MCM Newsletter – Outlook for Week 25 Apr – 30 Apr

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral/up
Details:
Not too much to be said about the weekly cycles. The situation is pretty much the same as in the previous few weeks: the oscillation is ongoing and the resistance level did not trigger yet. The market is now in the area of the previous resistance level and also slightly above the predictive pivot, but so far there are no clear signs of a reversal (or resistance triggering).

Weekly Cycles

Weekly Cycles

On the daily cycles, the up impulses reached yet another historical extreme area. The directionality tool on YM turned down, bounced and now it is turning down yet again. That doesn’t mean that the market will turn immediately, but it does show that the up strength is weakening and we believe that the risk has shifted and long positions should be reduced or hedged. Once the market finally tops, the expectation is for a more significant pull-back to happen which would trigger a bullish retrace (BR). Reaction to that BR support would be important, the normal expectation being a bounce to an END resistance higher, which would signal the unwind of the up impulse.

Daily Cycles

Daily Cycles

The 480 and 288min cycles have oscillated for quite a while. Recently both managed to break out into up impulses, after the market broke resistances triggered at 2077.25 (point 1 on chart). The impulses never really established themselves though and came back to test the break-out level several times. On 288min, the most recent back-test triggered a bullish retrace (BR) at nearly the same level, which usually has higher odds of holding. The 480min did trigger a support level, however before this confirmed, the market traveled below the break-out level and so the support level confirmed below, invalidating the up impulse (point 2 on the chart). Considering the support triggered on both, the normal expectation is for the market to bounce until new resistance levels are triggered. However if the market breaks down through these levels, that would be a strong signal that an important short term top is in.

288&480min Cycles

288&480min Cycles

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