MCM Newsletter – Outlook for last Week of 2016

Happy Holidays to everyone! The market action in the pre-holiday week was what one would expect. It looked like many participants decided to spend time shopping for presents instead of trading the market, which is why no real conviction was present to push the prices one way or another. The action was mainly sideways with the Friday close being 1 point away from Monday’s close. The higher lows and lower highs formations which we were mentioning last week are still intact and the wedge is getting smaller so resolution is expected shortly.
Considering the lack of direction, it is no surprise that there is nothing new to report on the weekly cycles. Market is still whipsawing the resistance level on ES, while YM is yet to trigger a resistance.

Weekly Cycles

No drastic change on the daily cycles either. The only notable change is that the directionality tool on both ES and YM started to move lower. It would be important to see if it makes it to the lowest level and how it reacts from there.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 19 – 23 Dec

Last week was a bit dull compared to the one 2 weeks ago, but the market was still able to make a new ATH on Tuesday the 13th. After that, the action was choppy and sideways, the market making higher lows and lower highs. That is typical for an EWT triangle formation, which would suggest it could be a 4th wave with another 5th needed to take us to ATHs again before a turn.
Coming back to the cycles, we had no new development on the weekly. The resistance triggered on ES was whipsawed, but the market couldn’t break above it with conviction and closed right in its vicinity. YM still didn’t trigger a resistance level, which is something to keep an eye on.

Weekly Cycles

The daily cycles are both in confirmed up impulses now. Normally we would expect them to have regular unwinds, meaning BRs and ENDs before they finish. Reaction to a triggered BR or to the break-out levels in case the market heads there directly, will be telling for the intermediate term direction. Of course right now there is no sign of a turn and the market could continue higher in the mean time. The directionality tool on YM is pegged at the highest level and is getting a bit long in the tooth for a pullback. That would also provide clues of a potential turn once it starts moving.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 12 – 16 Dec

After the brief pull-back from 2 weeks ago, last week saw the bulls come back with a vengeance. And they managed a week for the history books, the market closing higher every day in the past week, after opening with a gap up on Monday. Such a relentless push up brought many indicators into overbought territory, the question now being how long can the market stay this overbought before correcting.
The interesting thing is that the weekly cycles triggered a resistance level in the form of an END, which could mark the end of the up impulse. YM didn’t trigger a resistance yet, which could mean that the market can go slightly higher, but the normal expectation is still for the market to at least pause the upside here and start a correction.

Weekly Cycles

Weekly Cycles

The daily cycles decisively broke above resistances and YM is already in an impulse up. ES will confirm the up impulse shortly as well, which is a pretty big warning for shorts. The directionality tool on YM is pegged at the highest level and if it pulls back that would be a clue that a correction might start.

Daily Cycles

Daily Cycles

The 288 and 480min cycles are    
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Technical Lab Update For The Week Of December 4, 2016

Happy first part of December everyone.  We hope the kickoff to the holiday season has treated you all well thus far.  Expectations from the previous update are very much in line with what the market has given us up to this point which makes things markedly easier.  We've fleshed out the diagonal a bit more by applying the varying wave degrees.  What is the most obvious being the one we've been tracking as the preferred count over the past couple of months.  Cyan is the next higher degree which began from the 2011 lows and has the potential to be a complete structure with the double tap of the 1.618 extension up from the 2009 lows that our next higher degree magenta.  Please keep in mind that the present labeling at the 2114 highs is in no way a top call.  It is simply a place holder for an ongoing cataloging of structures which gives one the framework to trade around.  While the diagonal has met all requirements for a complete structure, there is still plenty of room for it to extend its formation in either time or price.

SPX

SPX

With that being said, we turn our focus back to seasonality which continues to look for weakness along with MSP into mid month before flipping modes back to a positive posture to coast out the remainder of the year.  We'll continue to focus on the more near term opportunities in the lounge as they arise.  Good luck this week and the best of holiday wishes to everyone.

DJIA Seasonality Composite

DJIA Seasonality Composite

MCM Newsletter – Outlook for Week 5 – 9 Dec

After the silent grind higher from 2 weeks ago, which had us question whether it was the calm before the storm, last week didn’t bring the storm just yet. But the market did retreat from the high registered the previous Friday. That high was breached though on Monday and Wednesday on ES and also on the cash index on Wednesday. That seems like a typical flat formation (for those EWT inclined), which would mean that at some point the market would need to take out the ATH once again.
Looking at the cycles the weekly still doesn’t show signs that a turn is in. The slight pullback we had last week was not enough to paint a resistance level on the weekly and it also didn’t change the directionality trend which is still going up.

Weekly Cycles

Weekly Cycles

The daily cycles registered an interesting development. A resistance level triggered also on ES which was more respected than the one which triggered on YM a while back. The market pulled back from there and found support at the mcm-MA. The directionality tool on ES started to move down also, while the one on YM is still at the maximum point. So there are signs that the market is approaching exhaustion, but for the exact turning point to be confirmed we need to look at the shorter timeframe cycles.

Daily Cycles

Daily Cycles

The 288 and 480min cycles show    
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