Exceptional Day and Exceptional Times

Today was filled with outstanding eTickTools triggers, market impulses and emotions. Market eMotions are running at 78% above normal and  we got one x-tick after the other today for exceptional trading. quite amazing really. The changes rolled out and techniques discussed this weekend were extremely useful in trading crash oriented markets. So, on that front, things are quite outstanding.

However, on the market front, we felt that an update of the mcm Smart Money Indexes was in order. There is no shortage of jaw-dropping action represented in these indexes. For all the central banker jawboning, they really have "no real commitment" and are willing to let the people they claim to serve, endure unbelievable hardship. China has all but given up with their ruse and is actively  bankrupting everyone that it can find in order to support the "central planner panacea that all goes back ultimately to the Fed" and which ultimately goes back to theBank of England.

The only account balances that look any ok over the last few years are manipulation accounts (paper accounts of the central banks). Reality is that transactible mechanisms for these cartel members are fast declining, as is cooperation. The net worth and equity of the central banks globally is working hard to press ultimately into negative territory. Cooperation is declining because positive equity and are now moving towards negative equity - money printing in this respect is irrelevant. Though it is imaginable that if you, in a similar situation as the central banks,  could make cooperation aramgements with Prada to trade over-prices and senseless objects dejour with them while you have the perception od viability and they are desperate to sell them. However, if a sustainted period where you and Prada go into negative equity, their inclination to sell is hampered by their inability to do business just as yours would be. So, to go to Prada to spend $100,000 on a bag or sunglasses with -$1,000,000 in the account from which you plan on paying the bill with just an agreement of cooperation with an insolvent Prada who can no longer make, locate or deliver the object you seek is likely to not be a long-lasting venture. Initially, Prada may give try to come up with some terms for them and you to record the sale on their balancesheet, but very soon the mat in front of the Prada store for you and Prada would be gone. So much is similar for a central banker with such decrepit math skills.

The mcm Smart Money Indexes demonstrate clearly that markets have only just begun this move. Many traders may be feeling left out or way too left in. However, the implications are traders resentful of not having closed longs at higher prices are goign to end up quite  a bit more resentful in short order and those who feel like they missed the short of a life time - will soon if they do not focus on the setups that are only JUST BEGINNING. The market move has barely started is not anywhere near complete by all the measures we can see, In the near-term we still anticipate, via MSP data, some strength emerging this week into week 1 of September followed by decline and then strength into the week of the 21st followed by what can likely be a larger cash than the current down move - unless the arrogance of central banker meets cooperation and commitment on a massive scale of course -(which seems unlikely). So, to the charts - further explanation not necessary:

August 25th, 2015 mcm Smart Money Indexes Update

August 25th, 2015 mcm Smart Money Indexes Update

'Building Pretend Markets Not for the Good of the People"
- your friendly neighborhood central banker

From the perspective of a criminal mind, the screen-capture of the Bank of England website below is disturbing on many levels. Firstly, central banks, of all things, should NOT be focused on "BUILDING ANY MARKETS" they should be focused on maintaining the sanctity of the currency and the banking/financial system. It is absolutely stunning that they would admit, in such heavy-handed language, to "BUILDING MARKETS". Secondly, IF one were a large institution or firm of any kind, the choice of words used by BOE implies an objective that just does not fit with an authentic of organic venture. In fact, it implies an effort to convince of something in slight of hand fashion. To sell a scheme - a perspective. Any self-respecting firm would most certainly use any other combination of words than those chosen by BOE: "Building modern markets for a modern world" or "Building Innovative, Advanced  and Safe Markets for the World" come to mind as more of the line of thinking that a normal, authentic non-criminal enterprise might use.

However, a cult leader and or a criminal mind would certainly go through the greatest amount of effort to describe something in grossly deceptive fashion, by using the obvious and simplistic approach of using the very opposite words really apply. And this in a vein attempt to distance from the real agenda or implications. Normally such a technique does not work well or long...hence the word "REAL" and the word "GOOD" must clearly be inverted in the BOE usage, The real operation being undertaken by the BOE is more likely of descibed with the use of  "FAKE" and "BAD" instead. The gaul of this public facing message in these times is truely representative of the thinking en-masse of the central planner mindset - arrogant beyond belief and decpetive beyond reason.

When viewing the mcm Smart Money Index and Gap Index above, consider the implications of the below in understanding what is really occurring.

Central Banks Bravado and Arrogance is so complete that they are not embarrassed to virtually admit the truth

Central Banks Bravado and Arrogance is so complete that they are not embarrassed to virtually admit the truth

1825 S&P500 Level is Critical – Below it is No eMotional Support Till 1640

This post is in no way is suggesting that 1640 gets attention presently, but if 1820 breaches there is a high likelihood that a fairly direct test of 1640 over time would occur.

Larger Picture eTickTools Historical Emotional Extremes

Larger Picture eTickTools Historical Emotional Extremes

Market Flux Capacitor in Overdrive – Crash Potential and Techniques to Trade One

Last week we posted a definitive warning that something was aberrant and dangerous in this post: Market consciousnesses running through a flux capacitor. MSP is suggesting a bounce to an early September week one peak. While this remains the highest probability given that DAX and Eurostoxx both show reversal windows on weekly MSP starting this week, these are unprecedented times and as the example in the referenced post states: The market not following its metronome or market structure is very similar to hitting the brake in an automobile with the reaction of accelerating rather than slowing...things are clearly aberrant for what could be a variety of reasons - all of which need to be taken very seriously. A car should slow with a depression fo the brake and similarly the market should slow and react when it reaches its market structure metronome let alone support as in the 2044 area mentioned extensively last week. All reasonable expectations argued for, at the least, a short few day pause or test there, the overrunning of the infection forces, similarly to the eTickTools concept, suggests that the professionals professional was getting run over. Either way I am quite sure that there are a lot of people wishing they traded aggressively to sell a dangerous setup and there are quite a lot more people who are frantic about having bought all the way down. The approach for mcm is, was and continues to be since our post about taking a trading break as opposed to getting blindsided by low probability and risky setups, that the highest probability trades are yet to come and occur in September. That is still the case, a bounce in week 1 of September will likely be at the least a high probability reversal point and a second one towards September 21st. In all of the trading systems we have authored, a characteristic of any market turn is the highest opportunity is NOT when the turn occurs and the breakdown appears but after - and that is our calm and considered assessment presently too. These systems rarely trade the actual turn but rather focus on harvesting the subsequent larger move. We feel that if traders approach this market attempting to harvest this move aggressively - especially without the proper tools, funds are likely to be depleted by the time the real tradable market reveals. For these reasons, we emphasized the danger to all and still advise a high degree of caution.

Meantime, the markets are in an intense state of acceleration with the brake pedal fully depressed (not to mention parking brake on) that we felt it important to share some thoughts and setups to trade a crashing market. When the vehicle just will not stop it can be the ground that is moving, and we would be remiss to NOT further examine this subject. So, to make things easier we added some features to the eTickTools analytics toolset and want to take the time to discuss out methods regarding our cycle oscillation toolset. We feel that refocusing on these tools can help to do exactly what they were designed to do, assist in retaining clarity and consistency in all market conditions but especially in powerful momentum markets such as explosive up or down crashes. The objective is to locate risk and rewards inflection points that retain a reasonable and definable risk reward with an understanding of the market framework and psychology. Additionally, the goal is to retain a significantly higher than normal probability.

Below are charts of the additions to eTickTools. Among them, we have sped up the chart streaming, added the historical extreme background support and resistance lines in such a way as to require a minimum amount of cpu as possible. Additionally, we wanted to emphasize the use of Accumulation Index to help determine what market psychology is being conveyed during a consolidation market behavior or near inflection points. Examples are below.

eTickTools Additions

eTickTools Additions

eTickTools Additions Detail

eTickTools Additions Detail

The cycle oscillation toolset are not technically a part of eTickTools, however, a lot of learning has come from them and some similar concepts apply which is why we added the mcm moving average to the eTickTools charts. We wanted to share and discuss a few details regarding using these tools especially during non-cash hours to help identify impulsive moves. The interesting thing about cyclical oscillations, even on short term charts is that they do not act as high-speed signals that need to chop you up...but when used properly they provide insight into market structures that help orient the mindset of the market - for example impulsive and cyclic/counter-trend oscillations. Below are charts that go into more detail.

Identifying Impulses Down

Identifying Impulses Down

Identifying Impulses Up

Identifying Impulses Up

Identifying Impulses Down Overview Chart

Identifying Impulses Down Overview Chart

The Dividing Line – The Struggle is Struggling

The annual dividing line. The line in the sand. The measure of the market. The Zen of market consciousness. If one follows our research on the real January Effect - then this study will make a lot of sense. The market consciousness is focused on this line when we stuggle at it in a consolidation pattern - such as a downward sloping pullback - it is bullish and can be QUITE SO. When we struggle with it and its upwards sloping in a pattern that fits something like an ending diagonal or rising wedge - well, a picture is worth a thousand words.

S&P500 Cash Index Annual Dividing Line

S&P500 Cash Index Dividing Line [This is a very large image we recommend zooming to max widow size]

Smart Money Continues to Vacate the Building & Low Liquidity Ramps Reign

Not much can be said about the chart below other than it is disturbing and most certainly not something that any central banker is willing to talk about - publically at least.

Market participation continues to breakdown and wither. This is not good - not good at all.

July 20, 2015 - mcm Smart Money Index

July 20, 2015 - mcm Smart Money Index

The Eye of the Storm – Smart Money Index Obliterated

We make it a habit to monitor our proprietary mcm Indexes. One of them is the mcm Smart Money Index. Regular readers will note that our previous comments have demonstrated that the Smart Money Index as it is theorized and calculated in popular form is deceptive and mostly useless. We have revised the index to accommodate for functional inaccuracy between the theory and the real world. So, the mcm Smart Money Index shows meaningful data for a real-world situation and condition.

Based on discussions in the mcm lounge I wanted to take a look at the mcm Smart Money Index and mcm Indexes and the message was and is not good. It is unbelievable how stretched things are, not to mention how disturbing. There is absolutely NO performance or VERY NEGATIVE PERFORMANCE.

I think these indexes represent the quality of life, stress and conflict that people are dealing with in their lives. If things are less stressful and more positive or growing, the indexes show harmony and balance towards expansion and conversely when the opposite. If these charts are any guide, people, generally, must be profoundly unhappy as a whole.

I want to restate that productive capacity in the world has been coopted - overwhelmed by the agenda of credit expansion at any costs. Thus, once productive people in China (and all over the world) are driven towards unproductive pursuits (and in which they have no particular aptitude or training) such as trading and chasing IPO's while simultaneously borrowing vast sums on margin. Worse, their activities, are not productive for an economy, innovation or a person from the outset. But, more, the results, in the end, are totally negative - for people, the economy, their families and their friends. This is a disease, and it is spreading everywhere and to many people who do not deserve it or ever thought such a conflict could overwhelm them.

What is happening when you look at these charts is you see various indexes that represent different classes and objectives of traders/market participants. Over the last 1.5 years only ONE of them has been marking money - the low liquidity overnight session. When one looks further out its easy to see that investors in many of these indexes would be currently sporting account balances near the 2009 lows at the very same time that the markets are up 300%. This is a crazy concept and indicative of just how stressed the markets and participants are.

I recommend reading: Drama in the Market Seas - A Revealing Look via the mcm Market Indexes

 July 2nd, 2015  mcm Indexes

July 2nd, 2015 mcm Indexes

Below is the chart from Jun 18th...and markets have had a dramatic deterioration in quite a short time.

June 18th, 2015  mcm Indexes

June 18th, 2015 mcm Indexes

Market Showing Dramatic Divergence Between Price, Actions & Emotions

Why should we expect the markets to make sense. They clearly rarely do. But that is what both makes them predictable and perplexing. The chart below is showing the mcm Accumulation indexes. Accumulation Index has been unusually strong (top cyan line) while prices have dropped 20 ES points. Additionally only $2.9 billion has been cashed out of US equities which is comparatively little considering the drop. Normally this number should be something like $12 to 15 billion by now. Not only that Trade tickets executing on the Ask or above are 45% greater than trade tickets executing on the bid or below. While the market is down 20 points!!!

Can someone please tell me the name of the central bank panic-buying?

July 2nd, 2015 Intraday Accumulation Index Components Update

July 2nd, 2015 Intraday Accumulation Index Components Update

Reminds me of IMAGINARY NUMBERS!

Weekly/Daily MSP Probabilities Update

Below is the updated daily weekly MSP probability bias chart. We are tracking exceptionally well as has been the case for the whole year. A period of sustained down bias appears directly ahead. Top is likely in on a probability basis for a while or there is a moderate possibility that an upward push early next week could be better test. Market is highly precarious.

Keep in mind also that bias towards WEAK "day session performance" increases on Friday's and Monday's presently. Therefore, any overnight price progress, at best, is likely to run into sellers during the day session hours. (Note: each vertical line on the chart below represents the AM session open around 9:00 AM - not the 4:00 PM close)

June 18th, 2015 Daily & Weekly Market Structure Projections

June 18th, 2015 Daily & Weekly Market Structure Projections

Lots of talk about another Hindenburg Omen yesterday. The mcm Hindenburg Omen did not trigger and though another standard Hindenburg occurred, it's anecdotal at this moment. Below is an update of the mcm Smart Money Index and also the mcm Market Close, mcm Market Open, mcm Gap and mcm Day Session Indexes. All except the mcm Day Session index have continued to weaken - some dramatically. mcm Gap Index has achieved its blow off as markets attempted to levitate prices via the overnight session, but that has begun failing now too. Very precarious picture putting it nicely.

June 18th, 2015  mcm Indexes

June 18th, 2015 mcm Indexes