MCM Newsletter – Outlook for the Week 20-24 February

The market continued its bullish character from the end of the previous week and broke out quite convincingly to the upside despite a zone of strong resistance.

As a result, the weekly cycles moved further above their resistance levels in what can be considered a break-out. ES just confirmed the up impulse (by having the mcm-MA moving above the break-out level), while YM despite needing more work before confirming an impulse, has moved significantly above the resistance level as well. These new up impulses on the weekly cycles are significant and change the intermediate term picture to bullish.

Weekly Cycles

Same thing is confirmed by the daily cycles. Both ES and YM are in confirmed (nested) up impulses.

Daily Cycles

On the 288 and 480min cycles    
You need to be authorized or upgrade to see this content. Please go to http://mcm-ct.com/membership-signup-dev-2/ to sign up.

MCM Newsletter – Outlook for Week 22 – 26 Aug

Executive Summary:
Main Trend (weekly): neutral
Intermediate Trend (daily): up
Short-Term Trend (480&288min): up
Details:
The weekly cycles are in an interesting position, as ES is close to confirming the up impulse, while YM is still a few weeks away from that. The mcm-MA on ES is now crossing the resistance level and even if YM is under-performing, both markets have moved enough above the resistance levels to rule out a mere spike above. If it would not be for the structure of the daily cycles, a prolonged up move as a result of this impulse would be normal expectation.

Weekly Cycles

Weekly Cycles

On the daily cycles, we had a significant event last week. YM had triggered a new support level just below the 2nd END resistance and on Friday, it triggered the 3rd END resistance to that support, marking the complete unwind of the massive up impulse which started close to 16,500. That is a very important level and because it is a 3rd END resistance, it has lower than normal odds of being broken above. The up energy of this impulse fully dissipated at this level, and the normal expectation is for a move in the opposite direction (i.e.down). ES is in a slightly different position since it never triggered the 3rd support and END higher, as the market never moved back below the 2nd END resistance after moving slightly above it. However the market never moved significantly above that resistance level, so coming back below it would not be surprising. The terminal status of the up move on the daily is what makes unlikely the start of a true impulse on weekly, despite the near confirmation on ES. However, if the daily cycles manage to break the resistance levels against the odds and start a nested impulse up, that would be a very big warning that a new big up move is coming, since we would have impulses up on daily and on weekly. So how the daily cycles shape up becomes key for defining the intermediate term direction.

Daily Cycles

Daily Cycles

480 and 288min cycles are still in the area of the plateau which we were mentioning last week, although the market did manage to make a 2-3 points higher high. 288 is in the unwind phase of a new up impulse and already had a 2nd END resistance very close the the highs. 480min had a BR support very close to the break-out level of the nested impulse up, which gave it higher than normal odds of holding; which it has done so far and we are looking at the next END resistance (higher) to mark a potentially significant turning point.

288&480min Cycles

288&480min Cycles

Major Support Dead Ahead – If Broken Support is Virtually Nonexistent Till the 1600’s

MSP, as usual, has done a great job of timing out the market cycles. The next inflection point is projected for around the 22nd of January. Meanwhile we have reverted to BEAR MARKET microstructure on the short term MSP additionally we have a critical set of supports coming up with thin zones directly below them. If these supports break near-term the event brings the potential for lower levels to be reached within the MSP inflection point.

Emotionally, the market is NOT in good shape and lots of cash has been extracted from the market on selling days and this has NOT been replenished on buying days. These are consequences of unbridled gambling by the FED directed global central bank cartel system

No matter the case, we remain extra cautious or short-biased bounces in the near-term till we have the potential for a larger inflection point.

As per the "mcm Real January Effect" we have been tracking since the first two days for the year and confirmed with the first-week market structure and then finally this weeks market structure some pronounced negative company in terms the "Real January Effect" outcomes which presently suggest a interim low in March with yearly lows in October or November. Potential Intra year drawdown is up to 45% if the market confirms these market structures with its January close.

Careful out there.

mcm MSP Projection as Published in Aug/Sept

mcm MSP Projection as Published in Aug/Sept

mcm- MSP Proejctions Actual to Projection Comparison

mcm- MSP Projections Actual to Projection Comparison

S&P500 Levels chart

S&P500 Levels chart

S&P500 Historical Emotional Extremes chart

S&P500 Historical Emotional Extremes chart

mcm Accumulation Components Indexes

mcm Accumulation Components Indexes

 

Immediate Future is NOT favorable for BULLS

This is a quick post to show a variety of MSP charts. All of which point to the immediate area and immediate timing is the beginning of an episode that lasts for several months. There course will be bounces in this decline from our present inflection point. Towards the end of January and towards the end of February or two points to look for bounces in a larger rally in March. Meanwhile, back to business at hand, below are charts of the current detail and close up view for the S&P500, also some overview that shows a preponderance of probability also converging presently as per totally independently calculated MSP for the DAX and Russell 2000.

Happy New Year and wishing you a healthy, happy, safe and prosperous 2016.

Daily/Weekly MSP Close up for S&P500

Daily/Weekly MSP Close up for S&P500

Daily/Weekly MSP German DAX

Daily/Weekly MSP German DAX

Daily/Weekly MSP Russell 2000

Daily/Weekly MSP Russell 2000

 

Happy Holidays & Market Projection Update

We wish you a Merry Christmas and happy holidays and a successful 2016 to come. 2015 has been an interesting year for MCM and we will do a review of our successes and failures things with improved, and weaknesses and strengths. Overall, as can be seen from the chart below market structure projection has been one of the strengths, and it has successfully projected the market out for many months now. These projections have not changed as they are rendered in the charts and remain relevant to market behavior. Weakness projected into [5] bounced as expected and began the latter part of a Santa Claus rally. The strength of the drop that occurred last week did not fit into the resolution of the weekly projections. However, if you do look at the daily projections which are the white lines at the bottom the chart you can see the morning to morning weakness that showed up during those days. Again, these renderings have not changed and remain relevant. This coming week as a potential to be a pronounced decline. For the January effect for this year, the average closing gain for the year is -9% or so. While we may not reach -9% next week has the potential to take us significantly towards this direction and caution would be advisable. This is certainly NOT an options being presently seen in popularity on the internet as most Elliott wave and technical analysts are distracted with triangles which in this analyst's option are way too obvious and accepted to follow expectations easily.

S&P500 Daily and Weekly Market Structure Projections

S&P500 Daily and Weekly Market Structure Projections

Again, we wish you a very merry and safe Christmas and look forward to seeing you in the new year. Please come back to see our year-end review mentioned earlier in this post which will be posted soon.

Projections for Bounce Sometime Next Week in DAX

The DAX market has tracked MSP well and is looking for an interim balance into Christmas starting sometime next week. As has been posted throughout these pages by breaking below extremely strong capitulatory emotional selling extremes (X-Ticks) via eTickTools on a pervasive basis the markets triggered behavior unlike any that we have seen since before the August crash - putting it at potentially grave risk. IF NO BOUNCE OCCURS NEXT WEEK THEN THE IMPLICATIONS ARE DIRE. This has serious implications for the US markets as well as the DAX tends to lead the US equity markets and S&P500. It is, therefore, with the most concern and hope that we look for the markets to reward the low liquidity seasonality into Christmas with a win. However, the negatives are also pervasive in that NO analyst we see is really looking at anything other than upward triangles, falling wedges and wave 4's. We do not believe the equity market as a whole will be seeing new highs anytime soon - contrary to the very bullish general expectations it seems in the analyst space.

DAX Market Structrue Projection

DAX Market Structure Projection

Mario Draghi Panic – Gift to Shorts and Bulls – Downside Not Complete

Last week, in a desperate and disgraceful showing by Mario Draghi, the European Central Bank under delivered and then over delivered in the space of 24 hours. Draghi admitted as much in his subsequent interview. Essentially admitting that his announcement of unlimited stimulus was in response to market weakness.

The market appears to want to gap up this Sunday, which is a contrary and signal it is important to understand that latent strength on a Sunday gap up is more of a bearish sign than a bullish sign if it occurs.

S&P500 Market Structure {Projection

S&P500 Market Structure {ProjectionCentral Banker Panic

DAX Initial Down Move into January Begins

As with US equities. Mid-December is key for the DAX market as well. Downward pressures amid the seemingly omnipresent bullishness surrounding the Santa Claus rally have not only appeared for equities and bonds as we have projected on these pages, but also for the DAX. The DAX is likely entering a much stronger downplays than the US equity markets in that initial phase appears to have kicked off, which will you yield to some sort of bounce towards the end of January. Downward pressures. Overall next year for the DAX appeared much stronger and persistent then for the US markets. In the meantime. As with the US markets they bounce into Christmas from the middle December likely. However, diverging from the US markets be aware that there is significant potential for a very weak last week of the year.

DAX Market Structure {Projection

DAX Market Structure {Projection

Treasury Projections – Tracked Almost Perfectly – Appears Things Are About to Get Ugly

Recently posted microstructure projections treasuries, which were right translated two and a half days. The direction and timing of tracked in stellar fashion and we are still looking at a decline in treasuries into mid-December. Key turn dates to watch come in around the 15th. One of the most interesting things that appears to be happening is is that the direction of treasuries and equities are syncing. People in general are not used to this relationship and expect that treasuries trade upwards when stocks trade downwards. It appears that the synced and correlated behavior between equities and treasuries may continue into next year as both suggest weakness into February. It is possible that as equities start to accelerate into the completion of a down move that is possible into February and March - that treasuries suddenly decorrelate and start trading inverse to stocks once again. This is an interesting trap and it is also something that we have seen repeatedly with these central banker distorted and manipulated markets. Disparate markets all of a sudden start trading due to liquidity or manipulation or imbalance in the same direction and then when liquidity stresses change start trading in the opposite directions. This is happened countless times with different currencies vs. different commodities in different equity risks just as investors get used to the relationship the relationship changes. This is something to watch for in the behavior of treasuries, which appear to be linked at this time and for the foreseeable future with the prices of equities.

US Bonds Market Structure {Projection

US Bonds Market Structure Projections 

Update on Bonds Turn Window

In response to a question about updated MSP on bonds, below is an MSP chart which represents the bond behavior is on target, and tracking. Probabilities would favor a turn near-term and it is important to watch the white daily line for daily direction opinion. With this line a series of days of weakness may show up as a drop but the goal of this is the only project the oscillation for each day from previous morning to the next morning - therefore we can see that there was upside bias into this morning which should lead to downward bias to tomorrow morning. Either way, it appears we are in an important area for bonds.

US Bonds Market Structure {Projection

US Bonds Market Structure {Projection