Engrbytrade Posts

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Dow/S&P500: New 52-Week Highs

Something that should not be overlooked is the NYSE New 52-Week Highs chart. It appears that Market Makers are in the process of selling as Retail Investors continue to buy. Over the last two years this has been a consistent contrarian indicator.

“….it is not demand that causes rising stock prices but rising stock prices that cause demand.”
Richard Ney, Making it in the Market, 1975, page 88

 

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: NAAIM Index Update

On September 2, 2024 it was noted that the  NAAIM Weekly Exposure Index revealed a repetitive pattern along a 17.33 degree trend line. The index hit a key point on September 18, 2024, as shown below. If the NAAIM index moves above the red trend line, then stock markets would be expected to trend higher.

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

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Dow: Long Tail Candle

After the Fed interest rate announcement on September 18, 2024 at 2:00 p.m. ET, the Dow moved to a high of 41,981.97. A review of block trades during this time revealed a majority of trades were conducted by retail traders and computer algorithms. The end result was a long tail candle for the day, which typically signals a reversal.

It should also be noted that the Dow continues to follow its 16.83 degree upper trend line, as shown below. A decline going into October 2024 is still expected.

 

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

Charts courtesy of StockCharts.com.

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Gold: To Go Parabolic

On July 10, 2024 it was noted that the current gold pattern was similar to that of the late 1970s. After four years of economic stimulus packages gold will move higher. The reason for this rise was explained in the Silver Ascending Triangle article posted on December 24, 2022. This move upward is expected to go parabolic, as it did in 1979.

 

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

Charts courtesy of StockCharts.com.

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2020 – 2024

1975 – 1979

 

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Dow/S&P500/NASDAQ: NAAIM Index Pattern Continues

On September 2, 2024 it was noted that the NAAIM Weekly Exposure Index revealed a repetitive pattern. If the NAAIM Index pattern continues as it did in 2022 and 2023, another rally would be expected going into the end of 2024.

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

Chart courtesy of StockCharts.com.

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Economy: August 2007 Press Conference

On August 9, 2007 George Bush gave a press conference on the economy. He provided the following key points that sound similar to recent economic related comments from the White House.

“Fundamentals of our economy are strong..”
“..job creation is strong..”
“..real after tax wages are on the rise..”
“..inflation is low..”
“..the global economy is strong..”
“..there is enough liquidity in the system..”

Clip from Bush’s Press Conference on 8-9-07

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Dow/S&P500/NASDAQ: Significant Decline Update

On July 20, 2024 Engrbytrade™ intermarket futures trading data calculations identified a series of key Commercial Trader British Pound positions in 2023 and 2024. This indicated the Dow, S&P500, and NASDAQ would repeat their performance of 2008. Currently the British Pound is repeating a peak that was formed in late October and early November 2007. Based on this data, stock markets are expected to have a significant 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: Fibonacci Expectations

On September 13, 2024 it was noted that the S&P500 candlestick on September 11, 2024 was similar to the January 24, 2022 candlestick. A review of the following 1-hour charts provided additional Fibonacci expectations that 2024 would be very similar to 2022. The Dow is currently expected to move up to the 1.68 level before moving lower.

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

Charts courtesy of StockCharts.com.

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S&P500: Candlestick Characteristics

Engrbytrade™ Daily Trade Pattern Structure Calculations show the candlestick on September 11, 2024 has similar candlestick characteristics as the one on January 24, 2022. A brief move to the upside is expected for computers and Market Makers to distribute their inventory to retail investors.

 

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

Charts courtesy of StockCharts.com.

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S&P500: Utilities Industry Group

Between July 31st and August 1st 2024 the S&P500 Utilities Sector Bullish Percent Index moved up to 96.67. There was a brief decline during the beginning of August. Then it moved up to 96.67 again between August 14, 2024 and September 3, 2024.

Previously, the Utilities Sector Bullish Index moved up to 96.55 during August and September 2022. This was followed by a sharp decline in the Utilities Industry Group Index

The current bullish reading of 96.67 indicates the Utilities Industry Group Index is overvalued.

 

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

Charts courtesy of StockCharts.com.

Disclaimer

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Dow/S&P500: The Markets Are Rigged

Yes, The Markets Are Rigged

In 2008 the NYSE transitioned from Specialists to Designated Market Makers and Supplemental Liquidity Providers. It is still a merchandising operation.

Approved NYSE Supplemental Liquidity Providing (SLP-PROP) Firms
HRT Financial LLC
IMC Chicago LLC
Latour Trading, LLC
Tradebot Systems, Inc.
Virtu Americas LLC

Approved NYSE Designated Market Makers
Citadel Securities LLC
Goldman, Sachs & Company
Virtu Americas LLC

 

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Dow/S&P500: Hindenburg Omen Index

Research into the weekly Hindenburg Omen Index revealed comparable points to the weekly 10-Yr Note Non-Commercial Futures Trader Net chart. In 2018 the weekly omen index hit 3.0 on September 4th, 10th, and 17th. On September 25, 2018 Non-Commercial Futures trader positions hit a low in the 10-Yr Note, as shown on the chart below. On October 4, 2018 the Dow and S&P500 started a decline that continued to the end of December 2018.

In comparison to 2018, the index recently hit 3.00 on September 3rd and 9th. At this point 10-Yr Note Futures traders are aligned closely with the weekly Hindenburg Omen Index. If the index hits 3.0 again, there is a high probability of a decline going into the end of 2024.

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

Index chart courtesy of StockCharts.com.

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Dow/S&P500: Gap Open for 32 Days

On September 5, 2024 it was noted that futures gaps were still left to fill for the Dow and S&P500. Each index still has a one gap that has been open for 32 days, which is quite unusual.  Investing.com can provide charts for Dow and S&P500 futures, if you are interested. Use a 5-minute chart with candlesticks to view the gaps.

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

Charts courtesy of StockCharts.com.

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S&P500: Patterns Emerge

On September 3, 2024 a net reportable positions of S&P500 clearing members, futures commission merchants, and foreign brokers chart was developed. A review of relatively small variances provided a high correlation of key turning points where patterns emerge. Based on this data five out of six dates above the red line were starting points for an ascending broadening wedge. The most recent move was an ascending broadening wedge formed between December 5, 2023 and September 3, 2024. This is similar to what occurred between June 1, 2021 and February 11, 2022.

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

Stock charts courtesy of StockCharts.com.

https://stockcharts.com/

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Interest Rates: Bonds Hedged to the Short Side

On August 17, 2024 it was noted that mid-August 2007 and 2024 10-Yr Note interest rate structure positioning was in alignment, along with the Dow and S&P500. This would mean the value of the 10-Yr Note would rise as interest rates decline. At that time the 10-Yr Note Non-Commercial Trader chart was certainly what would be considered a “crowded trade”.

On September 3, 2024 the 10-Yr Note interest rate was still positioned for a decline. Non-Commercial Trader Net positions for the underlying 10-Yr Note were hedged to the short side. This means they are positioned for interest rates to rise.

The 30-Yr bond total reportable positions of clearing members, futures commission merchants, and foreign brokers are shown below. Their positions are also hedged to the short side and positioned for rates to rise.

 

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

Interest rate and bond chart courtesy of StockCharts.com.

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Economy: Professor Steve Hanke

Professor Steve Hanke Discusses the Economy

Professor Steve Hanke discusses the most misunderstood economic events affecting global markets.

0:00 Introduction
0:35 Economic Events
6:07 Impact of Money Supply on Economy
10:08 Rising Rates and Their Impact
12:23 Gold Market Outlook
14:05 Two Big Wars and Their Economic Impact
18:48 Market Overvaluation
21:18 Investment Strategy Advice
23:12 Book Preview: Capital, Interest, and Waiting
27:27 The Concept of Waiting in Economics
39:45 Conclusion

M2 and Components

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

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Dow/S&P500: August to October 2023 Patterns

The latest NAAIM update indicates the Dow 8 point chart shown below is complete.  At this point the Dow and S&P500 are expected to follow their August to October 2023 patterns. This move would also line up with computer algorithms working to fill remaining futures gaps created in August 2024.

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: Unfinished Business

It appears that computer algorithms are working on some unfinished business related to filling futures gaps. On August 27, 2024 it was noted that there were still two open futures gaps to fill. The S&P500 is very close to filling its first futures gap created on August 15, 2024. It has been open for 21 days.

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

Charts courtesy of StockCharts.com.

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Dow: Inverted Fibonacci Technique

A review of the Dow 1-hr chart was performed between August 21, 2024 and September 3, 2024. Results indicate Market Makers were using an inverted Fibonacci technique shown in the first chart. This provides a method of inventory accumulation for the Market Maker when needed. It also provides algorithms with data needed to move the Dow up to its 16.83 degree upper trend line.

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: February 2019 Structure

On August 17, 2024 it was noted that mid-August 2007 and 2024 10-Yr Note rate structure positions were in alignment, along with the Dow and S&P500. In addition to this the current 10-Yr Note rate position is in alignment with the February 2019 structure. Rates are expected to continue moving lower.

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

Interest Rate charts courtesy of StockCharts.com.

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Dow/S&P500: NAAIM Weekly Exposure Index

A review of the August 30, 2024 NAAIM Weekly Exposure Index revealed a repetitive pattern along a 17.33 degree trend line. The Dow continues to move higher and is expected to briefly touch its 16.83 degree upper trend line. This will complete the 2021 chart structure guide discussed on August 22, 2024.

Market Maker big block distributions after August 5, 2024 have been relatively light and are focused on a few big tech stocks and ETFs such as the SPY. This indicates Market Makers are planning to accumulate additional inventory during the next decline.

Overall, there are very few sector bullish percentage indices that are overvalued. Examples include the S&P Health Care Sector and S&P Real Estate Sector.

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

Charts courtesy of StockCharts.com.

Disclaimer 

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Dow: Test the 1929 Model

It appears that September 2024 will provide an opportunity to test the 1929 model. On September 3, 1929 the Dow hit its peak. The rest was history. Today the Dow is in a very similar position as it nears the 461.80% level shown below. Any number of events could precipitate a decline. Central bankers and Market Makers will be the determining factor.

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: 1987 Trend Line Update

On August 24, 2024 it was noted that contact with the IBM 1987 upper trend line was expected in late August or early September. On August 28, 2024 IBM hit its 1987 37.18 degree trend line shown below. IBM is expected to continue following its 1987 chart structure.  When IBM hit its peak on August 21, 1987 it started a decline that ended on October 19, 1987. If a large number of stocks collapse in October, markets will close just as they did in 1987 and brokers will not respond.

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

Chart courtesy of StockCharts.com.

Disclaimer

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Dow/S&P500: August Futures Gaps to Fill

Market Makers continue to proceed to the 16.83 degree upper trend line discussed on August 26, 2024, At this point there are still two open futures gaps.  On August 8, 2024 and August 15, 2024 gaps were created in the Dow and S&P500 futures 5- minute charts. The majority of gaps created in these futures have a high probability of filling within a 5 day window. A sampling of 22 gaps in the Dow futures 5-minute chart between January 17, 2024 and August 4, 2024 were identified. Out of this sample 15 filled in less than 5 days. Five filled between 5 and 15 days, and 2 filled after 15 days. The Dow gaps noted above have been open 19 days and 12 days, respectively. Based on historical data, this indicates both gaps should fill before the September options expiration date.

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

Charts courtesy of StockCharts.com.

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