On September 26, 2023 it was noted that the S&P500 was expected to move down to the lower trend line of its accumulation channel shown below. Between September 21 and September 29, 2023 extremely large block trades were observed crossing the tape. Today the S&P500 pierced its lower trend line while the Fear & Greed Index dropped below 20 during the first half of the trading day. Market Makers should continue accumulating additional inventory as markets readjust for another move upward.

Stock chart courtesy of StockCharts.com.

Disclaimer

In 2022 the Fear and Greed Index dropped below 20 between September 28, 2022 and October 11, 2022. In 2023 it dropped below 20 on March 15, 2023. During each time period, extremely large block trades were observed crossing the tape. As of 5:30 AM ET today the Fear & Greed Index was 34 and it is expected to decline while the S&P500 moves down to the lower trend line of its accumulation channel shown below. This will provide Market Makers with the opportunity to accumulate additional inventory using extremely large block trades, and then move prices back up to fill the August 1, 2023 – August 2, 2023 gap.

Stock chart courtesy of StockCharts.com.

Disclaimer

Between June 26, 2023 and September 21, 2023 market makers created a descending triangle structure similar to what was developed during the last half of 2007. A decline below the triangle support line is expected to occur. In this situation futures traders would then move prices upward at a later date to fill the futures gap created between August 1, 2023 and August 2, 2023.

Stock charts courtesy of StockCharts.

Disclaimer

In addition to the trade data review of 2021 and 2023, as discussed on September 8, 2023, a review of daily Engrbytrade™ S&P500 trading data was done between November 2019 and February 2020 to identify strategic trade positioning dates. Calculations between November 4, 2019 and February 12, 2020 indicated strategic trade positioning did occur during this time frame in preparation for a decline in 2020. Extreme Engrbytrade™ readings from very subtle movements in price were noted during the trading days of November 4, 2019, November 26, 2019, December 17, 2019, December 18, 2019, December 23, 2019, January 17, 2020, January 21, 2020 and February 12, 2020.

Based on strategic trade positioning data reviewed in 2019, 2020, 2021, and 2023, a there is a high probability of a 25% to 30% decline occurring in 2024.

Stock chart courtesy of StockCharts.com.

Disclaimer

A review of daily Engrbytrade™ S&P500 trading calculations between May 27, 2021 and September 1, 2021 indicated strategic trade positioning occurred during this time frame in preparation for a decline in 2022. This is based on extreme Engrbytrade™ readings from very subtle movements in price during the trading days of May 27, 2021, June 25, 2021, August 4, 2021, August 13, 2021, August 24, 2021, and August 31, 2021.

Similar strategic trade positioning activity appeared between May 9, 2023 and July 31, 2023 where extreme readings were noted on May 9, 2023, May 31, 2023, June 23, 2023, July 19, 2023, July 21, 2023, and July 31, 2023. Based on May – July 2023 readings, the remainder of 2023 is expected to remain volatile followed by a decline in 2024.

Stock chart courtesy of com.

Disclaimer

On May 30, 2023, weekly Engrbytrade™ calculations indicated E-Mini S&P 500 futures trader positions were in an extreme position similar to where they were on September 11, 2007. This has been monitored closely over the last month to see if a structure developed that is similar to what appeared during the last quarter of 2007. The charts below provide a comparison between 2023 and 2007. Additional data will be needed to see if Market Makers and futures traders follow through with another 2007 structure.

Stock chart courtesy of StockCharts.com.

Disclaimer

Between August 18, 2023 and August 21, 2023 extremely large block trades were observed crossing the tape for a select group of mega cap stocks in the S&P500. Typically, this action by itself would not be considered for comment, but it was very similar to what occurred between March 15, 2023 and March 16, 2023. Positioning of these trades indicates Market Makers are still expecting to move prices higher.

Stock charts courtesy of StockCharts.com.

Disclaimer

A detailed review of the January 4, 2022 to October 13, 2022 and January 11, 1973 to August 22, 1973 charts (shown below) revealed chart structural movements of both time frames were similar. It appeared that Market Makers were repeating the basic chart structure of 1973 in 2022 on a larger scale. There was some variation between the October 13, 2022 to June 30, 2023 time frame and the August 22, 1973 to October 29, 1973 time frame, but both ended with two peak trading days before the end of October 1973 and June 2023. Based on the current Fibonacci structure, a market optimism reading of 80/100 on the CNN Fear & Greed index, and accumulation of US Dollars, a decline following the 1973 chart structure would be expected during the last half of 2023.

Stock charts courtesy of StockCharts.com.

Disclaimer

The S&P500 charts shown below illustrate a pattern within a Fibonacci range where a downturn would be expected. On June 30, 2023 the S&P500 hit a high of 4818.62 with a Fibonacci reading of 354%. This is consistent with the S&P500 hitting a reading of 354% within its trading day on January 4, 2022 before making a 9% decline in January 2022.

Stock charts courtesy of StockCharts.com.

Disclaimer

Here is a quick comparison of rising wedge angles in 2023 and 2008. Algorithms appear to be repeating the process from 2008.

Stock charts courtesy of StockCharts.com.

Disclaimer

It appears the 2022 – 2023 S&P500 chart shown below is using algorithms that are repeating characteristics from 1973 with a retracement that is similar to what occurred going into October 1973. Optimism appears in the media today as the markets move higher. On October 14, 1973 it was also noted in the New York Times that the market wanted to keep moving higher – until it didn’t in November 1973.

Stock charts courtesy of StockCharts.com.

Disclaimer

On May 15, 2023 it was observed that a descending triangle was forming in the S&P500 1-hour chart. Since that time a broadening top formation has developed in the 1-hour chart. This formation is similar to what occurred between December 2021 and January 2022 prior to a sharp decline, as shown below.

Stock charts courtesy of StockCharts.com.

Disclaimer

On May 5, 2023 calculations indicated a decline to 3,887 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 S&P500 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 3,872 (+/-1%) is expected during options expiration week going into May 19, 2023 (+/- 1 trading day).

Stock charts courtesy of StockCharts.com.

Disclaimer

Daily Engrbytrade™ Dow and S&P500 calculations continue to indicate Market Makers are still in the process of distributing large quantities of stock during the latest 2023 time frame shown below. This process is described in Richard Ney’s books when NYSE Specialists managed the order flow. During the last quarter of 2021 Market Makers conducted a similar distribution process before moving markets lower.

Stock chart courtesy of StockCharts.com.

Disclaimer