Engrbytrade Posts

In addition to repeating structures noted on December 24, 2022, the Dow 1-hour futures chart developed between November 10, 2022 at 6:00 a.m. and December 13, 2022 at 8:00 a.m. is in an ascending broadening wedge pattern similar to the NASDAQ 100 index that was developed between February 11, 2020 at 10:00 a.m. and February 19, 2020 at 7:00 p.m. Both structural chart patterns are similar to the engrbytrade rising Eight Point Trading Model^TM shown below. Since this structure is relatively rare, additional data will be needed to ensure the 2022/2023 decline continues.

Significant futures trader’s position spreading discussed on December 18, 2022 occurred five times since June 2007, as shown in the table below. Three out of four accumulation dates were followed by a decline in the market.

Since 2017, extreme peaks in the CBOE Options Equity Put/Call Ratio discussed on December 23, 2022 have had a very high correlation with market lows and were followed by a move upward.

Until the ascending broadening wedge, and futures trader’s positions can be confirmed with additional data, the assumption at this point is a move upward based on the Put/Call Ratio correlation.

Disclaimer

On December 21, the Put to Call ratio hit a record close of 2.03, as shown in the chart below. This was followed by a change in daily engrbytrade™ calculations on December 22, 2022 indicating the Dow is now in a structural position similar to where it was on July 5, 2022. The potential exists for a move up into February before turning lower.

Stock chart courtesy of StockCharts.com.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer

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.

Disclaimer