MCM Newsletter – Outlook for Week 25 – 29 Jan

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): down
Short-Term Trend (60min&135min): neutral/up

The weekly cycles are still just oscillating. The market moved significantly lower from resistances (sitting at 2110.5 ES and 17907 YM) and found a bottom in the area we were mentioning last week (highlighted on the chart), which held also on the previous 2 occasions. If the market holds up also this week, a support level might trigger which will then become an important level to watch if (or when) the downside resume.

Weekly 24.01.

Weekly Cycles

On the daily cycles, we were mentioning that YM broke its support level and confirmed the down impulse. Since it has moved significantly lower from there, YM could unwind the impulse in a similar manner to last impulse (highlighted at point 1 on the chart). If the market continues to bounce, the appearance of a bearish retrace (BR) level would be a warning sign that the bounce might be over. ES also broke below its support level (point 2 on the chart), however managed to rally back above it before confirming it (via the move of the mcm-MA below the broken support). If the market continues to move higher, we could get another resistance level (magenta line) trigger, from which we would expect the market to move lower until another support is triggered.

Daily Cycles

Daily Cycles

The 60 and 135min cycles show the context in which the actual low was put in last week. Previously both cycles had nested down impulses, the last of which fully unwinded with a 3rd END (can still be seen on 135min). Since that moment both were oscillating, while at the actual low, the 60min broke into another impulse down, but which was not confirmed also on 135min (point 1 on the chart). The attempted impulse down on 135min was reversed on the next bar after break-down and we can see at point 2 that after recuperating the level, it held the back-test. Towards the end of the week, the tables had turned and currently both are attempting impulses up (point 3 on the chart). 135min impulse up is confirmed, with 60min surely to follow in the absence of a rather direct drop below the break-out level (sitting at 1867.75 ES). These up impulses are a serious warning for bears, until the impulse is either reversed (still possible at this point) or unwinded.

60&135min Cycles

60&135min Cycles

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