MCM Newsletter – Outlook for Week 28 Mar – 1 Apr

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral
Details:
Still no significant change to be reported in the weekly cycles. They are oscillating and although the market rested a bit after the relentless run up, this was not enough to trigger a resistance level. We are still looking closely to see when one will appear, as well as to see if the mcm-MA will turn green. If that happens this would invalide the 2 consecutive LRE (lower risk entries) for shorts and should be respected. Otherwise it would not be surprising if the market would act the same as it did close to the prior resistance level, when we also had 2 consecutive LRE for shorts which triggered earlier than the resistance level.

Weekly Cycles

Weekly Cycles

On the daily cycles, we have fully fledged up impulses ongoing. The pull-back from the last 2 trading days was not enough to trigger a bullish retrace (BR), so price could still go lower until one is triggered. However there is no clear indication that this is the market's intention and this is not only a shallow correction. Some signs are starting to appear - as the directionality tool on ES starting to turn back down, as well as the fact that the market stopped after overshooting the predictive pivot and returning back into its vicinity - but the way these develop in the next few days will be key to figuring out the near term direction.

Daily Cycles

Daily Cycles

The 480 and 288min cycles are still oscillating after having reversed yet another attempted up impulse. A new support level was triggered on 288min at 2012, which produced an immediate bounce. The 480 has support in the making at the same level, so this proves its significance. Going forward the normal expectation is for possible up movement until a new resistance level appears, although if the market revisits the recent low it would be critical to see if a possible impulse down would start.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 21 – 25 Mar

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

Details:
No significant change in the stance of the weekly cycles since previous week. They are still just oscillating, however the market managed to move above the levels at which the 2 consecutive LRE (lower risk entries) for shorts have been triggered and also the historically relevant level which we were signaling. It remains to be seen if this was just a spike or a real break-out. Next week it will be important to watch if the mcm-MA will turn green (bullish) thereby invalidating the 2 LRE for shorts and/or if a resistance level will trigger. As previously stated the reaction to that level will be key going forward, with a pull-back in the market after it appears being the normal expectation.

Weekly Cycles

Weekly Cycles

On the daily cycles, ES followed YM and confirmed its up impulse. The historical levels which we were pointing last time were overtaken and YM reached another (higher) one. With the impulses up established, there is nothing bearish about the daily cycles, although a pull-back to a level which would generate a bullish retrace (BR) would not be out of the question. As there is no clear indication on this chart at what level that pull-back could begin, for the near term direction we will need to look at the shorter time frame cycles.

Daily Cycles

Daily Cycles

The 480 and 288min cycles have been oscillating for a while and are now attempting up impulses after the market moved slightly above the last resistance level triggered (on both at 2027.50). The previous such attempt was reversed, so near term it is important to see if this one will be as well. Going forward the 2027.50 level is important to see which way the market will go. Breaking into a real up impulse on these time frames could signal that the impulse up on daily has further to go, while a reversal here back below the break-out level might signal that the pull-back could begin. Depending on how quickly a new support level will trigger on these cycles and reaction to that, of course.

288&480min Cycles

288&480min Cycles

MCM Newsletter – Outlook for Week 14 – 20 Mar

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

Details:
The weekly cycles are still just oscillating, and considering that the market has traveled quite a lot since the support triggered at 1804 ES and 15364 YM, we are now looking for a resistance level to trigger. That would signal the completion of this wave (i.e.the peak of the wave) and reaction there will be key, since breaking above it would start an impulse up. However the normal expectation would be for the market to move down from there until a new support level is triggered. Interesting is that both ES and YM triggered a 2nd Lower Risk Entry for shorts (LRE) in a row. Additionally both are coming to a historically relevant level, to which the market reacted many times in the past. That means the current area is important to watch for either a reversal or a break-through.

Weekly Cycles

Weekly Cycles

On the daily cycles, YM confirmed its up impulse, as the mcm-MA also moved above the break-out level. ES did not do that yet as the MA flat-lined and is now right at the break-out level. Same as on the weekly cycles, both YM and ES came into a relevant historical level. YM is close to breaking above that area (highlighted in the previous newsletter), while ES is now testing that exact level. Going forward it would be important to watch how the market reacts to these levels and also how the impulses will develop and if they will have a regular unwind with BR and ENDs.

Daily Cycles

Daily Cycles

The 480 and 288min cycles are both currently oscillating after 288min finished the unwind of its up impulse. The last levels triggered were support at 1977.25 and the market managed to hold and bounced after a brief spike below. Currently the normal expectation is for a resistance level to trigger and the market to move down from there until it finds a new support. Considering the oscillating nature, the direction of the next impulse will be important for defining the near-term direction.

480&288min Cycles

480&288min Cycles

MCM Newsletter – Outlook for Week 7 – 11 Mar

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): neutral
Short-Term Trend (480&288min): neutral
Not too many changes since we posted our interim newsletter. The market did manage to move higher from the resistances triggered on multiple timeframes, however the normal expectation is still for those resistances to hold and market to reverse back below them. If anyone missed it, here is the link: http://mcm-ct.com/blog/interim-newsletter-3rd-of-march/

Details:
The weekly cycles are still just 
oscillating, last signals being support triggered at 1804 ES and 15364 YM. However both ES and YM triggered a Lower Risk Entry for shorts (LRE). The LRE confirmed at the top of the bar, which was on Friday, and this points to that high as a potentially important high in the market.

Weekly Cycles

Weekly Cycles

On the daily cycles, both YM and ES triggered a resistance level, but which was spiked above by the relentless bounce.
The impulse up is NOT yet confirmed, as the mcm-MA is still below the break-out level, however it will likely confirm in the next few days, unless the market reverses. YM is coming into an area (shown at point 1) which has proved significant many times in the past both when coming into it from below as well as above (shown at point 2). Breaking above this area, could propel YM even higher. If the market reverses, the levels of the resistances (1944 on ES and 16516 on YM) are important to watch, to see how the market reacts to the back-test.

Daily Cycles

Daily Cycles

The 480 and 288min cycles both triggered resistances at 1984.75. The resistance on 288min is a 3rd END which is significant, since it signals the complete unwind of the up impulse. (note:we explained 3rd ENDs in our interim newsletter from 3rd of March). The market did manage to spike above those resistances, however it is interesting that on Friday we got 2 capitulation bars on 288min and the last one (which was also bigger) held and triggered a slight reversal. As mentioned before, the normal expectation is for the market to head back down below that 3rd END and quite possible move more significantly in the opposite direction.

480&288min Cycles

480&288min Cycles

In conclusion, the area indicated as significant by the cycles on multiple timeframes was spiked above, but not broken through significantly. Therefore we are still on the look-out for a potential reversal which is viewed as the normal expectation. That being said, if the market would manage to break through this area, despite the odds, that would be very significant and would need to be respected.

Interim Newsletter 3rd of March

This is an interim update, since there have been significant developments on the cycles.

The weekly cycles triggered a LRE (lower risk entry) for shorts (highlighted at point 1). As it can be seen, the previous LREs (both for shorts but also for longs) have been quite successful in indicating reversals. Only in very few occasions they have not been respected, so it is worth paying attention to them. The LRE will confirm on Friday after the close, so if the market makes a higher high in the mean time, the LRE will confirm higher. This points to the high of this week as a potentially important high in the market.

Weekly Cycles

Weekly Cycles

On the daily Cycles, the price broke out above resistance on both ES and YM, however the impulses up are not yet confirmed. And the market is coming into significant historical extreme levels (highlighted on the chart).

Daily Cycles

Daily Cycles

The 480 and 288min cycles both triggered resistances at 1984 (shown at point 1 on the chart). The resistance on 480min is a simple one, since this cycle is only oscillating, however the one on 288min is a 3rd END which is more significant, since it signals the complete unwind of the up impulse. 3rd ENDs, especially on the longer time frame cycles are very rarely broken above and turned into a nested impulse. They can be spiked above, like it happened on 480min (highlighted at point 2), but the spike was afterwards reversed and the market proceeded in the opposite direction with conviction.

480 & 288min Cycles

480 & 288min Cycles

The 60 and 135min Cycles also show significant levels. 60min broke into an up impulse at 1948 (point 1 on the chart), while 135min triggered a resistance 3rd END at 1980 (point 2 on the chart). Same as the 3rd END on 288min, it is unlikely that this resistance will be broken above for more than a spike, before reversing in the opposite direction.

60 & 1335min Cycles

60 & 1335min Cycles

In conclusion, many cycles show significant resistance in the 1980-1984 area. Considering that 2 cycles are showing a 3rd END resistances there, indicating the complete unwind of the up impulses, it looks like the upward thrust of the market is losing steam. The odds are that this area will not be broken significantly before the market reverses for a more visible correction. The LRE for shorts on the weekly cycles, which will confirm at the end of the week, is completing the picture, indicating that highs above the mentioned area are likely to be short lived and possibly mark an important short-term high. That being said, since the LRE can confirm higher and the resistance area could be spiked above, it is not a signal to go short immediately, but rather to be on the look-out for a potential reversal.