Engrbytrade Posts

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Dow/S&P500/NASDAQ: NAAIM Index – Big Block Trades

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.

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Dow/S&P500/NASDAQ: November Buffett Indicator Review

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.

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Interest Rates: Trader Net Positions

On September 28, 2024 it was noted that there is a 70% chance of a sharp decline in the 10-Yr Note rate by year end. This was based on the 2024 descending triangle that is similar to what occurred in 1982 and 2000. 10-Yr Non-Commercial Trader Net positions continue to remain in an extreme position. The expectation of rates starting a decline before the end of 2024 is still in place.

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

US10Yr Note chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: 2007 and 2024

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.

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US Dollar: Moving Higher

Non-Commercial trading data used for Canadian Dollar reviews has been under observation since mid-June 2024. In this case intermarket relationships would support the U.S. Dollar moving higher.

On November 4, 2024 it was noted that a decline in crude oil prices was expected. Any significant change in the U.S. Dollar was inconclusive. Prior to this, a review of the Euro was performed on October 25, 2024 noting that the U.S. Dollar was expected to move lower. The Canadian Dollar was still under review at this point.

On October 15, 2024 it was noted that a decline in gold was expected in 2025. In support of this it was noted on October 12, 2024 that a detailed review of Non-Commercial Gold Futures Trader positions revealed gold is currently in the process of completing a 2016 to 2024 three peak Non Commercial futures trading sequence. This would result in the U.S. Dollar moving higher.

As of November 19, 2024 Euro non-commercial and commercial futures trading data does not indicate the euro is expected to move higher. Overall, intermarket futures trading data currently indicates the U.S. Dollar is expected to move higher.

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Crude Oil: Commercial Trader Positions

On November 4, 2024 it was noted that a descending triangle was developing that is similar to what occurred between 2017 and 2019. In addition to this a similar setup occurred between 2013 and 2014.

NY Harbor ULSD No. 2 Diesel provides a predictive structure using commercial trader positions. Prior to the 2014 and 2020 declines, peak commercial trader positions were identified in the following Commitment of Traders data chart. This same setup is currently under development within a 2022 – 2024 descending triangle. A decline would be expected to occur going into 2025.

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

WTIC charts courtesy of StockCharts.com.

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S&P500: Change in Direction

On November 16, 2024 it was noted that a declining angle for the S&P500 was 63.07 degrees. This is similar to what occurred during September 2024. Based on the September 2024 decline, a change in direction above the current channel trend line could come as early as Friday, November 22, 2024.

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

Dow charts courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Accumulating Big Tech

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.

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Dow/S&P500: Designated Market Maker Question

The following question was presented to GROK on X. Note that Designated Market Makers (DMMs) see your order flow and can trade for their own accounts. It is still a merchandising operation. They buy low and sell high.

Do designated market makers buy and sell for their own accounts?

Yes, Designated Market Makers (DMMs), formerly known as specialists, do indeed buy and sell securities for their own accounts, but within certain regulatory constraints:

  1. Market Making Role: Their primary role is to maintain fair and orderly markets for their assigned securities. This involves buying when there’s excess sell pressure and selling when there’s excess buy pressure, thereby ensuring liquidity.
  2. Proprietary Trading: DMMs are allowed to trade for their own accounts, which can include:
    • Hedging: They might hedge positions they hold in the market to manage risk.
    • Speculation: They might also engage in speculative trading based on their market insights or strategies, though this is more regulated than standard proprietary trading firms.
  3. Regulatory Framework:
    • DMMs operate under strict rules from the SEC and the exchanges. For instance, they must adhere to:
      • Priority Rules: They often have to give priority to public customer orders over their own when executing trades.
      • Price Improvement: They are sometimes required to improve the price when trading with themselves (buying at a higher price than the best bid or selling at a lower price than the best offer).
    • Regulations aim to prevent conflicts of interest and ensure that the market-making function is not compromised by proprietary trading activities.
  4. Information Advantage: Due to their central role in the market, DMMs have access to significant information about order flows which could theoretically give them an advantage in proprietary trading. However, this is heavily monitored to prevent unfair practices.
  5. Transparency and Fairness: Exchanges require transparency in how DMMs manage these dual roles to ensure market fairness. They must report their proprietary trades separately from their market-making activities.

So, while DMMs do engage in trading for their own accounts, this activity is closely intertwined with their obligation to facilitate trading for the public, under stringent regulatory oversight to maintain market integrity.

Examples of Approved NYSE DMM’s
Citadel LLC
GTS Securities LLC
Virtu Americas LLC

 

 

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Dow/S&P500/NASDAQ: Apple big blocks

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.

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S&P500: Point of Reference

The Fear & Greed Index value of 49 on September 5, 2024 is a point of reference using a 21.42 degree angle to November 15, 2024. On November 15, 2024, prior to the close, the index hit a value of 49.

As the S&P500 moves lower, it is expected to fill the gap created on November 6, 2024. Note that this gap does not appear in the S&P500 cash futures market.

A closer look at 15-minute charts shows the S&P500 declined with an angle of 63.07 degrees during the week of November 11, 2024. This same angle appeared between September 3, 2024 and September 6, 2024. A move down to the 21.42 degree support line would be expected before moving higher. This is consistent with the posts on November 13, 2024 and November 14, 2024.

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

Charts courtesy of StockCharts.com.

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Economy: Jim Rickards 2025 Recession

Jim Rickards: Weakness, Recession in 6-9 Months, But a Very Strong Economy in 2-4 Years

00:00 Introduction and welcome back Jim Rickards
01:18 2024 election review
05:07 Economic implications of election results
07:24 Trade policies and auto industry tariffs
09:29 The “American System” explanation
16:32 Analysis of Trump victory/Harris loss
21:45 Inflation discussion and public impact
24:24 Economic outlook: recession in the near-term vs. long-term growth
29:00 Jerome Powell and Fed leadership discussion
31:32 Labor market analysis and job revisions
36:45 “MoneyGPT” book and AI in daily life
41:56 AI’s impact on market crashes
45:23 AI, nuclear warfare, and empathy limitations
47:36 Historical nuclear war prevention examples
49:32 AI limitations in crisis management
51:01 MoneyGPT book release details and closing

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Dow: December 2024

On November 9, 2024 it was noted that the Dow revealed a pattern similar to September 2018. The following charts indicate the 4th Quarter Peak discussion on October 20, 2024 appears to be on track for completion by December 2024. A recession is still expected by 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: Apple Block Trades

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.

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Dow/Interest Rates: September 2018

On October 13, 2024 it appeared Market Makers were using algorithms to reproduce mathematical relationships used in the 2018 Dow chart structure. The market rally this week revealed a pattern that is similar to September 2018.  Based on this, the remainder of 2024 is expected to be similar to September and October 2018. Key points are identified in the following charts.

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

Dow charts courtesy of StockCharts.com.

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Interest Rates: Recession in 2025

On May 16, 2024 it was noted that there were two key indications for a repeat of the year 2000. The 10Yr-2Yr charts shown below provide structural similarities as of November 7, 2024. The latest 10Yr-2Yr yield curve inversion started on July 6, 2022. Since September 6, 2024, it has remained above zero resulting in an inversion that lasted 26 months. On September 18, 2024 the Federal Reserve started their process of cutting the Fed Funds Rate by 1/2 percent. In comparison to 2000, the Fed started cutting rates after major Dow tech stocks collapsed. This time the Fed appears to be repeating their rate cutting process from 2007, as stocks are moving higher. A market decline and a recession in 2025 is expected.

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

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Crude Oil: Market Collapse

Crude Oil is clearly in the process of developing a descending triangle similar to what occurred between 2017 and 2019. That led to a market collapse in 2020 when the pandemic hit. The current formation is not a coincidence.
A meeting was held on October 10, 2024 to discuss the development of bird flu pandemic vaccines. Participants included members from the World Health Organization, Centers for Disease Control, Food and Drug Administration, National Institutes of Health, etc. They also discussed mandatory vaccinations. One presentation explained how grocery stores can report customers who purchase food contaminated with a bacteria or virus on their rewards program card. If you did, the CDC can then tell you to quarantine for three weeks.

If this plan is not stopped, 2025 is expected to be a repeat of 2020.

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

Chart courtesy of StockCharts.com.

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Dow/S&P500/NASDAQ: Intel’s replacement with NVIDIA

On October 20, 2024 it was noted that a 4th quarter peak was expected before stock markets moved lower. To support this, Exchange Insiders setup Intel’s replacement with NVIDIA in the Dow.

History shows Intel’s inclusion in the Dow on November 1, 1999 provided Market Makers with an ability to move other stocks lower in 2000, while Intel moved higher. Declining stocks included Caterpillar, Johnson & Johnson, McDonald’s, Nike, and Proctor & Gamble. Market Makers were able to convince investors to stay in the market during 2000 as the Dow moved sideways. Overall, this process is a merchandising operation. Market Makers will need to move other stock prices lower in 2025 in order to buy additional inventory for the future.

The 40.9 degree angle shown below on NVIDIA’s chart is the same as Intel’s angle during 1999 – 2000. Do not conclude that NVIDIA will move significantly higher. Market Makers will only move NVIDIA as needed in order to lower other stock prices.

“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 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.

Charts courtesy of StockCharts.com.

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