MCM Newsletter – Outlook for Week 11 – 15 July

Executive Summary:
Main Trend (weekly): neutral
- Intermediate Trend (daily): up
Short-Term Trend (480&288min): up
Details:
As we were mentioning previously, on the weekly cycles we had 2 consecutive LRE (lower risk entry) for longs which the market respected, rallying strongly. The resistance levels are currently being tested, with ES managing to spike above once again, while YM stopped exactly at that level. The directionality tool kept moving down however some of its components started to bounce. The normal expectation is unchanged, namely for the resistances levels to hold and the market to have a bigger correction from this general area. The structure of the daily cycles adds weight to this assumption, however with the market testing the ATHs, next week looks decisive for a decision to be made one way or another.

Weekly Cycles

Weekly Cycles

The daily cycles are continuing to unwind the up impulse. After the Brexit vote, the market spiked below the 2nd BR (bullish retrace) support, however the market rallied strongly from there and made a higher high vs the day before the vote. From a cycle perspective the price is in an area in which a 2nd END resistance could trigger basically at any time. Once that happens, that could mark the end of the impulse, which is suggesting that the up-driving energy is close to fully dissipating. That is not favorable to continuing upside, although the exact turning point has a bit of room. The shorter term cycles should provide early clues for that.

Daily Cycles

Daily Cycles

The 480 and 288min cycles show a “zoomed-in” version of the post Brexit action. After marking the first low with an END and 2nd END support and having those supports spiked below by the lower low, the ensuing rally was very powerful. Resistances were triggered, but unable to contain the rally and both started impulses up. 288min reversed that impulse up and triggered a 3rd END support lower, then another resistance higher, which was broken as well by the relentless upside. 480 managed to keep its initial up impulse intact and triggered an BR (bullish retrace). The next important level to watch would be an END resistance on 480, which would likely mark the unwind of the up impulse.

288&480min Cycles

288&480min Cycles

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