Intermarket structural analysis research
A review of large block trading patterns, comparable fear and greed index readings and engrbytrade™ futures trading data calculations indicates the current Dow and S&P500 chart structures are in a similar position to where they were on March 22, 2023. This update indicates a move up to 35,078 +/- 1% on the Dow and 4522 +/-1% on the S&P500 are expected.
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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.
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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.
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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 2nd quarter of 2023. A move up to 34,598 +/- 1% by October 18, 2023 is expected before starting a sharp decline.
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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.
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There is a 30% chance the Dow will decline to 32,873 along with the S&P500 dropping to 4216 for a consolidation before markets move higher. Daily Engrbytrade™ E-Mini Dow futures calculations, along with standard technical indicators such as the NYSE Market Thrust, CBOE Put/Call Ratio, and CBOE Options Equity Put/Call Ratio indicate a move up is still expected.
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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.
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On September 15, 2023 daily Engrbytrade™ price to volume positioning calculations indicated the Dow is expected to make a brief move up to 35,630. This move is on a smaller scale compared to calculations for what occurred between March 17, 2023 and May 1, 2023. It also appears to be a coordinated effort in support of filling the S&P500 August 1 – 2, 2023 gap.
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On September 9, 2023 it was noted that a 3rd signal of repetitive computer program selling had not appeared within a 4 trading day window of the September 8, 2023 E-Mini Dow futures signal. On September 14, 2023, 4 trading days after the E-Mini Dow futures signal on September 8, 2023, a process of repetitive computer program selling was observed. This appears to have completed the topping process, which is similar to what occurred between late 2021 and early 2022, as shown in the chart below.
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On August 19, 2023 actual Fibonacci percentages were calculated for a comparison between 1987 and 2023. As of September 8, 2023, the Dow continues to stay within its comparative range from 1987. Very large block trades observed between late August 2023 and early September 2023 appear to be similar in nature to what was observed in October 2022. At this point the Dow is expected to continue moving higher.
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On September 6, 2023 it was noted that two out of three Mini Dow futures signals were received. It was also observed that an indication of repetitive computer program selling appeared within a four day window of each of the first two Mini Dow futures signals.
On September 8, 2023 a 3rd Mini Dow futures signal was received indicating the topping process is near completion. At this point, repetitive computer program selling has not appeared within a 4 day window, as it did with the first two signals. The following charts show a comparison between the February 2023 to September 2023 structure and the August 2021 to January 2022 structure.
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On July 31, 2023, it was noted that Engrbytrade™ Dow daily derivative related calculations from CBOT Mini Dow futures trading data indicated a topping process was in progress. As of September 5, 2023 two out of three Mini Dow futures signals have been received. It was also observed that an indication of repetitive computer program selling appeared within a four day window of each Mini Dow futures signal. Computer program selling is not an unusual activity, but being so close to each Mini Dow signal should be noted. The following charts show a comparison between the February 2023 to September 2023 structure and the August 2021 and January 2022 structure.
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The 2023 structure illustrated below indicates Market Makers are trying to repeat the performance of 2019 – 2020. If the current Dow structure continues to follow the 2019 – 2020 pattern and moves above its 161.80% level there is a high probability of a sharp decline.
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On July 27, 2023 it was noted that a brief pullback would be expected before moving higher. On August 12, 2023 change in direction calculations continued to support a move higher. The Dow charts below have been updated to reflect their actual Fibonacci percentages for 2023 and 1987. At this point there is a 7.726% difference in the Fibonacci peak of August 2023 and June 1987.
Between August 7, 2023 and August 17, 2023, numerous large block trades were observed in pre-market trading sessions. Over the last year, this type of trading activity is typically been seen at the market close. It was also taking place during a period of time when the CBOE Put/Call Ratio was moving higher, as shown in the chart below. A move higher is still expected. Note that this expectation could change quickly, just as it did during the last week of August 1987 and first week of September 1929.
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Daily Engrbytrade™ Dow calculations discussed on August 6, 2023 were supported with a secondary confirmation in the daily Engrbytrade™ Dow “Change in Direction” calculation on August 8, 2023. A similar change in direction calculation result was received on October 6, 2021.
In addition to this, an observation was made during a review of intraday trading data that Market Makers appeared to be accumulating stock of large cap tech stocks between August 8, 2023 and August 11, 2023, as prices moved sideways during the week.
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Daily Engrbytrade™ Dow calculations show price action relative to volume data on August 4, 2023 is similar to what was developed on December 1, 2021, March 3, 2022 and November 2, 2022. A move upward is expected to continue in August.
Observation: During July 2023 a steady stream of billion dollar trades crossed the tape. Hedge funds and institutions appear to be chasing tech stocks.
Traders Are Risking It All on Bets That Market Boom Will Last
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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.
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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.
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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.
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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).
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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.
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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)
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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.
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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.
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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.
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