Scott, from The Real Economy shows examples of retail business failures in Florida. This trend will continue all over the U.S.
Crude Oil: Deflationary Decline
Based on Dow futures spread data noted on December 18, 2022, and current December 2022 intermarket Crude Oil futures trading data aligning with data from December 2019, a deflationary decline is expected during the first quarter of 2023. This decline should be similar to what occurred during the last quarter of 2008.
Stock chart courtesy of StockCharts.com.
Economy: Earnings Recession
Strategist Mike Wilson: Earnings Recession May Rival ’08
Dow: December 14 Futures Gap
Note that on December 14, 2022 at 2:00 p.m., algorithms responded to the Federal Reserve raising its benchmark interest rate by 50 basis points and a gap was created in the 1-hour Dow futures index. A move back up to 34, 604 is expected to fill this gap before moving lower.
Dow: Futures Spread
Weekly futures trading data calculations indicate traders have added a significant number of spread positions with the expectation of a sharp decline. This positioning is similar to what occurred between February 11, 2020 and February 17, 2020. Daily engrbytrade™ Dow calculations still indicate a decline is expected.
Stock chart courtesy of StockCharts.com.
Economy: US Commercial & Industrial Loans
Economy: Recessionary Indicators
A recession is on the way.
Gold: December – January Decline
Daily engrbytrade™ Gold calculations indicate a pullback is expected in December 2022 and January 2023. This should be similar to what occurred in August – September 2022.
Stock chart courtesy of StockCharts.com.
Disclaimer
S&P 500: December Decline
Daily engrbytrade™ S&P 500 futures calculations indicate a decline similar to what occurred after September 12, 2022 is expected to start this week.
Stock chart courtesy of StockCharts.com.
Disclaimer
Dow: November 2021
Dow Jones Index futures algorithms developed a chart structure between December 1, 2022 at 7:00 a.m. EST and December 12, 2022 at 3:00 p.m. EST, which is similar to the structure that was developed over a shorter time frame between November 8, 2021 at 9:00 a.m. EST and November 10, 2021 at 9:00 a.m. EST. The decline is expected to continue.
Economy: Inflation vs M2
Since 1943, it appears the M2 money supply has been a leading indicator for inflation. When the M2 yearly growth rate moved above 13%, there was a three to four year delay before inflation moved up within 1.1% of, or above, the M2 growth rate.
M2 Monty Supply Growth vs. Inflation Chart
Source: Longtermtrends
| M2 yearly growth rate | Subsequent Inflation rate | |
| 1 | December 31, 1943 – 17.46% | February 28, 1947 – 19.67% |
| 2 | June 30, 1971 – 13.44% | November 30, 1974 – 12.34% |
| 3 | January 31, 1976 -13.81% | February 28, 1980 – 14.76% |
| 4 | January 31, 2021 – 26.89% | 25+% as early as 2024? |
Crude Oil: Continue Moving Higher
Intermarket futures trading data calculations confirm crude oil is in a structural position similar to where it was on October 23, 2001, September 9, 2003, November 1, 2005 and December 2, 2008. Crude oil is still expected to continue moving higher over the long term, as noted on November 20, 2022.
Dow: January 2023 Low
Preliminary calculations indicate the rate of rise and travel from a low of 28,660.94 on October 13, 2022 to a high of 34,595.51 on December 1, 2022 indicates the Dow is expected to approach a low of 26,943 by January 24, 2023. On a longer timeline, preliminary estimates indicate the rate of rise from a March 23, 2020 low of 18,213.65 to a high of 36,952.65 on January 5, 2022 indicates the Dow is expected to drop below 16,000 by September 15, 2023.
SP500: 3000 – 3300
- A lot of two-way risk in the market right now, warns Morgan Stanley’s Mike Wilson
Dow: 26,943
Engrbytrade structural calculations indicate a decline is expected with the NYSE Dow index dropping to 26,943 (+/-1%) and hitting its lower trend line shown in the chart below. This move will also fill the NYSE Dow Index gap created on November 9, 2020 and the Dow Futures Index gap created on November 8, 2020. Additional data will be needed for a projected timeline.
Stock chart courtesy of StockCharts.com.
Dow: Final Gap Filled
On November 30, 2022, the Dow futures index filled a gap between 34,352 and 34,317 that was created on November 27, 2022 at 6:00 p.m. EST. The NYSE Dow index is shown below to illustrate this gap. It appears to be the last significant gap above 34,352 that will need to be filled this year prior to moving lower. The Dow futures index also moved within 1% of 34,964 (+/- 1%), as projected on November 15, 2022. Daily engrbytrade™ Dow calculations continue to indicate a decline is expected.
Stock chart courtesy of StockCharts.com.
Dow: Futures Fibonacci Measurements
Engrbytrade™ calculations indicate the Dow futures structure developed between October 2, 2022 and November 25, 2022 used similar Fibonacci measurements as the Dow futures structure developed between October 1, 2021 and November 8, 2021. Based on recent movements in the VIX, it should also be noted that the Dow futures structure developed between Jan 31, 2019 and February 12, 2020 used Fibonacci measurements similar to the 2021 and 2022 time frames noted above. This is why a significant decline is expected.
Note that measurements discussed here work in the Dow futures charts, not daily NYSE charts.
VIX: Final Gap Up
The VIX has been following a pattern similar to what occurred between 2007 and 2008 as shown in the VIX 2023 Outlook. On November 23, 2022 the VIX filled its August 22, 2022 gap. This is similar to what occurred between January 27, 2022 and February 12, 2020 as shown in the 2020 chart below. The VIX is currently in the process of repeating the final gap up that is similar to what occurred on February 18, 2020. This would mean that the Dow / SP500 would be expected to start a significant decline this week.
Stock charts courtesy of StockCharts.com.
August – November 2022
January – February 2020
Dow: Within 1.7 Percent
Today the NYSE Dow index closed within 1.7 percent of the projected futures close noted on November 15, 2022. Risk is on the rise as week ending optimism on Nov 25 at 3:37 PM EST in the Fear & Greed Index = 64/100.
VIX: Filling The Gap
Crude Oil: 12 Point Structure
Since April 2020 Crude Oil has developed a 12 point structure (shown below) that is similar to what was developed between January 2007 and February 2008 due to the $2 Trillion Cares Act that was signed on March 27, 2020. Two years and 3 months after the Cares Act was signed inflation pushed the Consumer Price Index 12-month percentage change up to 9.1% in June 2022. Crude Oil is expected to continue moving higher as it did in 2008 due the next wave of inflation in 2023 caused by the $1.9 Trillion American Rescue Plan that was signed on March 11, 2021.
Stock charts courtesy of StockCharts.com.
$WTIC 2020 – 2022
WTIC 2007 – 2008
Bitcoin: Model Representation
A Bitcoin vs Euro model representation is available on the Bitcoin model page.
Dow: Copper Leading Indicator
Weekly intermarket futures trading data calculations provided a signal on November 15, 2022 indicating a sharp decline is expected for Copper, just as it did on December 17, 2019 prior to the January – March 2020 decline. This signal is also a leading indicator for a sharp decline in the Dow and aligns with Daily engrbytrade™ calculations noted on November 15, 2022.
Stock charts courtesy of StockCharts.com.
Dow: One Hour Futures Chart
Structural calculations indicate the Dow is in the process of developing a one hour futures chart structure that is similar to what was developed between October 27, 2021 and November 8, 2021. Based on its rate of development the Dow futures chart is expected to reach 34,964 (+/- 1%) by Monday, November 28, 2022 (+/- 1 trading day) before moving lower.
VIX: Decline Confirmation
Daily engrbytrade™ calculations from November 14, 2022 confirm the VIX is expected to move down to the lower trend line as discussed on November 11, 2022. This move should be similar to the VIX decline between October 13, 2021 and November 4, 2021. The Dow and S&P500 will continue to move higher as Market Makers distribute inventory.