mcm-Alex

mcm daily market update 23.Aug.21

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ST trend: up

On Friday we were noting that the ST trend was neutral as in the o/n (ES was at 4385 at the time), both sides were looking inefficient via FGSI. We did warn however that "A sustained move above ML would reassure that the bottoming attempt from yesterday is playing out and the "OPEX scare" is over". Buyers did exactly that, broke the bearish EE lvl, won back ML and never looked back. We did not expect a large move considering the OPEX Friday, but apparently MMs were satisfied to keep just the big names (AMZN, AAPL) in check and the index ran regardless.

Sunday brought more bullish developments, as buyers continued the up move and broke the unconfirmed high that was registered on Friday on FGSI. They also broke the initial bearish EE lvl set-up on IGSI on the 1st bounce off the big low from last week. The only issues for buyers are the fact that the recent high is unconfirmed on both FGSI and IGSI; and FGSI is showing buyers are also inefficient on this bounce. Those things can still change if buyers continue higher, so they still look to be in decent shape. Ideally they would break the unconfirmed highs before getting a retrace to "cool off" FGSI and IGSI. Depending on whether they can do that or not, we will have more info. A ML test from here would be normal (especially since ML was pulled up by price and is likely not far below). The test should hold if this is to continue immediately higher. If ML breaks, then a deeper retrace could come, but in the larger picture it's hard to see how sellers can avoid new ATHs coming.

mcm-Alex

mcm daily market update 20.Aug.21

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ST trend: neutral

Yesterday we were mentioning that the ST trend was down, with potential bottoming attempt. That played out as expected, as buyers stepped in and pushed prices higher, avoiding the most bearish scenarios for the time being. The market rallied hard, pulled back around mid day, then bounced to close the cash session near the highs.

The o/n saw a pullback from there, with a grind lower. FGSI is showing both sides are inefficient, with large swings in both directions, but on small price movements. So the ST trend is up for grabs. Buyers did manage to keep this decently elevated and comfortably above yesterday's lows, which is a positive for them. However ML is still above as buyers couldn't hold the breakout above it from yesterday's session. As long as ML is overhead and acting as resistance, the buyers are not out of the woods. Yesterday's low is a KEY level for buyers to avoid a potential deeper correction. A sustained move above ML would reassure that the bottoming attempt from yesterday is playing out and the "OPEX scare" is over. Speaking of which, being a Friday OPEX, a large move in either direction is probably not going to happen and the market could whipsaw in both directions, but not really make any real price progress by the close. Just something to be aware of.

mcm-Alex

mcm daily market update 19.Aug.21

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ST trend: down (with potential bottom attempt)

Yesterday we were mentioning that the ST trend was down, as price was still below ML and FGSI was showing both sides were inefficient. The market continues to chop between the bearish and bullish EE on FGSI, and even tried to break above ML after the cash market open, but failed to do so. Once the FED minutes were released it tried again to break above ML, but we got a completing signal on TT, with a Buyer Exhaustion (BE) right at that spike high, which was just above ML. It rejected price strongly and even though buyers stepped in after another TT signal (a SE Xtick), the bounce off there made a lower high and then sellers took complete control.

The o/n saw more downside and even lower lows made, which was to be expected given the big confirmed lows on FGSI and IGSI at the cash close yesterday. However now we do have the potential set-up for a meaningful bottom. Both FGSI and IGSI show unconfirmed lows, while MGSI touched the extreme pessimism area (green zone). That is potentially an explosive set-up for upside. The key to this set-up materializing is ML. If buyers manage to break above ML, then sellers need to be careful as a massive face ripping rally could ensue. If ML rejects price, then we might see more downside. Buyers want to defend those unconfirmed lows and avoid them from turning into confirmed lows. On the other hand, sellers must defend ML at all costs to have a shot at lower lows.

mcm-Alex

mcm daily market update 16.Aug.21

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ST trend: down

On Friday we were mentioning that the ST trend was up, with potential pullback set-up, as FGSI was at extreme optimism. The pullback was small, then the market pushed to new highs in a very choppy session. It also made a new ATH after hours. The Sunday session saw a pullback from there (the ATH was marked as unconfirmed high on FGSI).

The current o/n saw continuing weakness and what is interesting is that for the first time in a while, the buyers were not able to lift prices back to new highs out of FGSI trips to extreme pessimism. What is more worrying for the buyer side is the fact that 2 unconfirmed lows on FGSI were subsequently broken. That usually marks a shift in market character (i.e.to something more bearish in our case), so it's a big warning that buyers are no longer in full control. ML was also broken by price and now appears to be holding as resistance. That also confirms a more bearish ST picture. Going fwd, it is important to see how price acts in relation to danny and ML. For buyers to get back in control, they must break back above ML. if they can do that, this might be another failed breakdown from seller side. However if ML continues to act as resistance and price continues lower, this might be the 1st trend down day we had in a while. This week is OPEX so shake-outs in both directions are to be expected. Considering that markets are so extended, a bigger pullback would not be out of the question (1st target 4408-4415 - large fractals on 60 and 135min cycles. Below that - 2nd target is 4370-4380 and the bottom of the prior trading range).

mcm-Alex

mcm daily market update 13.Aug.21

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ST trend: up (with potential pullback set-up)

Yesterday we were mentioning that the ST trend was up, with a potential topping pattern, as both FGSI and IGSI were showing unconfirmed highs. The market did pullback from there and even overshot ML for a brief period. FGSI reached extreme pessimism and as usual buyers stepped in there with authority. They won back ML and after that there was no looking back, market going straight to new ATHs.

In the o/n price went sideways and unlike the previous sessions, we had almost no pullback. The new unconfirmed high on FGSI from yesterday' session was broken and ES just made a new ATH. FGSI is at extreme optimism again, so a ST pullback is to be expected, however buyers have been extremely strong and the trend is up, so unless danny or 400bar MA fail to hold as support, it is dangerous to try to anticipate a turn. Once these do fail, it is likely we will see another ML test, but until then - the trend is up.

mcm-Alex

mcm daily market update 10.Aug.21

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ST trend: neutral

Yesterday we were mentioning that the ST trend is neutral, as both sides were inefficient via FGSI. Since then we had spikes higher and lower, but price went basically nowhere. Yesterday's cash session did finish higher vs Sunday's o/n, so up grind is still holding.

The o/n brough the "usual" vertical price drop which pushed FGSI to extreme pessimism, where buyers stepped in. Price went then back to where it used to be. In conclusion, it seems to be "steady as she goes" as price keeps grinding higher with the ocasional steep drop. ML is still below price and being defended, so until sellers can break below and sustain a breakdown the ST trend is up.

mcm-Alex

mcm daily market update 02.Aug.21

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ST trend: neutral

On Friday we were noting that the ST trend was down with bottoming attempt. Buyers did manage to hold those unconfirmed lows on FGSI and pushed higher into the cash open, before grinding and giving up some of those gains in the 2nd part of the session.

The o/n from Sunday and today saw buyers stepping in again and pushing prices back to the 4420 area. That zone has been a brick wall of resistance so far, price being rejected every time it got there. Today same thing happened with price dropping abruptly fro mthere right into an ML test. What happens from here is important for the near term. ML is key for the trend, as we keep repeating. Buyers would want to see ML holding and pushing back above danny and 400bar MA to put in a successful ML test. If danny or 400bar MA reject price, then another attack on ML is likely, while an ML breakdown would put sellers in the lead. We do have an unconfirmed high on FGSI at the recent o/n high, so a bigger turn could shape up from here, but it depends on whether ML can be broken on a sustained basis or not.

mcm-Alex

mcm daily market update 23.Jul.21

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ST trend: up (with potential ST pullback)

Yesterday we were noting that the trend was still up, as sellers were inefficient, but were warning that a pullback could be coming to test ML as FGSI was showing an unconfirmed high. That is exactly what happened. The unconfirmed high on FGSI led to a pullback into a ML test. The test held quite comfortably (ES never touched ML, while YM overlapped it briefly) and from there the buyers launched another push higher.

The o/n saw continued upward pressure as buyers kept making higher highs, while sellers were inefficient on pullbacks. The main achievement of the buyers is that now they finally broke the initial bearish EE level on IGSI. They also broke the closer unconfirmed highs on FGSI and turned them into confirmed highs. Price is also very close to the ATH, so the trend is clearly up. For the immediate term, we do have FGSI at extreme optimism, so a pullback could happed anytime from here. However, it depends how price will act on the TT lines (momentum, danny and 400bar MA). As usual, if danny gets broken, then a trip to 400bar MA below would be expected. If that also gets broken, then another ML test might be in the cards. As long as these lines hold, we could continue higher with only shallow pullbacks, depending on how FGSI shapes up. IGSI has a lot of room fwiw.

mcm-Alex

mcm daily market update 21.Jul.21

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ST trend: up (with potential topping pattern)

Yesterday we were noting that the trend was neutral as both sides were showing inefficiency via FGSI. Because of the set up on all ST GSIs (FGSI, IGSI and MGSI) we were mentioning that a bigger low might have formed at Monday's lows and that yesterday's action would be key for the intermediate term. ML being the main line in the sand for the trend. The buyers did everything right after the cash session open. They broke above the opening BE and then simply sliced through ML and never looked back. The breakout was very strong and considering the bigger low potential from Monday, the buyers are now back in control.

The o/n continued to show the buyers are regaining strength. It continued to make new highs and most importanly - the IGSI "reloaded" quickly on a small retrace, triggering a very large bullish EE. With ML below price and continuing to be drawn higher and higher, the sellers need to be careful here and wait for a clear set up before trying to jump back in. We do have FGSI at extreme optimism, so an immediate term pullback could occur from here. Momentum line and danny will be the clues if that will occur, as they would need to give way. So far danny has held support very strongly, so it won't be an easy feat for sellers to pull off. If danny gets broken, an ML test would be expected. That would be the inflection point. There is still a slim chance this face ripping rally off Monday's lows is just a dead cat bounce, but it is getting very slim. Only a break below ML would tilt the odds back towards that bearish scenario. Buyers need to defend ML at all costs, while a green day today would be ideal (follow through to yesterday).

mcm-Alex

mcm daily market update 20.Jul.21

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ST trend: neutral

Yesterday we were noting that the ST trend was down, with a potential bottoming attempt (as FGSI was showing an unconfirmed low). We did warn that the bottoming attempt was only a potential as if sellers continued to push, that could have been broken. Sellers did just that and continued to break lower almost the entire cash session, until the last 30min when buyers stepped in and staged a larger bounce. The follow through on the downside after Friday's bearish session is a serious warning a larger shift is at hand (from full-on bullish to a bearish stance), so longs do need to be careful here.

The o/n continued higher building on the late bounce from yesterday and a bigger dip showed sellers were inefficient, so the trend went back to neutral. Boths sides are inefficient as shown by FGSI, so the ST trend is up for grabs. A ST bounce after the sell off from the last 2 days should be expected. The only question is if it's just a dead-cat bounce or are buyers ready to step back in with authority. We do have the potential for a big low at yesterday's lows with IGSI and FGSI showing that low to be unconfirmed and MGSI touching extreme pessimism there. So there is a possibility that the correction is done and market runs back higher. However buyers need to prove themselves now, as the last 2 days were showing a change in character with the bounces failing. ML is, as usual, our main line in the sand for the trend. It was decisively broken on Friday and yesterday there was only a feble attempt in the o/n to touch it. So the ST trend was clearly pointing lower. Now this bounce took price right to ML and it's just whipsawing around it. That means the current area is an inflection point. Depending on which side of ML the price will settle will dictate the near term trend. The bullish and bearish EE levels on FGSI will be additional confirmation after that.