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MCM Newsletter – Outlook for Week 24-28 of July

The market continued the bullish momentum and pushed to new ATHs after a brief pull-back into mid week. The high of the week was reached on Thursday, with Friday seeing a retreat from there. Like we were saying last week - the bulls are favorites and in this environment it’s very hard (and risky) to call a top. The near term EWT option the bears still have is for this to be a B wave (off the low at 2405). And if that’s what this is, then there are enough waves for it to be complete. Of course, there are also a lot of bullish options out there, so the B wave is far from being favorite. That would change with an overlap of 2440, but that seems very far away right now.

No new development on the weekly cycles. Directionality is starting to creep back up, which would be very bullish if it made it to the maximum level.

Weekly Cycles

The daily cycles triggered corresponding resistances to the supports of 2 weeks ago. ES managed to spike slightly above that, while YM has respected it so far. The normal expectation now is for the market to retreat from the said resistances. In fact YM looks to be doing just that with directionality tilting lower and not being able to push past resistance.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 17-21 of June

The market it making history again making fresh ATH and closing very near them on Friday. It seems that the 3 waves decline we were mentioning last week (with the low at 2405) was all that it was, since we held that low and made new highs. Of course this can still be a B wave of a flat and if the market were to stop close to where we are and head down strongly, it would add weight to that scenario. But this option has to be viewed as the underdog now, so bulls are yet again favorites.

Nothing new to report on the weekly cycles. Directionality is worth keeping an eye on for early clues. We mentioned that it’s behavior was not bullish, but given this rally, that might change.

Weekly Cycles

The daily cycles provided an early warning to this ramp. Both ES and YM had supports triggered. ES canceled the nested up impulse, by having support trigger just below the previously broken resistance. While YM confirmed the up impulse and had a bullish retrace (BR) support. Both those supports held and were pointing up, at least until corresponding resistance level trigger.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 10-14 of June

We are back after a 2-weeks summer holidays and it seems things got more interesting in the market with the volatility starting to pick up. The market made yet another ATH on 06/19 and then pulled back in a more volatile manner around 50 points. There is nothing to write home about for bears just yet though, since this is just a 3 waves decline so far. Therefore the low from 06/29 sitting at 2405 is important from an EWT (and bears) stand point.

No major signal on the weekly cycles expect for directionality which had an interesting development. It had a failed bounce off the lows, meaning it didn’t quite make it to the maximum level before heading down again. Normally that is quite bearish, so bulls need to take that as a warning for the near term. Just as a reminder, these cycles are still in up impulses, so the normal expectation is for the first more significant pull-back to be bought, as it should trigger a bullish retrace (BR) support which would lead to another bounce.

Weekly Cycles

The daily cycles are in a make or break position for the near term. ES didn’t quite make it to confirm a new nested up impulse, while YM did, but just barely. What happens in the next 1-2 weeks is important for how these cycles will shape up. If bulls can push here, then another leg up is to be expected, while the bears would hope to manage to turn this below the resistance levels to avoid that. In any case the said levels are important to watch.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 19-23 of June

The market pulled the old “W” pattern last week, making a low on Monday, then bouncing back up to test the ATH (which it missed by 3 points), then moving in lower again to (barely) take out Monday’s low before bouncing once more. From an EWT standpoint this sideways action might be a wave 4, which means the bull count is still alive and well and still the favorite. That continues to be the case until the market will overlap the 2398-2402 area (depending on which high you consider the top of nested wave 1).

Same as for quite a while now, the weekly cycles do not show any significant change. However it is interesting to note some aspects. Namely, the mcm-MA on these cycles provided support several times when it was tested from above. Also, both YM and ES are in up impulses which are now firmly established so would normally need a regular unwind, with a bullish support (BR) and corresponding END resistance to dissipate the up energy.

Weekly Cycles

The daily cycles are also in nested up impulses and recently broke yet again above resistance, breakout which would soon turn into another nested up impulse, unless the market reverses strongly. In fact YM will confirm in the next few days, as the mcm-MA is now crossing over resistance.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 12-16 of June

The market moved mostly sideways (with a light down bias) last week, before putting in some fireworks on Friday. The action on the last trading day of the week deserves more careful analysis, as the market made a new ATH at the opening of the session, but which was then strongly sold off with a 30+ points decline, before bouncing back in the last hour before the close. This type of action, with a strong and fast reversal after a new high would normally point to at least some kind of short-term top, corresponding to a 5th wave in EWT. Currently the bear (EWT) options are not obvious, and this apparent top might be very short lived and be overtaken soon, but it just might be something more. 2398 is the first level to watch for an overlap on the way down.

Weekly cycles didn’t change much, except the directionality line on YM also started to move up like we were expecting last week.

Weekly Cycles

The daily cycles are still above the resistance levels, but didn’t significantly breakout just yet. As the market moved quite near them on the lows from Friday, this can qualify as a back-test, so what the market does next week will be important for the intermediate term also. If it holds the lows and bounces, then the breakout over resistances might become another up impulse. If the market breaks below the resistance levels, then it means the initial breakout was just an overshoot and more bearish resolutions are possible.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 5-9 of June

In the previous newsletter we were warning that the action had nothing bearish in it and the EWT more bullish scenarios were becoming favorite. The market followed through last week and pushed even higher.

Weekly cycles saw a slight change in that directionality on ES finally moved off its lowest level. YM didn’t do that just yet, but will likely follow unless the market turns soon.

Weekly Cycles

The daily cycles triggered new resistances, but the market managed to break above them. The breakout is not significant just yet and may prove to be just a spike. But the further the market moves, the more likely the breakout becomes. The resistance levels are still important to watch, in case the market moves lower since if the back-test holds, that would be dangerous for bears.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 29 May -2 June

Last week saw the market push towards new highs. There was nothing bearish about the action, quite the opposite in fact, the market being able to push past resistances and into new ATHs. From an EWT stand-point the picture is becoming increasingly complicated. The more complex correction is still possible, albeit not favourite anymore. For this to happen the market would need to turn quite soon and avoid pushing significantly higher from here. The most obvious bullish scenario is for a nested wave up from the 2320 low, which would need the market to head higher in a steep manner (continuing the action of last week)

Weekly cycles are unchanged, with directionality still at the lowest level despite the bounce.  Once that moves, it would be a confirmation that the up move is really bullish.

Weekly Cycles

On the daily cycles we saw a support level trigger also on ES (following YM). The up impulses are continuing to unwind and the next resistance levels will be very important to watch for reaction, especially since it will be a 3rd END on ES, marking the completion of the impulse.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 22-26 of May

Last week saw the return of volatility to the market. After 2 days of consecutive new ATHs on Mon-Tue, the market saw a big down gap on Wed, which finished more than 40 points lower than the previous close. Next day we got a lower low, followed by a rebound which continued on Friday. Despite the more exciting action, we are still in the 2320-2400 chop zone, so the market is keeping its options open. From an EWT stand-point the more complex correction (started at the ATH from March 1st) scenario is gaining more weight because of the side-ways action. This would mean a flat is in the works, with wave A at the 2320 low and B either done at the recent ATH or needing a new minor high to finish. Then wave C down should follow with new lows (below 2320). Because of the overlap of 2370, the bullish scenario now became very bullish, because the only option still on the table is for a nested wave up (two series of 1-2 waves). This scenario is lower odds, though, at least at the moment because of the side-ways action.

Weekly cycles are unchanged, but directionality made it to the lowest level. That is not a bullish sign.

Weekly Cycles

The daily cycles held the test of resistances and moved lower and triggered some bullish signals at the lows. ES had 2 consecutive LRE (lower risk entries) for longs, while YM triggered a new support level. Those pointed up, but unless ES also triggers a new support level, it is still expected for the previous resistance to hold.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 8-12 of May

The market moved sideways to lower in the first 4 trading days last week, with Friday bringing a stronger effort from the bull side with a push which came very narrowly close to the ATH. Our EWT scenario is playing out quite well and this looks (so far) like the 3 wave move off the important low at 2320ish. Currently 2 main scenarios are on the table: this is part of a more complex correction started at the ATH (a B wave of a flat, as mentioned in the previous newsletter), OR the correction ended at the 2320ish low and this is part of an impulsive move up. Once the current minor wave ends the next correction will give us a clue, 2370 would be the level to watch as the overlap (or not) would add weight to one or the other scenario.
No change for the weekly cycles. Directionality is still moving lower and it almost made it to the lowest level.

Weekly Cycles

The daily cycles are now directly testing the resistance levels (the 2nd END on ES and the 1st END on YM). As mentioned in the previous newsletter, a minor new high is not excluded, however the normal expectation would be for the resistance levels to hold, which would fit better with the flat EWT scenario mentioned.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for the 1st Week of May

The market continued to move higher last week and did so more convincingly than the previous week. It opened on Monday with a gap up of more than 20 points and Tuesday saw another opening gap up, this time smaller (around 7 points). The high of the week came very close to the ATH, before the market retreated a bit in the last 2 trading sessions. Our preferred EWT scenario (bullish) played out, despite the initial chop which had us question the validity of this (presumed) 3rd wave. Now it looks like this wave up might need another high before finishing and the coming correction from there will be telling to see if this is indeed a bullish impulse up or not. As it looks right now and in accordance with our thoughts from the previous newsletter this doesn’t look like a “real” 3rd wave up, which has us thinking it might be part of a more complex correction which started at the ATH (potentially a B wave of a flat). But we will burn that bridge once we come to it.
Weekly cycles did not trigger any new signals. Directionality is still moving lower which is a sign that it is not time to sound the all clear for the bulls just yet.

Weekly Cycles

The daily cycles continue to unwind the up impulses. ES triggered a 2nd END resistance, while YM also triggered an END resistance level. This is a sign that the upward energy of these impulses is dissipating. Considering that this is already a nested up impulse (an impulse following another impulse), it is unlikely that the market will have enough strength to break above these resistances and create another nested impulse. That being said, a marginal new high is not excluded, but we do not expect the resistance levels to be broken above significantly.

Daily Cycles

The 288 and 480min cycles    
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