MCM Newsletter – Outlook for Week 8 – 12 Aug

Executive Summary:
- Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): neutral
Details:
The first 2 days of August were quite weak, the market going from a new ATH in ES around 2177, to head-faking a break-down of the range in which it had been stuck since mid July. The low was close to 2140 and from there the market proceeded to make a new ATH. Now ES looks close to confirming its up impulse on the weekly cycle, while YM is still far from that, having underperformed quite a bit. Directionality is still going up and will be important to see how it behaves once it meets the maximum value.

Weekly Cycles

Weekly Cycles

The daily cycles show the market slowing down once it reached the resistance in the form of a 2nd END. It even drifted a bit down from there, but this recent ramp is testing the resistance level once again on YM, while on ES it already spiked a bit above. Directionality almost made it to the lowest point so the next 1-2 days look important to see what it will do from there. The normal expectation is still for the resistances to hold and market to have a bigger correction before another bigger bounce.

Daily Cycles

Daily Cycles

The 480 and 288min cycles both completely unwinded the up impulses they had, with 288 having been oscillating for a while, while 480 having just recently triggered a 3rd END resistance. Both the last resistances on 288 and the 3rd END on 480 have been broken above and are close to confirm new up impulses. Given the 3rd END on 480, the odds are low that it will be broken through significantly, so a pull-back below it would be normal expectation. Considering that 60 and 135min both broke into big up impulses (not shown), if they start to unwind sideways, that would be an indication that the break-out above resistances on 288 and 480 will likely be short lived. If 288 and 480 manage to break out significantly though, that would mean another leg up is underway.

288&480min Cycles

288&480min Cycles

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