Category: Nasdaq

Based on extremely large block trades crossing the tape over the last four weeks, it appears capital has been moving out of stocks. This aligns with what occurred in August 2022 and August 2023 when active managers were reducing their risk exposure. In order for a sustainable rally to continue the index would first need to drop below the lower trend line with a reading of 60 or below. This would provide Market Makers with an opportunity to accumulate additional inventory before moving prices higher.

Note that this information is for educational purposes only and not a recommendation.

Source: National Association of Active Investment Managers

Disclaimer

The Dow and S&P500 chart structures between October 7, 2024 and January 23, 2025 are similar to the Dow and S&P500 chart structures between July 29, 1929 and October 11, 1929. Current conditions noted on January 21, 2025 showed a repeat of the October and November 2023 chart structure with the potential of moving higher in 2025. This could change quickly depending on what the Fed does with interest rates on January 29, 2025. It is a wait and see situation with the Fed.

Note that this information is for educational purposes only and not a recommendation.

Stock chart courtesy of StockCharts.com.

Disclaimer

Apple has declined 11.2% since December 26, 2024. As Apple continues to decline, the press will provide various excuses to retail investors. The press will never mention anything about Market Makers selling (distributing) big blocks of stock to institutions. Reviewing the 2024 – 2025 chart below, a continuous move upward would have been expected using an ascending triangle. There was some 2024 year-end big block selling. But, since then extremely large (7 figure) block trading activity started to increase as the stock dropped below its ascending triangle.
The current Apple chart structure and ascending triangle is a repeat of 2012, as shown in the second chart. Since Apple is 14th in the Dow’s weight ranking list, a decline should not have a dramatic impact on the index. With a mid-ranking weight Dow stock, a slow but steady decline, and the media continuously saying markets will move higher, retail investors are expected to end up with a loss.

Note that this information is for educational purposes only and not a recommendation.

Stock charts courtesy of StockCharts.com.

Disclaimer

On December 28, 2024 it was noted that the last quarter of 2024 was expected to be a market peak period. This was based on the Wilshire 5000 to GDP Ratio hitting 203.69%. In addition to this the Dow continues to move higher while a silent collapse is in progress. The 2020 – 2025 list of stocks shown below have had significant declines from their highs as early as 2020. This is very similar to what occurred when the Dow moved sideways as stocks started a silent collapse between 2000 and 2001. By 2004 fourteen stocks in the Dow 30 had experienced a significant decline. This process started again in 2020 and will continue through 2025. Note that the 2020 – 2025 chart structure will not be similar to that of 2000 – 2004, but Market Maker techniques for a silent collapse will be.

“Like the musicians in an orchestra, the specialists (Market Makers) 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

The Silent Collapse Lists

2020 – 2025

BA – 2020 – 2025
DIS – 2021 – 2025
MMM – 2021 – 2025
INTC – 2021 – 2025
NKE – 2021 – 2025
VZ – 2021 – 2025

2000 – 2004

AAPL – 2000
AMZN – 2000
AXP – 2000 -2001
BA – 2001- 2003
CSCO – 2000 – 2001
DIS – 2000 – 2002
HD – 2000 – 2003
HON – 1999 – 2002
INTC – 2000 – 2002
JPM – 2000 – 2002
MCD – 2000 – 2003
MRK – 2001 – 2004
MSFT – 2000
PG – 2000

Note that this information is for educational purposes only and not a recommendation.

Stock charts courtesy of StockCharts.com.

Disclaimer

 

Up to December 11, 2024 investment managers were moving in a direction of being fully invested. Since that time the S&P500 moved down from 6084.19 to 5881.63 on December 31, 2024. The NAAIM index has moved back to a trend line where investment managers are expected to position for a brief rally followed by a decline. A move below the lower trend line would indicate  another move upward is expected. Next week should provide additional insight into the direction stock markets.

Note that this information is for educational purposes only and not a recommendation.

Disclaimer

The Long View: How to Spot a Market Bubble

Jeremy Grantham discusses tips for investors and how the rise of AI compares with previous market bubble bursts.

Note that this information is for educational purposes only and not a recommendation.

Disclaimer

On December 26, 2024 it was noted that the December 2024 decline and rally was similar to what occurred in December 1972. A long term decline would be expected to start after the January 20, 2025 Presidential Inauguration. A very short term rally was conducted during the last half of December, but it is similar to what occurred in December 2022.  It appears Market Makers have plans for a brief rally with markets eventually moving lower in 2025.

Key points for December 2024:

1. On December 19, 2024, the CNN Fear & Greed indicator briefly hit an extreme fear reading of 24 at the close. As of December 30, 2024 it has not dropped below an extreme reading of 20. This occurred in September 2022, March 2023, October 2023, and August 2024.
2. During the last half of December 2022 extremely large block trading was relatively light in the Dow stocks. This has also been the case during the last half of December 2024.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

On December 9, 2024 it was noted that the last quarter of 2024 was expected to be a market peak period. Volatility was also expected to increase before markets decline. Previous market peaks with +2 standard deviations in the 4^th quarter include 1965, 1968, 1999, and 2021. As of December 26, 2024 the Wilshire 5000 to GDP Ratio was 203.69%. A decline is still expected in 2025.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

Over the last several years Market Makers have been working on a parabolic structure for IBM. On April 27, 2024 it was noted that this structure was developed based on a similar version Specialists built between 1986 and 1987. Structural calculations for the 2017 to 2024 IBM chart are similar to that of 1986 to 1987.  It appears Market Makers are planning on a decline. Whether it is a 1987 version, or something less dramatic, remains to be seen.

“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

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

 

Investment managers are moving in the direction of being fully invested as the Semiconductor Index continues to move higher. On November 27, 2024 the NAAIM Index hit 98.93, and two weeks later it hit 99.24. This occurred during a period of time while the Semiconductor Index was moving higher, and the S&P500 continued to decline. A similar situation occurred in 2018 when the NAAIM Index numbers hit 90.19 on September 12, 2018 and 90.73 on September 26, 2018. The Semiconductor Index peaked on September 20, 2018, and the S&P500 peaked on September 21, 2018. This was followed by a 19% decline in the S&P500.

Note that this information is for educational purposes only and not a recommendation.

Semiconductor Index charts courtesy of StockCharts.com.

Disclaimer

Another pandemic collapse is planned to start in January 2025.  If successful this will be a repeat of the 2020 market collapse on a much larger scale.

Chart courtesy of StockCharts.com.

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On November 28, 2024 it was noted that as of November 9, 2024 the Buffett Indicator (Market Valuation to GDP) was 209%. As of December 5, 2024 the Longtermtrends.net Buffet Indicator new high hit 209.25%. This is well above the last peak in November 2021 with a value of 197% . Both peaks are above the +2.2 standard deviation range. With respect to positioning of markets, the last quarter of 2024 is still expected to be a market peak period. During this time frame volatility is still expected to increase before markets decline.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

As of December 4, 2024, the angle of points 1, 2, and 3 on the following NAAIM Exposure Index structure is similar to points 4, 5, and 6.  In 2023 and 2024 extremely large block trades crossed the tape around the dates noted below. The S&P500 and NASDAQ 100 continue to move higher. A repeat of 2023 is expected as the Dow completes an ascending triangle.

Note that this information is for educational purposes only and not a recommendation.

Stock chart courtesy of StockCharts.com.

Disclaimer

Between June and November, 2024 several large NVDA block trades crossed the tape above 119, as shown in the first chart. It appears Market Makers are conducting a merchandising operation by distributing stock to intuitions, pension funds, etc. Prior to Market Makers, Specialist performed the same operation.

“The cultural response of most investors is based on the assumption that “if somebody is buying, somebody is selling; not for a moment is it recognized that, in most cases “if somebody is buying,” it’s the specialist who is selling; and if “somebody is selling,” it’s the specialist who is buying.
Richard Ney, Wall Street Gang, 1974, page 150

Based on trades within the NVDA ascending triangle, a move upward would be expected going into December 2024. The following Fibonacci charts show today’s NVDA structure is very similar to that of CSCO in 2000. It should also be noted that overall, a market peak is expected in December based on the recent Buffett Indicator Review on November 28, 2024.

This information is for educational purposes only and it is not advice or a recommendation.
Scanning for block trades should be available on most major trading platforms.

Charts courtesy of StockCharts.com.

Disclaimer

As of November 27, 2024 point 3 on the following NAAIM Exposure Index evaluation is in a position similar to where it was on November 22, 2023. This is based on the number of big block trades within an ascending triangle between September and November 2024. A similar big block trade pattern occurred within a falling wedge between September and November 2023. Apple is shown below to illustrate this. Investor optimism is moving higher, but it has not moved into the extreme greed range. It appears there is still room to move upward going into December 2024.

Note that this information is for educational purposes only and not a recommendation.

Stock chart courtesy of StockCharts.com.

Disclaimer

On October 20, 2024 it was noted that as of August 31, 2024 the Market Valuation to GDP was 209%. As of November 9, 2024, the Buffett indicator valuation metric stands at 209%. This is above the November 2021 value of 197%. It is significantly higher than the September 5, 1929 value of 130%. For additional information on this topic, John P. Hussman, Ph.D. provides an in depth perspective in his November 2024 market blog.

With respect to positioning of markets, the last quarter of 2024 is still expected to be a market peak period. This is based on the Buffett indicator valuation being in a +2.2 standard deviation range. During this time frame volatility is expected to increase as markets typically move higher in December before they decline.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

As of November 21, 2024 the ICE BofA US High Yield Index Option Adjusted Spread Index was 2.61. This is very close to where it was on January 24, 2007 when the index hit 2.630. Using this index reading for some insight to a path forward, a comparison was made between 2007 and 2024. This comparison provides similarities shown in the following S&P500 charts. The 2022 to 2024 chart structure is a smaller replica of what was developed between 2001 and 2007. Based on the ICE BofA Index readings and 2007 S&P500 chart, a brief upcoming decline should be expected before a market rally begins. After the short sharp decline on February 27, 2007, tech stocks started to rally until the end of 2007. It appears there is still room for markets to move higher.

Note that this information is for educational purposes only and not a recommendation.

Charts courtesy of StockCharts.com.

Disclaimer

As of November 20, 2024 point 3 on the NAAIM index shown below was 98 days from the low on August 14, 2024. This is similar to what occurred between points 4 and 1 hitting September 28, 2022 and January 11, 2023. This duration provided a total of 105 days. There is still room to move upward going into December 2024.

Disclaimer

 

It appears Market Makers are in the process of accumulating big tech using various chart patterns. On November 16, 2024 it was noted that two extremely large Apple block trades crossed the tape in October and November 2024. Microsoft had two extremely large blocks cross the tape on August 30, 2024 and November 18, 2024 using a symmetrical triangle. NVIDIA also had two extremely large blocks crossing the tape on September 27, 2024 and November 18, 2024 using an ascending triangle. These trading patterns are consistent with an expected rise in the markets.

Note that this information is for educational purposes only and not a recommendation.

Dow charts courtesy of StockCharts.com.

Disclaimer

On November 11, 2024 it was noted that “behind the scenes Market Makers have been trading very large blocks within key points of typical chart patterns.” Two extremely large Apple block trades crossed the tape recently on October 30, 2024 and November 15, 2024. This occurred near the end of an ascending triangle. It is also similar to what occurred on April 11, 2024 and April 19, 2024 within a falling wedge.

Note that this information is for educational purposes only and not a recommendation.

Chart courtesy of StockCharts.com.

Disclaimer

As of November 13, 2024 points 1, 2, and 3 indicate markets are expected to move higher. The NAAIM Index  aligns with expectations of a year-end rally, as noted on November 13, 2024.

Disclaimer

Behind the scenes Market Makers have been trading very large blocks within key points of typical chart patterns. One series of large Apple block trades appeared between March and May of 2024 at the bottom of a falling wedge. Another series of trades appeared recently in an ascending triangle between late September and November 2024. Based on their trading patterns in large cap stocks, such as Apple, markets are on track for a move upward going into the end of 2024.
Note that scanning for block trades should be available on most trading platforms.

“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.

Dow charts courtesy of StockCharts.com.

Disclaimer

As of November 6, 2024 NAAIM Index point 3 on the following chart aligns with October 19, 2022 and October 18, 2023. This supports the expectation of a year-end rally, as noted on November 6, 2024.

Disclaimer

On October 27, 2024 it was noted that a quick move to the upside should occur in November and December 2024. This year-end rally would complete the 4^th quarter peak discussed on October 20, 2024 before moving lower.

Note that this information is for educational purposes only and not a recommendation.

Chart courtesy of StockCharts.com.

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