The Only Variables We Control: Risk Management Concepts

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Projections Suggest a Significant Turn in September

It has been a wild week or so. We have been asked often recently regarding short-term MSP and why we have not been publishing. The question has been more-or-less: "has the effort of publishing this data ended and is that why short-term MSP has not been published". While it is correct that this data takes a lot of effort to build and is not principally created for the general public - this is NOT the reason that we have not published these data. The reason is that when the markets become as volatile and emotional as they have been, the best thing to focus on is the larger picture and the fundamental near-term emotion and price movements of the markets. Sometimes it takes a few days for the markets to overshoot - which seems to be the case curgently. Markets may be in an altered state of reality...we have been referring to the market being on "METH" the last week or so in the "Lounge". Therefore, we have felt that short-term market structure is more of a distraction then needed and only been referring to it judiciously as it points to highly probable data point inflections and probabilities.

So, what is the bigger picture? It appears that there is a tremendous amount of coincidence pointing to the 3rd and 4th weeks of September. In Gold, the US Dollar, Oil, the Dax, EuroStoxx 50, S&P500 etc...all have confidence for a probability for  a risk reversal in the mid - to latter part of the month into the end of October. Ironically, for risk assets - despite the anarchy going on in the world - there seems to be a predominant bias for a bid in the markets into this coming week - most probably mid weekish. A reaction from these areas are to be most interesting. Some charts have broken down into potential downward impulses and these patterns would usually imply a retest of the breakdown area - which coordinates with the levels charts on the SPX cash posted earlier - suggesting a retest of 2010 at the very low end and up to 2090 on the high-end. 2045 to 2060 SPX cash seem like a serious area to watch. But these price levels have nothing to do with MSP and are just educated guesses.

Another element arguing for further time for upside is that the normal up wave for a 60-minute bar calculated wave is around 155 hours. This would fit well with mid-week. However, given the veracity of the move down a bit more time could be required additionally.

Below are some updates to the MSP charts that cover this probability scenario:

August 30th, 2015 S&P500 Daily & Weekly Market Structure Projections

August 30th, 2015 S&P500 Daily & Weekly Market Structure Projections

August 30th, 2015 DAX Daily & Weekly Market Structure Projections

August 30th, 2015 DAX Daily & Weekly Market Structure Projections

August 30th, 2015 EUROStoxx 50 Daily & Weekly Market Structure Projections

August 30th, 2015 EUROStoxx 50 Daily & Weekly Market Structure Projections

August 30th, 2015 Oil Daily & Weekly Market Structure Projections

August 30th, 2015 Oil Daily & Weekly Market Structure Projections

August 30th, 2015 GOLD Daily & Weekly Market Structure Projections

August 30th, 2015 GOLD Daily & Weekly Market Structure Projections

“Applied Cycle & eMotional Impulses” Webinar Scheduled – See Post for Details

Our webinar, proposed earlier in the week, has been scheduled as per the vote results. We would like to thank all who have voted and helped us identify the best time for the majority of all. The webinar will be recorded and a recording may be available after the event.

eTickTools Additions Detail

eTickTools eMotion Impulses Detail

The webinar is Free and does not require any registration, reservation or credit cards. The objective of the webinar is to discuss details regarding identifying and understanding impulse cycles and eMotional Extremes impulses and how these elements can provide a disciplined edge for trading and especially in volatile or crashing markets. We believe these concepts can provide a objective and disciplined approach with which to interface with markets and manage trades generally and especially so, when market activity is aberrant and trade entries are difficult to locate, execute and risk manage.
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We look forward to seeing you tomorrow.
 
1. join our Webinar session:
     Sunday, August 30, 2015, 8:00 PM, Eastern Daylight Time.

       click to join the webinar
     Meeting ID: 1398-5896
     No password needed
2. Use your microphone and speakers (VoIP - a headset is recommended). Or, call in using your telephone.Dial:
      +1 408-385-2536 (USA)
      +1 408-351-1612 (USA, alternative)
Access Code: 2982-860

mcm “Applied Cycle Impulses, Applied eMotional Impulses – Volatile Markets” Proposed Webinar

eTickTools Additions Detail

eTickTools Impulses Detail

Identifying Impulses Down

Identifying Cycle Impulses Down

Last week we posted this post: Crash Potential and Techniques to Trade One . Since then, in "the Lounge", these techniques have been effective, objective and powerful. The amount of interest, the need and state of the markets leads us feel that further examination for the benefit of our members and readers of such a quantifiable approach. We are putting the Webinar scheduling and attendance to a vote.

The webinar will be free and will be an interactive Q&A format when it is scheduled. We are seeking to get a near-term slot assigned that is convenient to as many people as possible. We feel that there is a benefit on getting this scheduled as soon as possible as the markets, though slated to remain in an upward bias into September, are not in a healthy state and can break at any time. Our goal is to assist in helping users to find techniques to identify, take advantage, manage and prosper from unexpected shocks or dislocations and emotionally charged market environments.

Below is a vote. Please choose the times that work best for you and supply your email address and we will update you on the final scheduling of the webinar. Note all the times are quoted in Eastern Standard Time (New York) Also, note you can become  a registered user for our site and vote which will make it easier to sign up for the event once iit is scheduled. . Registering is free. Simply click on "Register" on the login page.


This poll is closed!
Poll activity:
Start date 28-08-2015 04:17:55
End date 29-09-2015 23:59:59

Poll Results:

Scheduling options for the "Applied Cycle Impulses, Applied eMotional Impulses - Volatile Markets" webinar, when would be your preferred timing?


 

Exceptional Day and Exceptional Times

Today was filled with outstanding eTickTools triggers, market impulses and emotions. Market eMotions are running at 78% above normal and  we got one x-tick after the other today for exceptional trading. quite amazing really. The changes rolled out and techniques discussed this weekend were extremely useful in trading crash oriented markets. So, on that front, things are quite outstanding.

However, on the market front, we felt that an update of the mcm Smart Money Indexes was in order. There is no shortage of jaw-dropping action represented in these indexes. For all the central banker jawboning, they really have "no real commitment" and are willing to let the people they claim to serve, endure unbelievable hardship. China has all but given up with their ruse and is actively  bankrupting everyone that it can find in order to support the "central planner panacea that all goes back ultimately to the Fed" and which ultimately goes back to theBank of England.

The only account balances that look any ok over the last few years are manipulation accounts (paper accounts of the central banks). Reality is that transactible mechanisms for these cartel members are fast declining, as is cooperation. The net worth and equity of the central banks globally is working hard to press ultimately into negative territory. Cooperation is declining because positive equity and are now moving towards negative equity - money printing in this respect is irrelevant. Though it is imaginable that if you, in a similar situation as the central banks,  could make cooperation aramgements with Prada to trade over-prices and senseless objects dejour with them while you have the perception od viability and they are desperate to sell them. However, if a sustainted period where you and Prada go into negative equity, their inclination to sell is hampered by their inability to do business just as yours would be. So, to go to Prada to spend $100,000 on a bag or sunglasses with -$1,000,000 in the account from which you plan on paying the bill with just an agreement of cooperation with an insolvent Prada who can no longer make, locate or deliver the object you seek is likely to not be a long-lasting venture. Initially, Prada may give try to come up with some terms for them and you to record the sale on their balancesheet, but very soon the mat in front of the Prada store for you and Prada would be gone. So much is similar for a central banker with such decrepit math skills.

The mcm Smart Money Indexes demonstrate clearly that markets have only just begun this move. Many traders may be feeling left out or way too left in. However, the implications are traders resentful of not having closed longs at higher prices are goign to end up quite  a bit more resentful in short order and those who feel like they missed the short of a life time - will soon if they do not focus on the setups that are only JUST BEGINNING. The market move has barely started is not anywhere near complete by all the measures we can see, In the near-term we still anticipate, via MSP data, some strength emerging this week into week 1 of September followed by decline and then strength into the week of the 21st followed by what can likely be a larger cash than the current down move - unless the arrogance of central banker meets cooperation and commitment on a massive scale of course -(which seems unlikely). So, to the charts - further explanation not necessary:

August 25th, 2015 mcm Smart Money Indexes Update

August 25th, 2015 mcm Smart Money Indexes Update

'Building Pretend Markets Not for the Good of the People"
- your friendly neighborhood central banker

From the perspective of a criminal mind, the screen-capture of the Bank of England website below is disturbing on many levels. Firstly, central banks, of all things, should NOT be focused on "BUILDING ANY MARKETS" they should be focused on maintaining the sanctity of the currency and the banking/financial system. It is absolutely stunning that they would admit, in such heavy-handed language, to "BUILDING MARKETS". Secondly, IF one were a large institution or firm of any kind, the choice of words used by BOE implies an objective that just does not fit with an authentic of organic venture. In fact, it implies an effort to convince of something in slight of hand fashion. To sell a scheme - a perspective. Any self-respecting firm would most certainly use any other combination of words than those chosen by BOE: "Building modern markets for a modern world" or "Building Innovative, Advanced  and Safe Markets for the World" come to mind as more of the line of thinking that a normal, authentic non-criminal enterprise might use.

However, a cult leader and or a criminal mind would certainly go through the greatest amount of effort to describe something in grossly deceptive fashion, by using the obvious and simplistic approach of using the very opposite words really apply. And this in a vein attempt to distance from the real agenda or implications. Normally such a technique does not work well or long...hence the word "REAL" and the word "GOOD" must clearly be inverted in the BOE usage, The real operation being undertaken by the BOE is more likely of descibed with the use of  "FAKE" and "BAD" instead. The gaul of this public facing message in these times is truely representative of the thinking en-masse of the central planner mindset - arrogant beyond belief and decpetive beyond reason.

When viewing the mcm Smart Money Index and Gap Index above, consider the implications of the below in understanding what is really occurring.

Central Banks Bravado and Arrogance is so complete that they are not embarrassed to virtually admit the truth

Central Banks Bravado and Arrogance is so complete that they are not embarrassed to virtually admit the truth

S&P500 Expert Lounge Update – August 25, 2015

Our last formal update forebode the breaking of the long term bullish channel on the S&P 500 cash index around the 2020 level and looked ahead to what could be the next levels of support. 2000 did not provide any support & subsequently 1980 did not either.  For the S&P 500 futures market, the open on Sunday August 23rd was yet another gap down & immediate breach of 1960 ES, which was a major support shelf.  This action pointed to a possible extreme scenario which subsequently played out in the overnight session. It is important to remember that when hyper trends end in either direction, like the one which ended with the breach of the long term weekly SPX chart (attached), an equal or greater acceleration in the opposite direction is highly probable.

Monday August 24th cash open was one for the record books as the DOW opened down over 1,100 points & the S&P 500 futures index was 'lock limit' down prior to open.  As you'll see, the market found it's first level of long time support & then proceeded to put in a wild ride of intraday volatility which is shown in the additional SPX chart & contains near term potential inflection points if the market is to resume an immediate downtrend.  The first obvious level is the downtrend channel.

Please adjust trading approach to factor in the volatility expansion when taking position sizes or your trading will also experience 'risk expansion'.  Stay patient & disciplined.

As always, please continue to monitor the Market Structure Projections via our blog at http://mcm-ct.com/blog/public/  and stay nimble in this market environment.  Good Luck to your trading

These are key MA levels: 2077 (200sma) - 2095 (100sma) -  2086  (50sma) -  2052 (10sma)

These are key support and resistance levels: 1867 - 2040

Bulls Find First Level of Long Term Support

Bulls Find First Level of Long Term Support

 

Near Term Symmetry for Probable Inflections

Near Term Symmetry for Probable Inflections

1825 S&P500 Level is Critical – Below it is No eMotional Support Till 1640

This post is in no way is suggesting that 1640 gets attention presently, but if 1820 breaches there is a high likelihood that a fairly direct test of 1640 over time would occur.

Larger Picture eTickTools Historical Emotional Extremes

Larger Picture eTickTools Historical Emotional Extremes

Update on Historical eTickTools eMotional Extremes

True to form, in a matter of hours this centrally unplanned disorder is reaching targets that usually occur over months in hours...here is an update

eTickTools Historical eMotional Extremes Update

eTickTools Historical eMotional Extremes Update

Support and MSP for What appears to be a Pivotal Week Coming Up

With the obvious situation impacting the world of total disintegration of central bank cooperation - to expected effect, we now have the addition of extremely high pressure on Chinese investment firms and institutions to sell everything that is not glued down and that is NOT a Chinese asset. If they can not sell a Chinese asset or share without going to jail the next best thing is to apparently blow it up and also to sell non-domestic assets - such as US stocks, European Stocks and anything else that is not glued down that the Chinese officials will not arrest them for. If this capitulation is to continue things can get very messy indeed. But before we throw out the baby with the bath water, let's take a look at what the markets would be expected to do if the third transaction type for fund managers were not "BLOW IT UP".

DAX and Euro Stoxx are at inflection points and can start a large rally and by the looks of things, would potentially be very painful for shorts. Longs are already in pain and it seems they need to sell too just so the pain is shared more equitably. Funny how that is centrally planned. But in any case, there appear to be quite a lot of influences coming up that imply a convergence to the upside that by the looks of things could be swift. IF we can not get the hint of some traction to this structure, then it should be apparent that the brakes are not working and likely the ground is moving which could imply a "crash". Crashes are rare, even though this feels like a crash already, nonetheless, the urge to get emotionally involved in a crash is not usually a highly rewarding one and caution is warranted. It is common for us to stress that most money earned from trading is not on huge winning trades but on normal base hits. We have worked very hard to increase the odds on base hits and to be open to larger trades when they happen. We also have worked hard to developed tools and approaches to handle a crash or very powerful trend. However, it must be restated that smart and judicious trading is far more rewarding than big winners followed by a string of many losses of arbitrary size - usually larger than the large winners, though. This is why we can not overstate that the potential of this change in psychology in the markets will take more than a few days and the opportunity has not even started yet...patience and restraint are highly rewarded. Buying multimillion dollar jet planes before you've closed what appear to be gigantic winning trades is equally unrewarding. So, in all the lessons we can reinforce, patience, discipline, and clarity is key NOW.

Below are various charts that may help put some perspective on where the market is standing. On the Historical eTickTools Emotional Extremes - Support and Resistance Chart note, that one fo the objective is to show thin zones and also to show areas of congestion. Brighter or more intense colors indicate stronger influence, Light colors indicate previous resistances and darker colors are previous supports.

Historical eTickTools Emotional Extremes - Support and Resistance

Historical eTickTools Emotional Extremes - Support and Resistance

DAX Daily And Weekly Market Structure Projections

DAX Daily And Weekly Market Structure Projections

Euro Stoxx 50 - Daily And Weekly Market Structure Projections

Euro Stoxx 50 - Daily And Weekly Market Structure Projections

Oil - Daily And Weekly Market Structure Projections

Oil - Daily And Weekly Market Structure Projections

US Dollar - Daily And Weekly Market Structure Projections

US Dollar - Daily And Weekly Market Structure Projections