MCM Newsletter – Outlook for Week 18 – 22 July

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up
Details:
The market continued to rally, making new all time highs and now both ES and YM moved above their weekly cycle resistance. The price traveled enough upwards to put the scenario of a potential break-out on the table. It doesn’t mean that this will happen, but it does mean that if the market travels back down, a back-test of the resistance level will be very important to watch, since it could act now support. The directionality tool never made it to the lowest point and started to bounce and its behavior is also important to watch going forward.

Weekly Cycles

Weekly Cycles

The daily cycles are still in the unwind phase of the up impulse. We were mentioning last week that the exact turning point and trigger of the 2nd END resistance has some room, however the market moved a lot higher which makes the form of this 2nd unwind less than ideal. Once the 2nd END triggers though, that would be an important line in the sand and potential turning point.

Daily Cycles

Daily Cycles

The 480 and 288min cycles show the relentless upward action in more detail. 288 is in an up impulse which still needs an unwind phase, while 480 unwinded its up impulse with an END resistance. That level was spiked above, however the market looks close to coming back down below it. Going forward the normal expectation is for some down movement, until support levels in the form of a bullish retrace (BR) will trigger (potentially on both). Those levels will be important to watch for reaction. The directionality tool is also important, with the one on 288 getting close to its lowest level. Behavior there will be telling for the near term direction.

288&480min Cycles

288&480min Cycles

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