Engrbytrade Posts

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Dow/S&P500: Repeat of October and November 2023

Today the CNN Fear & Greed Index hit a reading of 41 at the market close. The range of CNN index readings between December 19, 2024 and January 21, 2025 are similar to what occurred between October 5, 2023 and November 3, 2023. This sequence of index readings prompted a review of extremely large block trades in the Dow during each time frame. Based on the results of a Dow 30 big block review, it appears we are seeing a repeat of October and November 2023 where the markets are expected to move higher.

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

Stock chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Apple Repeat of 2012

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.

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Dow/S&P500/NASDAQ: Silent Collapse

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.

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Interest Rates: Extreme Range

The 10-Yr Note Non-Commercial Trader net position continues to remain in an extreme range away from the mean. It is in a relative position that is similar to where it was on November 20, 2018. The current trader net position is also 46% larger than it was on November 20, 2018. Dow intermarket relationship calculations with the 10-Yr Note continue to align with Market Maker distributions of extremely large blocks of stock.

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

Stock chart courtesy of StockCharts.com.

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Dow: 1973 and 2025

Regardless of trends in the economy, politics, or world events Market Makers will use tools at their disposal to create market structures to fill their needs. In the 1970’s it was the information age with the internet and personal computers. Today it is AI. The 1973 and 2025 charts shown below are strikingly similar. This is a well coordinated effort with the media to keep investors interested in the markets. There is an extremely high probability that the end result will be similar to what occurred in 1973 and 1974.

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

Stock charts courtesy of StockCharts.com.

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Interest Rates: TLT Accumulation Process

In September 2023 it appeared Market Makers started accumulating TLT. This accumulation is similar to what was accomplished between May 2010 and March 2011. The following charts show a 12.34 degree trend line supporting their accumulation process. After their accumulation was completed in 2011, the Fed sent a message announcing a plan to peg interest rates at ultra-low levels. This was meant to boost growth in the economy.

It appears they are currently planning to follow the same accumulation process using a 12.34 degree trend line. On January 6, 2025 Fed official Lisa Cook delivered a blunt message to the stock market noting that valuations are elevated.. Using this signal from the Fed, Market Makers can now work on wrapping up their accumulation effort. Over the last month extremely large blocks have continued to cross the tape. Market Makers will be finished long before the Fed announces any actions to lower interest rates.

By scrapping traditional theory it becomes possible to discover the true order of things, to show how the aspiration of investors can be linked to the aspirations of the specialist [Market Makers] as he proceeds to merchandise his stock.
Richard Ney, Wall Street Gang, 1974, page 88

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

Stock charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: British Pound Trader Positions

On July 23, 2024 a record level of Non-Commercial Futures Traders Net (Long-Short) positions was recorded for the British Pound. This is well above the previous record set on July 17, 2007. After the July 2007 futures positions peak there was a delay of approximately three and one half months before the Dow, S&P500, and NASDAQ started a decline. The 10-Yr Note yield was also in decline during this time. With a significantly larger number of futures trader positions recorded on July 23, 2024, a longer delay for a decline in the stock markets is anticipated. It has been five and one half months since the peak on July 23, 2024. The 10-Yr Note yield is currently in decline, as it was in 2007. A decline in the stock markets is still expected as capital from around the world continues to move into U.S. Dollars.

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

Stock and currency charts courtesy of StockCharts.com.

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S&P500: Engrbytrade™ Marker Sets

Preliminary analysis of the S&P500 chart shows three Engrbytrade™ marker sets indicating an end point in March 2026. This end point currently provides a price range between 1250 and 1500. The development of  this method is based on research of repeatability from previous sets found over decades. A set of markers, or identifiable low points, within the S&P500 chart structure should align to reach a future end point. This evaluation is also done on an arithmetic chart scale, not a logarithmic scale. It provides an end point within a general time frame and price range. A minimum of two marker sets are needed in order to conduct this type of analysis. One example is shown in the second S&P500 chart covering the 1966 to 1975 time frame. Markers should also align with the expectation of an upcoming market decline. This includes topics such as:

  • Fed rate cuts that are following their 2007 model, as discussed on January 3, 2025
  • Buffet indicator readings continuously running  in the +2 standard deviation range
  • Magnificent 7 stocks driving markets higher
  • Record levels of U.S. households and non-profits holding stocks

Marker locations may be added based on future events and price changes. At this point it is not clear if these chart structures are intentionally designed and executed as part of a plan. This work is focused on major indices, not stocks.

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

Charts courtesy of StockCharts.com.

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Interest Rates: Fed Rate Cuts

On January 1, 2025 it was noted that the Federal Reserve started cutting the Fed Funds Rate by 1/2 percent on September 18, 2024. It also noted that the Fed appeared to be repeating their 2007 rate cutting process. The charts shown below have similar structural characteristics and trend lines. Based on the timing of current Fed rate cuts, a major stock market decline is expected in 2025.

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

Charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: NAAIM Index – January 1, 2025

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

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Interest Rates/Dow: September 2007

On September 18, 2024 the Federal Reserve started their process of cutting the Fed Funds Rate by 1/2 percent. On November 8, 2024 it was noted that the Fed appeared to be repeating their rate cutting process from 2007. Current 3-month rates are now in a position similar to where they were on Septembers 6, 2007. Based on the current position of 3-month rates a brief stock market rally would be expected. This would be followed by a long decline in 2025.

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

Charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Key Points for December 2024

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.

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Gold/Silver: 2024 Q3 Precious Metal Contracts

On December 12, 2024, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities.  Figure 17 on PDF page 42 shows notional amounts of precious metals contracts held by Insured U.S. Commercial Banks and Savings Associations. These institutions continue to move into precious metals contracts.

Note that beginning January 1, 2022 the largest banks are required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk (SA-CCR). Under SA-CCR gold derivatives are considered precious metals derivative contracts rather than an exchange rate derivative contract, resulting in an increase in reported precious metals derivative contracts compared with prior quarters. Refer to the call report instructions and OCC Bulletin 2020-7, “Standardized Approach for Counterparty Credit Risk: Final Rule, “for additional information on the SA-CCR exposure calculation.

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Dow/S&P500/NASDAQ: Last Quarter of 2024

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 4th 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.

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Dow/S&P500: December Decline and Rally

1971 – 1973
In April 1971, the Buffett Indicator moved above its +1 standard deviation range. It continued to move along this range until January 1973 when the indicator, Dow and S&P500 started to decline. This decline accelerated after the January 20, 1973 U.S. Presidential Inauguration. Note that a quick decline and rally occurred in the Dow and S&P500 during December 1972.

2021 – 2024
In November 2021 the Buffett indicator hit its peak above the +2 standard deviation range before moving lower in 2022. During the U.S. Presidential election week of November 4, 2024 the indicator moved above its +2 standard deviation range again. Note that the December 2024 decline and rally is similar to what occurred in December 1972. A long term decline would be expected to start after the January 20, 2025 Presidential Inauguration.

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

Charts courtesy of StockCharts.com.

Disclaimer

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Dow: Close below 41,647

On June 3, 2024 the Engrbytrade™ 1974 Dow Model was updated to reflect a 7 point structure developed in 1973 – 1974.  At that time the Dow was expected to follow the 1974 peak and start a decline. In late May 2024, the Dow failed to drop below the April 2024 low and continued to move higher. This extension of the upward trend has continued until now with the Dow positioned to continue its decline. Using the current Engrbytrade™ 1974 Dow Model a close below 41,647 would indicate a continuation of the decline going into 2025.

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

Charts courtesy of StockCharts.com.

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Economy/Interest Rates: Trade Wars = Recession

U.S. and Canada Trade Wars = Recession | Steve Hanke and Jimmy Connor

Steve Hanke, Professor of Applied Economics at Johns Hopkins University discusses the recent decision by the Fed to cut rates, for the third time, the impact of a Trade War between the U.S. and Canada.

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

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Dow/S&P500/NASDAQ: IBM Parabolic Structure

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

 

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Interest Rates: TLT Structure

On December 14,, 2024 it was noted that the 30-Yr Treasury rate was expected to move lower in 2025. At the moment the Fed is in the process of repeating their 2007 rate cut pattern, as shown in the following NASDAQ chart. The second TLT chart reflects an expectation of a rate cut on December 18th. Using the 2007-2008 TLT structure as a guide, a move upward going into January 2025 would be expected. Note that a 5th rate cut occurred on December 11, 2007.

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

Charts courtesy of StockCharts.com.

Disclaimer

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Interest Rates: 30-Yr Treasury Yield Descending Triangle

On November 26, 2024 it was noted that there was a 70% chance of a sharp decline in the 10-Yr Note rate by year end. Looking at the 30-Yr Treasury rate there is an expectation that it will move lower in 2025. This is based on the following:
1. The 30-Yr Treasury descending triangle structure.
2. Futures data from net Total Reportable Positions on the 30-Yr Bond indicates they are significantly larger than what was recorded in 2019.
3. A significant increase in volume in products such as TLT.

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

Bond related charts courtesy of StockCharts.com.

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Crude Oil: Heating Oil Sharp Decline

On November 22, 2024 it was noted that Heating Oil (NY Harbor ULSD No. 2 Diesel) was expected to decline going into 2025. This is based on Commercial Trader positions, which are currently above the previous reading recorded on February 25, 2020. The descending triangle formation indicates a sharp decline is expected. Stock markets are also expected to fall.

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

$HOIL chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: NAAIM Index – December 11, 2024

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.

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