- 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.
Dow /VIX: Filling VIX Gap
Over the last three trading days daily engrbytrade™ Dow calculations indicate Market Makers have been distributing (selling) very large blocks of stock as the Dow moves higher. This distribution process is expected to continue until the VIX gap (created on August 22, 2022) has been filled. This means the VIX will need to drop below 21.27 before moving higher. The Dow futures gap created on 8/21/22 was filled on November 10, 2022.
Stock chart courtesy of StockCharts.com.
Dow: 2022 Recurring Pattern
Watching underlying big block trades, daily calculations and technical indicators for a recurring pattern.
Stock charts courtesy of StockCharts.com.
Dow: August 17, 2022
A 15-minute Dow futures chart structure was constructed between 4:00 a.m. on October 28, 2022 through 8:00 a.m. on November 8, 2022 that has similar structural characteristics to what was built between 9:00 a.m. on August 16, 2022 and 2:45 p.m. on August 17, 2022. Daily engrbytrade™ Dow calculations indicate a decline is imminent.
VIX: August 22, 2022 Gap
A drop below 21.67 is expected to complete filling the gap created on August 22, 2022. An intraday move down to the red trend line shown in the chart below is also needed before moving significantly higher as it did during September – October 2008.
Stock chart courtesy of StockCharts.com.
Interest Rates: 10Yr Note November 2018
Weekly futures trading data calculations indicate the 10-Year US Treasury Note Yield is peaking and in a structural position similar to where it was on November 6, 2018.
Stock charts courtesy of StockCharts.com.
VIX: 2023 Outlook
One example of market structures created and implemented during the course of predetermined time frames. It appears a significant decline is coming and 2023 will not be a good year based on the following weekly charts.
Stock charts courtesy of StockCharts.com.
Silver: November 1, 2018
Weekly futures trading data calculations indicate silver traders are in a position similar to where they were on November 1, 2018. Silver is expected to trend higher over the next 12 months with a target range of $30.85 (+/- 5%).
Stock charts courtesy of StockCharts.com.
Dow/S&P500: December 8, 2022
Based on the declines in January and June 2022, preliminary futures structural calculations indicate the Dow will reach 25,913 and the S&P 500 will reach 3,253 by December 8, 2022.
Dow: Fed and Jobless Claims
The Dow 15-minute chart is currently repeating the December 30, 2021 to January 4, 2022 structure. Waiting for the Federal Reserve’s announcement and initial jobless claims report this week to initiate a decline.
Dow: 33,686
As noted on October 21, 2022 the Dow moved within a primary target range of 32,210 (+/- 1 %) on October 27, 2022. It also hit a secondary target range of 33,043 (+/-1%) with a high of 33,000 in the futures on October 28, 2022. A brief move up to 33,686 in the Dow futures 15-minute chart is expected to close the gap created on August 21, 2022. This move would be similar to the Dow 15-minute futures structure developed between December 30, 2021 and January 5, 2022 before a meaningful decline starts.
Dow: Six Day Rally
Over the last six trading days Dow futures have finished with a positive close. Similar six day positive close rallies occurred between December 21, 2021 to December 29, 2021, and May 23, 2022 to May 30, 2022. During all three rallies, it was observed that a significant number of very large blocks were traded. Preliminary estimates indicate that over the next 16 to 17 trading days the Dow will drop back down to 26,400 following the lower trend line shown above.
Stock chart courtesy of StockCharts.com.
Dow: September Gap Filled
The gap created in the Dow futures chart on September 13, 2022 at 8:30 a.m. has been filled.
Silver: 2008 vs 2022
Noting that silver is in an undervalued position, the following charts indicate the 2008 and 2022 structures are similar.
July – October 2022
October – December 2008
Stock charts courtesy of StockCharts.com.