MCM Newsletter – Outlook for Week 29 Feb – 6 Mar

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral
Short-Term Trend (480&288min): neutral

Details:
The weekly cycles are still just oscillating, last generated signals being support at 1804 ES and 15364 YM. The market continued to bounce from the back-test of support and now the price reached the mcm-MA, about which we were mentioning last week that would be interesting to watch for a reaction.

Weekly Cycles

Weekly Cycles

On the daily cycles, both YM and ES triggered resistance levels, but which were spiked above by the relentless bounce. The market did not yet break into an up impulse, as the mcm-MA is still below the break-out level, however it will, if the market continues to head higher. Interesting is that the last LRE (lower risk entry) for shorts was canceled on YM, as the mcm-MA turned green. The market is still below the LRE level, so if it would’ve been played, it would still allow for a profitable exit. Going forward, near term it would be important to watch if the break-out over resistances was just a head-fake or if it will turn into an up impulse. The levels of the resistances (1944 on ES and 16516 on YM) are therefore still important to watch, to see if the break-out will hold or if the market will come back below.

Daily Cycles

Daily Cycles

The 480 and 288min cycles are in slightly different positions. Both broke into up impulses, however 480min reversed the up impulse, by having support trigger lower than the break-out level and now showed a new resistance at the high of the week at 1969. 288min broke into an up impulse which held and started the dissipation phase having already a 2nd END at 1941.75. The market broke above and had a capitulation bar at the high, reversing afterwards and now the market is back-testing the previously broken resistance. This back-test if very important near term, especially since the mcm-MA is testing the break-out level as well. That means that if the market bounces from here, the nested up impulse will likely be confirmed and more upside will be expected. Breaking below the back-test would invalidate the up impulse and we will be on the look-out for a new support level lower.

480 & 288 min Cycles

480 & 288 min Cycles

MCM Newsletter – Outlook for Week 22 – 26 Feb

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral
Short-Term Trend (480&288min): up

Details:
The weekly cycles are still just oscillating, with support having triggered at 1804 ES and 15364 YM. The market visited the support levels again and bounced from there, continuing the move also this past week. Except for the above mentioned, there are no close-by price levels at which the weekly cycles are pointing at, although, if the market continues the up move it would be interesting to see what happens when price reaches the mcm-MA.

Weekly Cycles

Weekly Cycles

On the daily cycles, YM continues to generate interesting signals, while ES is still caught whipsawing it’s support level, the past week being able to recover it for the 2nd time, after breaking below. As expected, YM did generate a resistance level in the form of a bearish retracement (BR), however this was not able to put a stop to the bounce and the market managed to break above (highlighted at point 1 on the chart). After the break-out, 2 consecutive LREs (lower risk entries) for shorts were triggered (point 2 on the chart) which are a warning that the break-out might be short lived. Indeed, looking at the recent generations of LREs, both for shorts and for longs, respecting them has been quite rewarding. An important aspect to mentioned about LREs is that they only generate in the direction pointed by the mcm-MA (either short if mcm-MA is red or long if the mcm-MA is green). Once the mcm-MA changes color the previous LREs are considered canceled (highlighted at point 3).

Daily Cycles

Daily Cycles

The 480 and 288min cycles showed the impulsive nature of the bounce. Although both generated resistance levels at the same price (1893), the market managed to break above (highlighted at point 1 on the chart) and started up impulses. At point 2 on the chart, we can see that both back-tested the break-out levels and bounced slightly. Going forward, the action on Monday (and possibly Tuesday) is critical for the near-term direction since if the market continues to move up, that would mean the back-test of the up impulses held and the normal expectation would be for these to develop into fully fledged impulses, which can travel quite substantially in the direction of the trend. On the other side, if the market falls and breaks below the break-out level, that would reverse the up impulse and cancel the bullish momentum (at least until another support level is triggered). So 1893 is a very important level near-term.

288 & 480min cycles

288 & 480min cycles

 

MCM Newsletter – Outlook for the Week 15 – 19 Feb

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral/down
- (new) Short-Term Trend (480&288min): neutral
- Very Short-Term Trend (60min&135min): up

Details:
As mentioned in the previous newsletters, the weekly cycles are still just oscillating, with support having triggered at 1804 ES and 15364 YM. As anyone familiar with our newsletter figured out by now, the weekly cycles do not impulse very often. However, when they do, it’s a big deal. That being said the market was close to starting an impulse down in the past week, as the market visited the support level again. It bounced for now, but going forward it’s critical to watch if the support will hold (at least until a resistance level is triggered).

Weekly Cycles

Weekly Cycles

On the daily cyclesYM is in a confirmed down impulse while ES also moved below its support level and could confirm the impulse down soon (by having the MA move also below the support level) if the market doesn’t continue to bounce. If the market continues up, the 1.892.25 level is still the big line in the sand for ES, while for YM the trigger of a bearish retrace (BR) resistance would be important. If the market turns down a confirmation of the down impulse would be important on ES and although no formal support (in the form of a cyan line) can trigger, the dotted lines are important historical levels. Also worth mentioning is that the 2 LREs (lower risk entries) for shorts which triggered on YM (highlighted on the chart) worked very nicely, since the market retreated quite substantially from there.

Daily Cycles

Daily Cycles

An important addition was made to the mcm tools in the past week, with the streaming of the new 480 and 288min cycles. These had very clean signals and going forward will replace the 60 and 135min cycles in our weekly newsletter (since the 60 and 135min are faster cycles and change more often during a week’s time). This week, however, both will be included.

Both 480 and 288min cycles broke into down impulses at the beginning of January. And as it can be seen in the highlighted zone at point 1, the 288min had a classic full unwind of the down cycle with a 3rd END which was only briefly spiked below with 1 bar, that was also a capitulation bar. The 480min behaved a bit differently. As shown at point 2, while 288 was finishing the unwind of the down impulse, the 480 hadn’t began it yet (although it also had a capitulation bar at that low). After that point, the 288min started to oscillate, while the 480min started to unwind the down impulse and finally triggered a 3rd END at 1843.5 . At point 3 we see that although 480min cycle was hinting at a possible nested impulse down, the 288min triggered a very clean support which held and the market bounced nicely from there. At the moment, it is important to be on the look-out for a resistance level which could trigger on 288min and is not unreasonable to expect it to trigger on 480min too once the market turns back down (either from here or slightly higher). Also important to mention is that 288min had a LRE (lower risk entry) for shorts trigger at the last bar. Although this could be spiked slightly, it is a warning for longs.

480&288min Cycles

480&288min Cycles

The 60 and 135min cycles fully showed the strong whipsaws of the market. After impulsing up, both started impulses down. 60min fully unwinded the impulse down (with a 3rd END) and then started a new one, but which was later reversed and it is currently in an up impulse. The 135min also started a nested impulse down after having a bearish retrace (BR) and an END of it’s initial down impulse by breaking below that END. However that nest was also reversed and after triggering a resistance level above, the price broke above and also 135min is impulsing up. Going forward it would be important to see if these impulses will unwind in a regular fashion (with BR and ENDs) or will be reversed. The normal expectation is for a regular unwind, but the market has whipsawed resistances and supports a lot lately, so it wouldn’t be surprising if also these impulses are reversed.

60&135min Cycles

60&135min Cycles

MCM Newsletter – Outlook for Week 8 – 12 Feb

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral/down
Short-Term Trend (60min&135min): neutral

Details:
The weekly cycles are oscillating, with the last triggered level being support (at 1804 ES and 15364 YM). This means that although the trend is neutral, the normal expectation is for an up movement, until a new resistance level is triggered. Breaking the support level before a resistance level is triggered would be very bearish since that would start an impulse down. Therefore watching for reaction at the mentioned levels is critical in case the market moves lower.

Weekly Cycles

Weekly Cycles

On the daily cyclesYM is in a confirmed the down impulse while ES is whipsawing its support level after spiking below it initially, but managing to recover and bounce back over it. Interesting is that YM started to show Lower Risk Entries (LRE) for shorts (the red rectangles at the top of the bars) on all spikes above it’s Moving Average (MA). We are still on the look-out for a bearish retrace (BR) resistance to trigger on YM since that would act as the line in the sand going forward. As mentioned before, the normal expectation is for YM to unwind its impulse down in similar manner as the previous one (highlighted on the chart), meaning a BR resistance will likely trigger another wave of downside.

Daily Cycles

Daily Cycles

We were mentioning in the previous newsletter that the 60 and 135min cycles both confirmed up impulses. The 60min actually had a nice initial bullish retrace (BR) and an END, while the 2nd support triggered (which coincided with support triggering on 135min too) was broken down and impulses down actually started on both cycles. Those impulses were reversed though and currently we had a full unwind of the up impulse on 60min (3rd END occurred at 1914.75) while 135min had a 2nd END and might need also a 3rd END resistance higher. At the moment both have supports triggered in more or less the same area (1872-1873) which were slightly whipsawed. These levels are critical to watch near term since if the market head down we might start down impulses again, which would be bearish. However if the market manages to hold these levels and move up, the next resistance level triggered will be important since it will likely be a 3rd END on 135min and that usually triggers a strong reaction (which in this case would be expected to be a down movement).

60 & 135 min Cycles

60 & 135 min Cycles