makers distribute big blocks to large investors or institutions prior to a decline.
Stock charts courtesy of StockCharts.com.
Dow/S&P500: 1929 vs 2023 Alternate Path
Expectations currently point to a decline in the Dow and S&P500. Futures trading data also indicates a possibility exists for an additional alternate path to a higher level. On a macro level selective commercial futures trading product positions for the S&P500 from 5/30/23 indicate a potential exists for the index to trend higher, even with the significant volatility that has occurred in 2022 – 2023.
The Dow chart below refers to recent notional turning points relative to 1929. Volatility, sentiment, and futures trading data will need to be monitored closely to see if markets continue to move higher after this near term decline.
Stock chart courtesy of StockCharts.com.
Dow/S&P500/NASDAQ: Market Thrust
Don’t forget to keep an eye on Market Thrust for a change in market direction.
Stock charts courtesy of StockCharts.com.
Dow/S&P500: CBOE Put/Call Ratio
On June 2, 2023 the CBOE Put/Call Ratio hit a low of 0.76. This is in the range of what occurred on November 11, 2022 when the ratio hit a low of 0.75. The Dow declined 5.3%, and the S&P500 declined 2.9%.
Stock charts courtesy of StockCharts.com.
Dow/S&P500/NASDAQ: Media Announces Bull Market
When you see all media outlets proclaiming a bull market has started, it is an indication that Market Makers have sold their entire inventory and sold short. Expect a decline to begin, just as it did during the last half of May in 2008.
Headlines from June 9, 2023
Reuters
Behold Wall Street’s new bull market, maybe
Wall Street Journal
Enters New Bull Market as Big Tech Lifts Indexes
AP News
The S&P 500 is in a bull market.
CNN
It’s official. We’re in a bull market
ABC News
The S&P 500 is in a bull market.
NASDAQ 100: 67.73% Retracement
On June 2, 2023 it was noted that the NASDAQ 100 structure is in the process of completing a 67.73% retracement pattern. In addition to this the NASDAQ 100 is also completing a 67.73% retracement pattern that is similar to what occurred in the Dow between January 11, 1973 and October 29, 1973.
Stock charts courtesy of StockCharts.com.
Dow: Record Decline Reading
Daily Engrbytrade™ calculations for May 31, 2023 show a record decline reading that is the highest since calculations began in January 2019. It was also observed that a significant number of large block trades in the tech sector crossed the tape.
Stock chart courtesy of StockCharts.com.
Dow/NASDAQ100: $1 Trillion Companies
With NVIDIA being the latest to hit the $1 trillion valuation mark, it should be noted that there are companies, such as Apple, Microsoft, Alphabet, Amazon, Meta (Facebook) and Tesla that have faced declines after reaching their $1 trillion valuation point. The following history provides some perspective on this.
August 2, 2018 – Apple is now a $1 trillion company
August 2, 2018 – $50.216
January 3, 2019 – $34.67
Declined 30.95%
September 4, 2018 – Amazon becomes second trillion-dollar Company in U.S.
September 4, 2018 – $101.97
December 24, 2018 – $67.19
Declined 34.10%
April 25, 2019 – Microsoft is now a $1 trillion company
April 25, 2019 – $126.18
June 3, 2019 – $117.51
Declined 6.87%
January 16, 2020 – Google parent Alphabet is now a $1 trillion company
January 16, 2020 – $72.50
March 23, 2020 – $52.70
Declined 27.31%
June 28, 2021 – Facebook (Meta) has become a $1 trillion company
June 28, 2021 – $355.64
November 3, 2022 – $88.91
Declined 75%
October 26, 2021 – Tesla is now worth more than $1 trillion
October 26, 2021 – $339.47
January 6, 2022 – $113.06
Declined 66.6%
Dow/NASDAQ100: 61.8% Retracement
The November 22, 2021 to May 30, 2023 NASDAQ 100 structure is in the process of completing a 61.8% retracement pattern that is similar to what occurred in the Dow between August 25, 1987 and October 2, 1987.
Stock charts courtesy of StockCharts.com.
NASDAQ/Dow/SP500: Artificial Intelligence bubble
Dot Com Bubble Wall Street Documentary
December 2, 2018
Today you can substitute “Dot Com bubble” with “Artificial Intelligence bubble”.
Dow/Interest Rates: September 26, 2018
Intermarket futures trading data 10-Yr note calculations indicate that on May 23, 2023 the Dow was in a structural position similar to where it was on September 26, 2018. A 23% decline is still expected, as noted on May 21, 2023.
Stock charts courtesy of StockCharts.com.
NASDAQ/Dow: 2023 vs 1930
The development of parabolic structures is progressing. An Engrbytrade™ model representation of parabolic structures provides a comparison between the 1913 – 1933 Dow structure and 1993 – 2023 Dow structure. This parabolic structure also crosses over to the NASDAQ Composite, as shown below. A sharp decline in the NASDAQ is expected in 2023.
Stock charts courtesy of StockCharts.com.
Dow: 1971 vs 2023
Between April 28, 1971 and August 10, 1971, the following 1971 chart shows a descending broadening wedge formed in the Dow structure. From a closing low of 839.60 on August 10, 1971 the Dow moved back up above its 61.8% retracement level between late August 1971 and early September 1971 before starting a decline that would end on November 23, 1971.
Between December 1, 2021 and October 13, 2022 the 2021 – 2023 chart shows a descending broadening wedge formed in the Dow structure. From a closing low of 30,038 on October 13, 2022 the Dow moved back up above its 61.8% retracement level between November 2022 and May 2023. It appears the Dow is in the process of repeating the 1971 structure shown below. Using this model, the Dow is expected to move down to 25,738 by mid- July 2022. This 23% decline would be twice as large as the 11.5% decline from October 7, 1971 (901.8) to November 23, 1971 (798).
Stock charts courtesy of StockCharts.com.
Dow/S&P500: Machine Selling
Markets Are About to Be Hit With a Wave of Machine Selling Sending Stocks Crashing as Momentum Wanes
Dow: May 13, 2023 Calculation Update
On May 5, 2023 calculations indicated a decline to 31,465 by May 15, 2023 was expected based on an initial chart structure similar to what was developed between February 10, 2022 and February 16, 2022. Additional data from distribution time frames, daily Engrbytrade™ calculations, structural calculations and Fibonacci measurements indicate Dow algorithms are in the process of recreating a chart structure similar to what was developed during January 2022, as shown in the charts below. A sharp decline to 30,808 (+/-1%) is expected during options expiration week going into May 19, 2023 (+/- 1 trading day).
Stock charts courtesy of StockCharts.com.
Dow/S&P500: 1973 Point 14
Based on the 1973 Model Representation update shown below, the Dow and S&P500 are still within range of Point #14. It was observed that computers initiated a series of repetitive programs during the last week of April 2023. This is similar to what occurred during the second week of February 2023. A decline is still expected.
Stock charts courtesy of StockCharts.com.
S&P500/Dow: Decline to May 15, 2023
The declining S&P500 and Dow 1-hour futures charts are in the process of developing chart structures that are similar to 1-hour futures charts developed between February 10, 2022 and February 16, 2022. Based on this development, the S&P500 futures chart is expected to move down to 3887 by May 15, 2023 and the Dow futures chart is expected to move down to 31,465 by May 15, 2023.
Stock charts courtesy of StockCharts.com.
