MCM Newsletter – Outlook for Week 12-16 of June

The market moved mostly sideways (with a light down bias) last week, before putting in some fireworks on Friday. The action on the last trading day of the week deserves more careful analysis, as the market made a new ATH at the opening of the session, but which was then strongly sold off with a 30+ points decline, before bouncing back in the last hour before the close. This type of action, with a strong and fast reversal after a new high would normally point to at least some kind of short-term top, corresponding to a 5th wave in EWT. Currently the bear (EWT) options are not obvious, and this apparent top might be very short lived and be overtaken soon, but it just might be something more. 2398 is the first level to watch for an overlap on the way down.

Weekly cycles didn’t change much, except the directionality line on YM also started to move up like we were expecting last week.

Weekly Cycles

The daily cycles are still above the resistance levels, but didn’t significantly breakout just yet. As the market moved quite near them on the lows from Friday, this can qualify as a back-test, so what the market does next week will be important for the intermediate term also. If it holds the lows and bounces, then the breakout over resistances might become another up impulse. If the market breaks below the resistance levels, then it means the initial breakout was just an overshoot and more bearish resolutions are possible.

Daily Cycles

The 288 and 480min cycles    
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