The market is showing horrible internals, participation and mcm Money Index activity. Notwithstanding, implications are not particularly good. There a tendency for weakness into around the 7th of August +/- a few trading days. This week sees weakness into the Friday AM session with some up sticking into Monday AM over the weekend. This then leads to larger cycles and downward pressure into the target structures. So far MSP has done an excellent job, but the days have been pretty choppy which has been frustrating.
This year, after several amazing years for trend followers has been one of the most horrible trend following markets imaginable. This condition may start to improve as we move into the end of the latter half of the year...with September/October being a particularly good looking time for trend following to gain some traction.
Daily MSP played out nicely today - calling for a down AM session - a condition which was met. Tomorrow's market structure projection begins a phase of stronger weakness into what likely means a trip to from the Brick Wall, under the Full Moon and into the Last Moon - the only thing missing is the spoon? or is that not how it goes? Today's buy effort exerted and wasted a lot of energy getting nowhere. Accumulation Index was very strong after 11:00 AM into the close but was mostly wasted as net cash added to the market was flat to negative all day - which means that shorts were getting squeezed and being sold to with little new capital being reallocated into risky positions. NYSE remained below the 200-day moving average, Dow remained below the 200-day, RUT is not even bouncing, Nasdaq is weak and lethargic. The market can overcome these impediments. If it wishes to do so it has to do it fast because the downward tug of cycles is starting to go into overdrive. In addition to that, daily and Weekly MSP have not fulfilled their metronomic magnetism - we envision they will - much to the surprise AGAIN of most analysts who are wearing the popular YellenDragAmarni shaded glasses. (quite expensive BTW)
The proposed Elliott Wave Structure here at mcm is derived independently and objectively outside of the data and analytics of the Market Structure Projections (MSP). At this time, the count coincides and supports the data which is calling for a pronounced bearish week or so into around August 7th, 2015. As a trader and market participant it is important to look a for confluence of professional data and technical work when evaluating risk. Please be cognizant of the chart herein & as always, control your risk & good luck to your trading.
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Yesterday turned out mostly as expected. we were on the look out for weakness after around 1:00 PM. Normally a FED specific MSP would be run, but due to the simple nature of this move off the lows, strong daily and weekly market structure projections and development work on our chart streaming infrastructure, we opted to NOT run a fed specific MSP. On review, this was less than optimal and we will now always run Fed Targeted MSP, in addition to weighting that data in intraday projections higher. Was a solid day and we did not get sell signals till around 3:00 pm. In any case, predominant, impulse towards downside now takes over int he markets and has strong potential to be more pronounced than most are expecting.
Yesterday saw a lot of bears flipping bullish and technical and EW analyses bias shifting. We see no reason for this and, in fact, see that activity as further reason that downside has potential to be more pronounced. We do not find market facts that support a change in stance. One of the more consequential issues with most trading analysis is relying tools that require an opinion and arbitrary change of such opinion. When many opinions change towards one direction or another, its usually not a good sign. When such occurs when down fails the 200 SMA, NYSE showed a horrible showing and Nasdaq Composite was barely able to bounce 50 points, it is most probably not a great moment to shift bullish. In the present situation, we see the resident bullishness in market analysts is a large negative...which makes us the more grateful for out methods and tools and further reinforces the bearish implications.
Consensus probabilities are for downside price progress today as shown below - starting either with a 3:00 AM timing or roughly market open timing around 10:00 AM.
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Central bankers have so far disrupted the financial system that everyone knows that some sort of perturbation of ethics and values is involved - even french farmers (shown below) who are keenly aware that the commodity blow up is a perversion and certainly not something that coordinates with the rising costs of assets and stocks nor the amount of risk they are being forced to take by these centrally planned stresses.
We are approaching the momentum peak for this week as shown in the MSP chart below. Downside into next week could be rather pronounced. The MSP chart has done an outstanding job of being ahead of the curve and is suggesting that an important point is approaching:
Currently, highest probabilities favor moderate/choppy strength into 11:00 AM +/- with a fair consensus on weakness thereafter into the afternoon. There could be a some moderate bounce into the close but it is important to note that our 1.5-day wonder is approaching expiry. We will post an update to the dily probabilities shortly - which have been prescient to say the least. So, currently a brick wall is approaching and it will require a huge central banker wrecking ball to break through it - failing that the coming reversal/failure has high probabilities of making our previous decline so far this month look moderate in comparison.
As represented in daily projections: weakness was expected in terms of down from yesterday's AM to today's AM. Even with the bounce on-going, that condition has been met and bias shifts upwards into tomorrow - possibly slightly beyond - hence the 1.5-day wonder. The end of this week has probability for the strongest weakness so far seen in this move from the highs, this probability favors any up move near-term to be a part of a failed retest and 1.5 day wonder. Today's probabilities favor an opening strength followed by weakness into the afternoon.
A few additional comments: The fact that we did not test below the 200-day simple moving average potentially creates a bearish situation - one in which the current bounce continues directly to its inflection point and then the 200 day is broken directly thereafter. Normally more weak-hands/strong-hands trade should occur around and slightly below the 200-day simple moving average area.
If intervention occurs too strongly or the bears capitulation is too fast and/or combined with bulls urge to buy beign too strong, this means these hands (conviction) have not been sufficiently tested. Odds of break of 200-day moving average increase significantly in such a situation as opposed to odd of testing it on next drop. The only saving grace would be a retest of 200-day sometime today...but that does not fit extremely well with the scenarios.
Below is an update of the market structure projections posted earlier. Daily MSP has tracked perfectly and intraday is on track for any bounce to fail around 12:30 to 1:00 PM with a high probabilities of weakness into the close. This most likely sets up the fulfillment of daily MSP's suggestion of a down Tuesday AM versus today's AM session followed by a decent bounce into Wednesday AM which most likely fails.