mcm-Alex

mcm daily market update 29.Jul.22

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ST trend: up

Yesterday we noted that the ST trend was up, as buyers managed to consolidate sideways after the huge up squeeze off FOMC. We also mentioned that "As long as ML is below price, bulls have the edge.". That turned out ot be true. The initial push higher off the RTH open was a bull trap, as price fell abruptly afterwards right into the all important ML test. ML held (helped by a SE triggered on TT at the exact lvl) and bulls stepped in with force and never looked back.

The o/n was again bull friendly. AMZN and AAPL earnings were very well received and pushed the market even higher going about 40 points above the RTH close (which was near the highs of the session). Then price pulled back in the same sideways move like yesterday. However this move had even more limited downside as we are hovering near the highs still. After the big up squeeze from yesterday (2nd day in a row) the same normal expectation sees price making a ML test. As long as ML holds, bulls can keep running higher. Once ML will fail that would be the indication that the main trend is shifting to downside, until then bulls are in control.

As market is gapping up, the reaction to the gap in the first 30m-1h will be important. It could be an exhaustion gap given the vertical move we saw since Wednesday or it could be a continuation gap which runs to squeeze the last remaining bears. Pay attention to the RTH open and reaction after it.

mcm-Alex

mcm daily market update 27.Jul.22

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ST trend: neutral

Yesterday bears took control since the o/n after dropping price below ML. The entire o/n session price was capped by ML and then they pushed price below macro-ML into a nice flush towards 3920 lvl, overshooting it slightly. Bulls woke up then and after an unconfirmed low on FGSI managed to push back.

The o/n session was bull friendly this time around. Bulls managed to build on the late session bounce and won back both macro-ML and ML.However, after reacting the important 3970 area, they stalled and now price is back-testing ML again. ML is the key near term, if bulls manage to defend here, then the door for more upside is opened. If ML fails, macro-ML is last defense for bulls. Below that and flood gates open again with yesterday's LOD open to be retested.

Today is FOMC, so it's quite likely the market will chop around waiting for that before choosing a path. Reaction to MSFT and GOOGL earnings seems to be positive, despite the earnings miss. So that could be a sign that markets are ready to rally no matter how bad earnings or guidances are. Fireworks expected after FOMC at 2pm. With clearer direction to be set tomorrow/Friday.

mcm-Alex

mcm daily market update 22.Jul.22

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ST trend: neutral (with potential larger topping pattern)

Yesterday we were noting that the ST trend was neutral, as buyers were inefficient via FGSI, having put in bearish EE vs the prior HOD, and price was testing ML once again. We did mention that ML was key for the trend and buyers managed to defend it initially bouncing to near the o/n high, but head-faked the breakout and droped below ML. That was a head-fake too, as it was then very quickly recovered and buyers pushed to new highs closing at the highs too.

The o/n saw us pullback from the new high and the pattern is a bit worrying for bulls. That squeeze high was unconfirmed on all 3 GSIs (FGSI, IGSI and MGSI). Additionally both FGSI and IGSI peaked at extreme optimism close to there. And both FGSI and IGSI have geo/fib ratios converging there. That means that yesterday's HOD is THE key level for bulls. They cannot affort to pause here, because if this pulls back it will look like a ST top from where a multi-day decline can start. ML is key, as always. As long as ML is defended, this can be just another "usual" pullback before running back higher. If yesterday's unconfirmed high is not reversed (i.e.bested and turned into a confirmed high) and ML is lost, then the larger topping pattern will be confirmed and bulls will want to be careful for a while.

EWT wise the wave counts align well with TTs. Yesterday's final push looked like an ending diagonal (ED). Which also makes that high the key overlap, just like shown by TTs. If ED, then the entire move off 3720 might be done and would need to be retraced at one of the usual Fibs (38,2%, 50% or 61,8%) before (potentially) resuming the up trend.

mcm-Alex

mcm daily market update 20.Jul.22

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ST trend: neutral (pullback to ML expected)

Yesterday the market gapped up big then ran higher all day in an impressive show of strength from the bulls. In the o/n it coiled between macro-ML and ML, with bulls managing to hold macro-ML and once ML was won back there was no looking back. TTs helped with a 100% BE Xtick off the RTH open, which we warned in real time in the chat room that if broken out can lead to an up squeeze.

The o/n saw the usual pattern play out after such a strong up squeeze. Continuation into a new high, then pullback starting. The current pullback is expected to test ML. That is the normal expectation. After such a strong squeeze we might get a shallow pullback, just be aware of that option. As long as the ML back-test holds, bulls have the ball. If ML is lost, then macro-ML would be next target, so the coming ML test is a big inflection to watch carefully.

FGSI is showing buyers inefficient on the last bounce, so ML test is almost assured at this point. IGSI is below center line after falling from extreme optimism, while MGSI is coming lower from an unconfirmed high. So not all is rosy for bulls, making ML the key lvl which they must defend to get a shot at higher prices before a more significant pullback.

mcm-Alex

mcm daily market update 15.Jul.22

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ST trend: neutral

Yesterday we noted that the ST trend was down with potential bottoming process ongoing, as ML rejected price but FGSI was showing an unconfirmed low already. That low was broken and we made lower lows, but FGSI refused to confirm that low also and buyers managed to find a footing there (near 3720). Atfter that they staged an impressive rally, which was initially rejected at ML, but then they managed to breakout.

The o/n was friendly to the buyers. they managed to push higher than the RTH close, touched macro-ML where price was rejected. The drop came into a ML test which held after the initial spike lower. Now price challenging macro-ML again. The buyers have a slight edge here as they managed to hold ML. FGSI has large swings both ways, so neutral. On the upside macro-ML is the lvl to beat for buyers. Sellers on the other hand need to sustain a breakdown below ML to potentially have a shot at retesting yesterday's lows. Mkt looks coiled between ML and macro-ML, gathering energy for a breakout/down.

Today is OPEX, so we might see large swings both ways to decay both sides. Just be prepared for that and don't leave a position unattended.

EWT wise, the triangle pattern was invalidated. I still think this is a large B wave, but regular zig-zag or WXY, as oppossed to the presumed (now invalidated) triangle. The pattern could sustain one more low near 3700 and still be a B wave. If that plays out, next path is a large C wave move higher to 4200-4300. If the lows at 3640ish are broken, then more immediately bearish. In any case, it looks like we are close to a resolution soon. Max 1-2 trading sessions and the new trend will emerge.

mcm-Alex

mcm daily market update 11.Jul.22

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ST trend: neutral

On Friday we were noting that the ST trend was neutral as we had the normal pullback to ML after an up squeeze, but it was a bit too shallow. Sellers were inefficient on FGSI, but then also buyers showed the same with bearish EE vs the prior high. The market showed that it is undecided during the entire session as it fell quite dramatically after the NFP data, to take out ML, but win it back quickly and then it proceeded to take out the prior day highs after RTH open. Then another 2 whipsaws down to ML and up again near the highs to finish a chop shop.

Sunday and the o/n saw a continued decline and buyers lost ML and also took out Friday's lows. And while sellers have some reason to celebrate, the o/n low came near macro-ML and also put in an unconfirmed low on FGSI. That's concerning for sellers and unless they take out that low, that could indicate an important bottom. Price made it back to ML and it testing its underside, reaction here will be important. If buyers win back ML, then the o/n LOD is confirmed as an important turning point. If ML continues to reject price we could see a revisit of the o/n LOD. Buyers want to avoid a break of that level and of macro-ML to ensure that another leg down doesn't happen.

EWT brings a bit of clarity here, as Friday's highs were not "clean". Meaning the wave structure into those highs didn't look impulsive and it is presumed to be a b-wave high. That means that we should take out those highs before a potentially large decline happens. So this adds weight to FGSI's indication that the o/n LOD might be the low before a strong bounce. SPX cash trumps futures in EWT terms, so we'll have to see what RTH open brings. For not BTD seems to be the better R/R in the big picture. That being said, this is likely to be minor wave 4 of either a large B-wave or of the large C going up. And wave 4s and B waves are notorious for being very difficult to trade, with large and sudden swings both ways. So caution is warranted.

mcm-Alex

mcm daily market update 06.Jul.22

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ST trend: neutral

The market threw in 2 "there and back again" moments as it took out Friday's high in the o/n session, only to give up all those gains and test last week's lows during the RTH session. There buyers found their footing again and rallied right back up to the highs again.

The o/n did little to resolve the situation as we had the usual push to minor new highs, then consolidation back to ML. So far ML is holding, but buyers are unable to move significantly past the highs. FGSI is also showing large swings both ways, so for now it seems the near term trend is up for grabs. ML and macro-ML are the main area and line in the sand. If these are lost, then sellers would take the lead and quite possibly take us lower than last week's lows. If ML and macro-ML are defended, then buyers could start to squeeze higher. Binary outcome so far.

In terms of the big picture, the EWT options also look binary. Either we are already in wave 3/C going (buyers would need to continue higher directly for that), or we just finished a complex correction wave b of 2/B and we should head lower in a minor c wave (or larger 2/B). Target for this would be 3700ish, so buyers need to step in here to avoid that.

Also a note on the new additions to FGSI and IGSI charts. Fib and geometric ratios have been added to these price charts and as can be seen they work quite well. Risk management is paramount for these though, so if playing the convergence of lvls, stops below that lvl are a must. They caught all significant highs/lows so far, so when they trigger it's definitely worth paying attention to.

mcm-Alex

mcm daily market update 3.Jun.22

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ST trend: neutral (pullback to ML likely)

Yesterday we were noting that the ST trend was neutral as FGSI was showing that neither side was in control. Buyers had won ML, but were not able to put some distance to it and with bearish EE on FGSI, there was no clarity to the resume of the up trend. We also noted that "On the sellers' side, they want to break below ML and macro-ML. Yesterday's lows are the last resort defense for buyers, if those are broken, then we likely sell-off directly and could potentially see much lower lows". Sellers did manage to step in hard just prior to RTH open and once macro-ML was lost we sold directly to test the prior day lows. That is where sellers lost the battle. They tested those lows and came within half a point to break them, but failed. Buyers stepped in and launched a rocket never looking back and after winning back ML and macro-ML then proceeded to break the prior day highs. Truly impressive reversal from the edge of the cliff.

The o/n saw the usual pattern that follows an up squeeze set up on FGSI. Price moved sideways consolidating, then when FGSI flashed warning signals that buyers are inefficient, we saw a larger drop which is likely targeting a ML back-test. That is where things will get decided again. So on the downside ML and macro-ML are the lines to watch, while on the upside, buyers would need to win back danny and 400bar MA to signal a resume of the up trend.

As a side note: on the big picture view, as discussed extensively in the members chat room, the EWT and cycle turn dates suggest an important high is close. On EWT terms the current move off the 4070ish lows looks like 3 waves up so far. So the normal expectation is that the current retrace is wave 4, which will then be reversed to new highs. Wave 4 cannot overlap wave 1, so macro-ML becomes important also from an EWT point of view as it is very close to that high. After this 5 waves complete (if that plays out), the danger for buyers would increase exponentially as it is possible the entire rally off 3811 low is done and we could revisit those lows soon.

mcm-Alex

mcm daily market update 23.May.22

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ST trend: up

On Friday we were noting that the o/n ST trend was up, however we did warn that "So for now things look bullish, however I still believe this could be a bull trap, caused by OPEX. Buyers have the edge now, but to confirm the change in trend they would need to sustain a breakout above macro-ML. That would also breakout the upper side of the bear flag. On the downside, sellers need to break down below ML. IF that happens, the danger to the buyers grows exponentially as I believe there is a real chance that we break yesterday's o/n low and potentially go much lower. So if ML is lost, buyers need to be VERY careful.". Buyers weren't able to break above macro-ML and the upper side of the bear flag and we dropped in the "usual" slow grind lower manner until the last 2.5h of the RTH session. The market did break the lows from the prior weak and went about 45 points lower, before finding a bottom. The huge short squeeze in the last 2.5h could be also an OPEX squeeze, as many big names were oversold and the max pain price was higher than where it was then.

Sunday and today saw the market continue the bounce started late on Friday, however it stalled and chopped between macro-ML and ML. Where price goes from here will be important. Same as Friday, this bounce could be only an OPEX short squeeze from Market Makers and now that options expired, we will see if there are genuine buyers here or not, once RTH opens. It is a bit of a coin toss here, I still suspect that this is bull trap though. If buyers can break the o/n highs and sustain a breakout above macro-ML, then we could see a multi-day bounce. However if ML is lost then we could erase the entire late Friday ramp. Compression between the 2 MLs for now, the breakout/down will be large.

mcm-Alex

mcm daily market update 19.May.22

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ST trend: down

Yesterday the sellers showed the true nature of this market as they dropped SPX a whooping 4% and we had a gap 'n go with relentless selling all day. As I have shared in the members' chat room, I have been bearish on these bounces and I think what was published in the daily update 2 days ago pretty much sums it up:

"the target for this bounce is 4080-4100. That zone was reached already, but because of the shape of the waves, I do not think it's complete. I would expect a pullback here to solve the overbought status, then another push higher towards the upper end of the target zone before a larger drop occurs. Just to mention - if my read is correct, it is possible that once this push higher completes, the market can drop below last week's lows. So this is not the place to chase higher for the last 20-30 points, as downside potential is 10x that."

Well, we did get close to 4100 in the AH sessions on Tuesday and early on Wed, before we dropped to last weeks' low today in the am. So that call was eerly accurate.

The question now becomes: what now. Immediate term, buyers are trying to bounce off an unconfirmed low on FGSI and IGSI, while MGSI almost made it to extreme pessimism. Which does put that low as a potential important ST low. Buyers would need to defend those lows for dear life to avoid another repeat of yesterday and potentially a capitulatory crash. On the upside, buyers need to sustain a breakout above 400bar MA and danny and attempt to win back ML. If ML is won back (big IF), then that would aleviate the pressure from the buyers and potentially start a larger short squeeze.

In the bigger picture, the market is in a very fragile state. We dropped a lot and trapped a lot of buyers which jumped in on Monday-Tuesday happily proclaiming the dip is done. Regardless of the immediate term moves, the correction is likely still not done as we didn't see yet the type of capitulation needed before such a move finishes. I am looking for VIX >40 and SPX somewhere in the 3600 area, possibly lower, as targets. So any bounces should be viewed as counter-trend. If buyers win back ML in a sustained way, then that would need to be re-assessed.

mcm-Alex

mcm daily market update 16.May.22

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ST trend: neutral

On Friday we were noting that the ST trend was up as buyers had rallied off unconfirmed lows and won back ML, while sellers were very inefficient on pull-backs. We did mention that while the low looked unresolved (3 waves in EWT terminology), the key lvl to break for sellers was ML. They were unable to do that, despite 2 additional attempts and buyers kept the trend intact, also pushing above macro-ML.

Sunday saw new highs being reached, which stayed unconfirmed and had a pretty large pullback (60 points) all the way into another ML back-test. It held again, however so far buyers were unable to push back towards the highs and price keeps hovering in ML vicinity. So for the moment, the trend looks to be up for grabs, neither side being in complete control. FGSI is also showing that both sides are inefficient. ML remains the key lvl to watch, as long as it is below price that should keep buyers afloat.

mcm-Alex

mcm daily market update 12.May.22

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ST trend: down (with bottoming attempt)

Yesterday we were noting that the ST trend was up as buyers had regained ML and sellers were inefficient on the pullbacks. We did mention that CPI release is "likely to cause some spikes and finally give the direction for at least the 1st part of the day. Overall the market remains weak as any bounce, even large ones, continue to get sold hard. Buyers need to break resistance, then start holding supports on pullbacks to reverse the big trend. Otherwise any bounces are sells.". That played out exactly. The CPI release caused a massive drop erasing all the gains buyers managed to build. The it stopped at the 3950 support lvl and staged an impressive bounce into the 1st hours of the RTH open. After that buyers failed to hold ML and we sold off to new lows.

The o/n continued the bearish character and dropped to lower lows. Buyers are attempting to stick save 3900 and FGSI stubbornly refused to confirm the lows. We now have 3 consecutive unconfirmed lows on FGSI as well as an unconfirmed low on IGSI. So there is at least a bottoming attempt ongoing. Buyers must defend those lows and break the 1st bearish EE lvl to confirm at least a ST low is in. Otherwise the unconfirmed lows set-up can get broken and we continue to sell off.

As a side note - it looks like markets are gripped by extreme fear. It is likely we are going to need a capitulatory action before we find a more meaningful low. As repeated for weeks already, the intermediate target for this down move is, in my opinion, in the 3600 range. That's not even that far anymore as it's "only" 300 points from where we are. Considering that we already dropped from 4600 at the end of March and the brutal sell-off in many stocks, this is likely the initial stage of a bear market. We should get a larger bounce after this capitulatory low, but new ATHs are unlikely to happen for a very long time.

mcm-Alex

mcm daily market update 02.May.22

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ST trend: neutral

On Friday we had another full-on bearish day, similar to the previous week action on Thursday-Friday. After a gap down, which was never completely filled, buyers were overwhelmed and we sold off for the entire RTH session, dropping a whooping 150+ points from prior day's close.

Sunday made the usual lower low, although it was a minor one, with buyers managing to defend that area 3 more times and bouncing, albeit not very convincingly. FGSI is showing that both sides are inefficient, so the ST trend is up for grabs. Fwiw, the bounce looks rather weak, so it is possible we might need another leg lower before a real bottoming attempt. On the downside the o/n LOD is important as it was unconfirmed on FGSI so if buyers can defend it it could be the start of something. On the upside, ML is the key line in the sand, as usual. 400bar MA and danny are also important and it seems buyers are having a hard time holding price above them, which is a further sign of weakness. Bigger picture we could have a capitulatory low today, so in case we do see another flush, watch for reversals (having a lower low which is unconfirmed on both FGSI and IGSI from which price bounces strongly would be a good indication buyers are trying to find a bottom).

mcm-Alex

mcm daily market update 25.Apr.22

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ST trend: down (with bottoming attempt)

On Friday we were noting that the ST trend was down with potential bottoming attempt, as we had the potential for a bottom with FGSI and IGSI showing unconfirmed lows. We warned that "The absolute KEY level for buyers to defend is the o/n low. Below that likely opens up the flood gates again and we could see a repeat of yesterday". Our warning came true, after losing the o/n low, there was no looking back as the flood gates opened again and same type of action as the prior day happened - non-stop selling with little bounce along the way.

Sunday opened even lower (as expected and called out in the chat room on Friday) and we dropped another 40+ points from Friday's close. The o/n today continued even lower. Now we again have the potential for a bottom, as IGSI is not confirming these lows. Price made a double bottom at the o/n low and buyers defended it, staging a bounce, however FGSI is showing buyers are inefficient on this bounce, which is capped by the 400bar MA so far. It looks like we have the same situation as Friday. If the o/n low is broken, then it's possible we will get yet another leg down, similar to Thursday and Friday. If buyers can defend, then we might see a larger bounce, maybe to test ML. Ultimately, it looks like the market has a date with the mid March lows, so the expectation would be for us to see that area before this series of declines stops (at least for a while).

mcm-Alex

mcm daily market update 22.Apr.22

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ST trend: down (with potential bottoming attempt)

Yesterday we saw one of the biggest reversal ever recorded. After the RTH open, buyers pushed higher strongly and triggered a BE on TTs which marked the top. After that, markets took the "elevator down" as price just dropped in a steep manner all the way until the RTH close. Pretty unreal price action and HUGE trap for buyers.

The o/n saw the usual "lower low" which was unconfirmed on both FGSI and IGSI and buyers attempted a bounce there. However they stalled at the back-test of the area where a bottom was attempted yesterday near the RTH close. And it looks like they failed there, as now the lost momentum and price is back below both danny and 400bar MA. The absolute KEY level for buyers to defend is the o/n low. Below that likely opens up the flood gates again and we could see a repeat of yesterday. On the upside, buyers would need to overcome the o/n HOD area (4395ish) to have hopes at touching the next inflection area at ML and macro-ML.

mcm-Alex

mcm daily market update 20.Apr.22

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ST trend: up (with potential topping pattern)

Yesterday we were noting that the ST trend was neutral, with potential bounce coming, as FGSI had set up both bullish and bearish EE, but was at extreme pessimism, indicating at least a ST bounce. Buyers took full advantage of that though and after the initial failure at ML, rocketed past ML and macro-ML in a giant vertical move. We also had another push into the close, before the market finally gave up and dropped quite strongly to the prior consolidation area.

The o/n didn't bring too many developments. Buyers held the consolidation area where price stayed after the initial rocket launch and then buyers managed to psh back towards yesterday's high. This is now a big inflection point. If buyers can power through we will likely get more immediate upside. If they fail and price comes back below danny, then a consolidation down to 400bar MA or even ML is possible. FGSI did peak again at extreme optimism, so at least a ST pullback would be warranted.

mcm-Alex

mcm daily market update 8.Apr.22

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ST trend: up (with correction ongoing)

Yesterday we were noting that the ST trend was neutral as we were still in the prior day's range (from the FOMC minutes spike high and low) and having bearish and bullish EE vs those levels. Sustained breakout/down of those levels was needed to escape the range. Initially we saw a rejection at the upper level, then buyers lost ML and we went down all the way to test the lower end of the range. That held as well and after being marked as an unconfirmed low on both FGSI and IGSI, the buyers stepped in with authority and put in a larger bottom.

The o/n played out well for buyers. We had the usual sideways consolidation from the yesterday's RTH highs, but sellers couldn't even touch ML on the pullback. And then a push to new highs. Now we have an ongoing correction from the higher high, which was marked as unconfirmed on FGSI and IGSI. The pullback again couldn't touch ML, which means buyers are still in good shape. We also had a large bullish EE set up on FGSI. As long as buyers hold price above ML, they are in control of the trend. Yesterday's ramp fixed a lot of the technical damage inflicted in the prior 2 days and if today ML is not lost, it's likely we are dealing with a new found up trend.

mcm-Alex

mcm daily market update 04.Apr.22

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ST trend: up

On Friday we were noting that the ST trend was neutral, as both buyers and sellers were inefficient via FGSI. We did mention that "the bounce is a slow grind and is looking more like a bear flag than a change in trend" and warned that losing the bullish EE lvl set up on FGSI and the important ST lines (danny and 400bar MA) would "If those levels break, then another trip to the lows is likely". That is exactly what happened as buyers failed and the market dropped to new lows. The bottoming attempt near 4500 was caught nicely by FGSI which showed a 2nd consecutive unconfirmed low there, before buyers stepped in for the usual late Friday rally.

The o/n showed a decent continuation of the bounce, as the initial pullback was small and more a side-ways consolidation, then we had another push to new highs, then a pullback from extreme optimism on FGSI, but which set up bullish EE that held. Now we are back near those highs (which are testing macro-ML), but with sellers showing inefficiency. ML was won back also and if it continues to act as support, buyers could get a follow through day until the next inflection area - 4580.

mcm-Alex

mcm daily market update 01.Apr.22

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ST trend: neutral

Yesterday we were noting that the ST trend was down as buyers were showing inefficiency via FGSI. Additionally they attempted to win back ML, but failed to hold above it. We did mention that "ML remains the key level for the trend and if it continues to reject price, that would point to another leg lower". That is exactly what played out. ML rejected price and we dropped into a macro-ML test. Macro-ML was also lost towards the end of the RTH session leading to another 40 point flush.

The o/n saw the usual bounce off extreme pessimism on FGSI. However the bounce is a slow grind and is looking more like a bear flag than a change in trend. However not all is bad for buyers. Sellers keep showing inefficiency and actually set up bullish EE on FGSI. Buyers also keep holding 400bar MA as support. If buyers can defend those levels and win back ML, that would be a serious warning they are ready to take the lead again. If those levels break, then another trip to the lows is likely.

mcm-Alex

mcm daily market update 29.Mar.22

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ST trend: up (with potential topping pattern)

The market has continued the melt-up started in mid March with each ML break down attempt being stick-saved quickly and ML being recovered easily after that. Yesterday was the same as prior 2 days. ML test in the o/n, bounce into the o/n highs, then drop into RTH session to lose ML briefly, but recover it again and then squeezer higher once more.

The o/n saw continued follow through for the buyers. Only sideways consolidation, FGSI showed sellers were VERY inefficient as it declined to centerline on almost no price pullback. Then push to new highs. Right now we do have an unconfirmed high on FGSI and IGSI, which has the potential to mark a larger top. The key word is POTENTIAL. As long as danny holds and/or 400bar MA, the up trend is intact. Sellers need to show up and defend those unconfirmed highs, then break these 2 supports (which held throughout the entire o/n). Once that happens another ML test would be likely and that would be the key for the trend, as always.

mcm-Alex

mcm daily market update 23.Mar.22

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ST trend: down (larger correction attempt)

Yesterday we were noting that the ST trend was up as buyers had held another ML test and bounced off it. Indeed from our post, the market consolidated briefly, then ramped another 50+ points to breach 4500. The RTH session was a "ramp 'n camp" as after the initial push, there was a choppy slow grind.

The o/n saw a pullback from those new highs and we again had buyers being inefficient, which was a warning they might not be able to sustain such a relentless push. And now we dropped into yet another ML test. As we kept mentioning, ML is the KEY level for the main trend. If buyers can win back ML, then this is just another small dip to be followed by new highs. If ML is lost on a sustained basis, then a trip to macro-ML (aprox 50 points lower) is possible and likely next large inflection point.

mcm-Alex

mcm daily market update 16.Mar.22

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ST trend: up (with potential topping pattern)

Yesterday we had a huge reversal day and up squeeze. FGSI and IGSI both signalled an unconfirmed low at the o/n LOD, and those have the potential to be explosive set-ups. Yesterday didn't dissappoint, for sure. After the o/n LOD was touched, the market went straight up with little to no pullbacks. During RTH we had a drop and retest of macro-ML, but that was quickly brushed off and mkt rocketed to new highs to close near HOD.

The o/n was perfect for buyers. We had almost no pullback with price going only sideways after which another push higher started. FGSI is starting to show extreme overbought conditions as price is pushing into sell zones, but the buyers seem very determined and just push higher and higher. Sellers on the other hand are VERY inefficient, tiny pullbacks in price lead to big declines in FGSI, which means they are likely to continue to get squeezed. The 1st step for sellers would be to break below the danny line. As long as that holds as support, the immediate up trend is intact. Once danny fails a pull-back to back-test ML would be expected. There we will have the next big inflection point. If the newly found up trend is to be kepy, ML needs to hold. FOMC today, which should provide fireworks, large moves expected. As usual the "real" direction after FOMC will be seen only tomorrow and with this week being OPEX, that just means more volatility and wild swings in both directions expected.

mcm-Alex

mcm daily market update 14.Mar.22

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ST trend: down (with potential bottoming attempt)

On Friday we were noting that the ST trend was up with potential topping pattern, as FGSI and IGSI were at extreme optimism and near term the market was overextended. We mentioned that as long as danny is supportive to price more upside is possible and indeed once danny was lost, the upside momentum dissappeared. We also mentioned that "In order to keep the new found up trend intact, buyers would need to hold ML on any potential back-test". And ML was lost as well and price fell another 50 points from there. The market also closed at the lows not having the usual late Friday ramp.

Sunday saw an attempted bounce, which failed near ML, and today's o/n saw a proper test of ML which even made it to macro-ML, but failed there. The rejection at ML and macro-ML means the downtrend is still intact. FGSI is at extreme pessimism which indicates a ST bounce is possible, however as long as ML is above price, the main trend is down. Friday's low is important on the downside. It held on Sunday and also today, if it breaks it would likely trigger the next leg lower.

mcm-Alex

mcm daily market update 11.Mar.21

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ST trend: up (with potential topping pattern)

Yesterday we were noting that the ST trend was down with potential bottoming attempt as FGSI continued to show unconfirmed low set-ups. We did mention that ML and macro-ML were the key levels for the trend and that proved once again true. Price continued lower, back-tested ML, rejected to new lows, then had a larger bounce off RTH open to test macro-ML, rejected there and pushed once more to new lows. Buyers managed to take control after that, as FGSI continued to refuse to confirm those lows and had a very impressive bounce to win back ML and macro-ML.

The o/n had a head-fake drop below macro-ML and ML, which was quickly bought to new highs. Then another ML back-test before it continued higher. Buyers were already making good progress and got and additional help from Russia as apparently "positive progress" in the talks with Ukraine is worth a 60+ point ramp. We are in an extended situation near term as both FGSI and IGSI are at extreme optimism, however danny continues to act as support for price and as long as that happens more immediate upside is possible. In order to keep the new found up trend intact, buyers would need to hold ML on any potential back-test.

mcm-Alex

mcm daily market update 9.Mar.22

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ST trend: up (with potential topping pattern)

Yesterday we were mentioning that the ST trend was down as price made lower lows in the o/n and buyers had stepped in to push a bounce into a ML back-test. We noted that what would happen at ML would be important. Price was indeed rejected at ML, went lower to test the o/n lows, before staging a very impressive rally all the way to macro-ML. Then the market did the same as the prior day (similarities to which we noted as well). It went to macro-ML and failed there quickly after, lost ML on the way down and came back to the lows, erasing almost the entire pop.

The o/n proved once more that the market likes to trap both sides in this high VIX environment. The close near the lows was a trap and the market ramped 90 points o/n. Buyers won back ML again and erased almost the entire drop. The action is likely to remain volatile (with VIX at 35+ it's no surprise) and even if buyers managed to step in hard, the next inflection (area near yesterday's HOD and macro-ML) is important to keep an eye on. If price stalls there and buyers fail to make head-way above macro-ML, then we could see yet another trip to the lows.

mcm-Alex

mcm daily market update 7.Mar.22

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ST trend: down (with bottoming attempt ongoing)

On Friday we noted that the ST trend was down as sellers pushed prices to lows at the all important 4280 lvl and then rejected price at ML. We mentioned that ML might be back-tested again and also that "bounces are sell opportunities, until proven otherwise". Both came to pass, ML was back-tested and price rejected there once again and sold off to retest the lows, before bouncing back near ML, holding there until the close.

Sunday saw yet another gap down and flush move, as the optimism that the Russia-Ukraine conflict would get solved over the w/e didn't come to pass. We broke Friday's o/n lows and reached 4240 before buyers finally stepped in and bounce price right back to ML. Now we are directly in a big inflection area at ML. Buyers overshoot it, but failed to put some distance to it. So this can be yet another ML back-test which rejects price. ML has proven to be a brick wall of resistance so far, so that would not be surprising. If buyers manage to hold price above ML and keep pushing higher to put some distance to ML, then we might have at least a ST bottom at the o/n lows. Next could of hours and especially how market acts after RTH open will be key for that.

mcm-Alex

mcm daily market update 4.Mar.22

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ST trend: down

Yesterday we were noting that the ST trend was neutral as both sides were inefficient via FGSI. The latter was showing a potential large divergence set-up, which normally points to a large decline (80-100 points). It didn't play out exactly, as the prior high was surpassed, but it proved to be correct in the end. We did mention "4400-4420 area has a lot of resistances (classic TA - descending trend lines, 200DMA and BC on daily) and is a VERY tough nut to crack, so risk/reward doesn't favor longs here". The market stopped right near 4420 and then dropped 100+ points.

The o/n proved that sellers were indeed in full control. It dropped to test the important 4280 support and bounced 80 points, with buyers attempting to win back ML, but failing spectacularly after that. Now buyers are attempting to hold the area near the prior higher low from the o/n and FGSI is showing a potential unconfirmed low here. That doesn't mean the decline is over, but if buyers do manage to step in here (break above danny would help), then we might see another ML back-test, which would then be the big inflection point (ML is key for the near term trend). For now sellers are in control, at least until buyers can win back ML on a sustained basis. So bounces are sell opportunities, until proven otherwise.

mcm-Alex

mcm daily market update 28.Feb.22

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ST trend: neutral

On Friday we were noting that the ST trend was neutral as the market had consolidated in the o/n following the push on Thursday and was back-testing ML. We did mention that "As long as buyers hold ML, they could continue to push higher immediately" and that played out nicely. ML held price and buyers pushed to gain macro-ML as well, which had a text book back-test before the final push upwards. Mkt closed Friday' session at the highs, which proved to be a bull trap.

Sunday opened with a huge gap down based on the escalation to Russia-Ukraine conflict and the 1st use of the words "nuclear deterrent". Despite the big gap down, sellers didn't accomplish too much, as buyers managed to step in and stick save ML. Further on, sellers dropped the ball as FGSI showed they became inefficient on pullbacks. ML continues to be the KEY line in the sand for the ST trend. If buyers can continue to hold it as support, this can go to RTH gap fill which will be the next upper inflection point. Alternatively, if sellers manage to break below ML and take out the 1st bearish EE level (just below ML), then that would indicate that this decline wants to go deeper.

mcm-Alex

mcm daily market update 25.Feb.22

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ST trend: neutral

Yesterday we were mentioning that the ST trend was down with potential bottoming attempt. At the time we were testing the unconfirmed low on FGSI and it looked like the final low wasn't in yet. But buyers held that low (narrowly) and after the RTH open never looked back. We had a huge up day and TTs showed us that the mkt character changed, as danny held as support all day. Buyers had a huge win reversing the entire large gap, winning back ML and actually ending the day very green. Price finally stopped at the macro-ML test.

The o/n saw the expected pullback to ML, as the mkt was very extended immediate term (FGSI at extreme optimism and sell zones on its chart). Buyers held ML so far, which is constructive for higher prices. For today the situation is pretty straight forward. As long as buyers hold ML, they could continue to push higher immediately. If ML is lost, then a deeper pullback is possible. Buyers do not want to see this heading much lower than 4200, with 4150 being the MUST defend lvl (bullish EE on FGSI vs that level).

mcm-Alex

mcm daily market update 22.Feb.22

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ST trend: up

The market had some wild swings both ways since Friday's close. As the cash market was closed for the holiday on Monday, the algos had some fun, making a lower low on Sunday, then 80-100 points up, down and up again. At the end we are close to Friday's cash close, so for cash traders not much happened, but they missed one heck of a rollercoaster ride.

The low was hit yesterday on a drop to 4250 ES, then buyers stepped in and after a retest of that low in the o/n today, they pushed price 100 points higher and won back ML. That is a significant achievement. Of course, it depends if this time around they can actually hold above, since they managed to spike above it also early on yesterday, before the huge rug pull to new lows. That is the key line in the sand for today. If price holds above ML, we could have a large low in place (cash traders that tried to sell Friday will be very annoyed, no doubt). Adding to that potential is MGSI which hit extreme pessimism (prior trips there triggered large bounces - 150+ points). If ML is lost, then buyers need to be cautious as that could imply another trip to the lows, especially since IGSI is showing bearish EE again (which triggered yesterday's huge sell off). For now buyers have the edge, as price is above ML, they just need to not drop the ball (like yesterday).