mcm daily market update 6.Dec.21

ST trend: neutral

On Friday we were noting that the ST trend was neutral as both sides were inefficient via FGSI, having both bullish and bearish EE set up. The market did the same thing as the day before, namely rallied initiailly and broke the bearish EE lvl, until FGSI hit the extreme optimism zone. Then broke back lower to new lows. Buyers then stepped in from an unconfirmed low on FGSI and we got the usual late Friday ramp to repair the weekly close (as much as it could be repaired anyway).

Sunday saw a continuation of the boucne off Friday's lows and after reaching a "high plateau" a slow chop grind. The o/n today saw a push higher until FGSI reached extreme optimism, then the usual drop from there right into FGSI extreme pessimism. Buyers stepped in, of course, and now we are in a bit of "no-man's land". A few things are worth mentioning. FGSI kep showing sellers were inefficient on Sunday and even today on this larger drop. Buyers however also appear to be inefficient, having bearish EE vs Friday's high. Price is now close to ML, so a push higher would need to be taken seriously by the sellers, as it would indicate an attempted breakout. As can be seen on the FGSI chart the macro ML (thicker line above) was tested on Friday and even spiked above, only to reject price hard there. So price reaction to those important lines in the sand (ML and macro ML) will be important. The them the past 2 weeks has been o/n rally which spills into the RTH open, only to have the market drop hard from that high. It remains to be seen if this happens also now, while sustained breakout over 4600 is likely to be problematic for sellers.