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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 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 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 21.Jan.22

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ST trend: down

Yesterday we were noting that the ST trend was neutral as price was testing ML, so it was decision time. Breakout would get an up squeeze while rejection would lead to immediate downside. We did get the breakout and a large up squeeze right into macro-ML. However, as we warned yesterday "Ultimately, it seems likely that we have unfinished business on the downside". The market rejected hard at macro-ML and buyers did have a feeble attempt to defend ML, but failed and after that there was no looking back. The market lost a whooping 100 points after ML was lost.

The o/n continued the pattern of the last few days. Instead of seeing an acceleration and breakdown, it put in yet another attempted stick save. Price made a lower low, which was unconfirmed on both FGSI and IGSI and the cue to start an attempted bounce. This one, although looking similar to the one from yesterday, didn't make it to test ML yet, so from that perspective looks weaker. Today is OPEX so there was always the prerequisites to have many shennanigans, but with VIX so elevated and markets in a very fragile state after these aggressive declines, whipsaws both ways are expected to be larger than normal. So reducing size and being extra nimble is required if wanting to actively trade. Same as yesterday, it doesn't seem like the market found a stable low just yet, despite the large decline. So the main trend is still down. Large bounces are possible, but are likely to be good selling opportunities, while attempting to buy dips is extra risky. Dust should settle after OPEX, so the timing window for a potential important low would be Monday or Tuesday.

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 7.Jul.21

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ST trend: up

Yesterday we were noting that the ST trend was neutral, but the set up was there for a bigger correction. ML did give way and we did get a decent decline, until the market found a bottom at an unconfirmed low on FGSI (alerted in real time in the mcm chat room). Buyers stepped in strongly there and after breaking an important emotional area with 3 exhaustions (2 BEs and 1 SE), they pushed price directly to ML and broke back above.

The o/n saw a bit of consolidation after the big bounce off yesterday's LOD and for a while the trend was neutral, as both sides were inefficient via FGSI and we had both bullish and bearish EE setting up. However it was again buyers who took the lead, they held the bullish EE and broke through the initial bearish EE level. ML continues to move higher (pushed by price) and is the key for the trend. As long as buyers can keep price above, the trend is (back to) up. Losing ML would be a serious warning that we might get another attempt at more downside, but at the moment yesterday's LOD looks like the end of the near-term correction.

mcm-Alex

mcm daily market update 5.Mar.21

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ST trend: neutral (with bearish risk)

It seems the market stopped tipping its hand in the o/n session and keeps things in suspense until the cash market open. For several days we were noting that the trend was neutral as both sides were showing inefficiency via FGSI in the o/n session. Yesterday the buyers staged an attack over ML to get us back to an uptrend, but failed just above as the markets were disappointed by Powel's remarks. Funny how that works. So just to mention this again: ML is a KEY level for the overall trend. If price is above, we have a bullish bias, while if price is below - bearish.

In the o/n, both buyers and sellers were inefficient, as the market still tries to digest the mini-crash off Powel's statements. We have bearish EE above which held price action and pushed it lower and now bullish EE set up with FGSI bouncing from extreme pessimism. Those levels remain important and a breach would mean one side is getting the upper hand. Buyers want to hold the bullish EE and ideally to break back above ML. That would help them and could trigger a "relief rally". Sellers want to make a stand at (or below) ML and try to attack yesterday's LOD. Breaking the bullish EE level would help them significantly.