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MCM Newsletter – Outlook for Week of 9-13 October

The 1st week of October went to the bulls hands down. They managed a 5 green candles week, and a new ATH each day except Friday. As we have been saying for a while the bull nest off the low at 2418 is favorite and the market is acting as though that is playing out (this wave being an extended 3rd wave). That would mean that the “perfect world” EWT scenario would have us retrace back to the 2490 area after this wave is done and then push again to a new ATH for the final 5th wave of this sequence.
No change on the weekly cycles. The up impulse is ongoing and now also directionality is turning back up.

Weekly Cycles

On the daily cycles we now have new up impulses on both ES and YM. In case the next pullback triggers support in the form of a bullish retrace (BR) reaction to that signal would be important to watch.

Daily Cycles

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

New week, new ATH seems to be the current turn of events. After a brief pull-back on Monday, the bulls quickly got back in the game and pushed the market to new highs. They also finished the week in style at the highs. The pullback did not manage to overlap 2480, so from an EWT perspective the bull nest off the low at 2418 is doing well (and still favorite). It now looks like we have put in a 5 wave impulse off the low at 2428, so the (presumed) 3rd wave off the 2418. The bears are running out of near-term options as the apparent bull nest is unfolding and unless they manage a rather direct overlap of 2455, the bulls are still favorites.
No change on the weekly cycles. The up impulse is alive and well and no pullback was big enough to trigger a bullish retrace.

Weekly Cycles

On the daily cycles ES broke above resistance and held a back-test. And the up impulse also confirmed last week by having the mcm-MA also moving above resistance. That is bad news for bears. YM is now directly testing its resistance level so one last (slim) hope for the bears to turn this down in the near term.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 25-29 September

The action seemed to slow last week, the market making a minor new high slowly into Wednesday, then pulling back slightly. From an EWT perspective, the bulls are still favorites and if this is indeed setting up as a nested move up, it should finish around 2490 and resume the up move. In the bear camp 2480 would be an important overlap and if they manage that then things might go towards getting the bull nest out of the picture.
No change on the weekly cycles. But the rally didn't go unnoticed, as directionality started to bounce .

Weekly Cycles

On the daily cycles we are currently above the resistance on ES. The up impulse is not confirmed yet, but it will if the market continues to move up. YM triggered resistance at the high so it remains to be seen if it manages to push forward and break that as well or if this will turn things.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 18-22 September

The sideways action from two weeks ago was resolved last week in the same way we got used to in the last few years - up. Last week was certainly bullish, with 5 green daily candles and several new ATHs. Although the last 3 days saw the market only grinding up, the declines were very limited, so nothing to cheer on from the bear camp. From an EWT perspective, now that the market made new highs, the favorite is still the bull option, which looks like a nested move up from the low at 2417. Even if that will not turn into a nest and will prove to be only a bigger 3 waver, it still looks like it needs a bit more up. The bear option is that this turns out to be either the flat we were mentioning in last week’s newsletter or that this overlap is not a nest, but an ending diagonal. The latter will gain weight if the market heads down and overlaps 2480 before making 5 clear waves up off 2428.
No change on the weekly cycles. Directionality is still heading lower despite the upside from this week.

Weekly Cycles

The daily cycles are in an interesting place. ES broke above the resistance level and is close to confirming a new up impulse. That would be very bullish if it happens.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Last Week of August

Last week seemed uneventful compared to the previous 2 weeks. Monday made a new low, albeit minor, then bulls got back in the game by protecting that low with a big up day on Tuesday. Big is a relative term, as that was “only” a bit over 20 points, nothing like the 30+ we got used to recently. The rest of the week saw sideways movement inside Tuesday’s range, so we can definitely say that the week ended undecided. From an EWT perspective we have an overlap of the first wave off the ATH, so now we have clear levels to watch for the bull/bear scenarios. The low at 2417 is all important as breaking it would mean that a nested move lower has started, which would see us a lot lower before it finished. On the upside, 2475 is the level to beat for bulls to be out of the woods (at least for now) as this would seal in a likely a-b-c down from ATH, which would mean new highs should follow.
On the weekly cycles, the mcm-MA did provide support yet again on ES, as we were saying last week. It remains to be seen if it will continue to do so.

Weekly Cycles

The daily cycles both put in supports. ES triggered had already support at the lows from the initial drop off the ATH, while YM reversed it’s nested up impulse to put in a fresh support at this week’s lows. Interesting that directionality is still stuck at the lowest level, which is a warning the bulls need to do a bit more heavy lifting to get a more significant bounce going.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 21-25 August

Last week was very spectacular and continued with even higher volatility than 2 weeks ago. After gaping up and moving higher into Wednesday, Thursday was again a bad omen for the markets (just like 2 weeks ago) and saw a big 30+ points decline in a single day. The market did break the low from 2 weeks ago, which means that something (i.e.an impulse wave) did finish at the ATH, despite it’s strange shape. The retrace of the first move lower from the ATH was quite big (more than 70%) and so far this looks like only 3 waves from there, so we are still in no position to scream “the top is in”. The action was certainly very bearish with the market apparently restarting to take the stairs up and the elevator down, as 3 days of slow up action were reversed in a single day, which also saw the previous weeks’ lows taken out. So it’s worth noting this change in character. From an EWT stand point there are too many options on the table right now to make a clear call. If the market stops here or a bit lower (2410-2420 is important support), then it could be just an a-b-c down, with new ATH to follow. If this is indeed the start of something more bearish, then this wave should continue significantly lower. Monday’s action looks to be key for the intermediate trend.
On the weekly cycles, ES is testing the mcm-MA directly, so bulls may try to defend this level again.

Weekly Cycles

The daily cycles also are directly on the support levels. ES triggered support at the lows from 2 weeks ago and is now working on breaking below. While YM is back-testing the previously broken resistance level. Both indexes have consecutive LREs (lower risk entries) for longs.

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 14-18 August

Last week saw volatility come back with a vengeance. A new ATH was reached on Tuesday with a spike-like move, but that was immediately sold off hard. SPX lost more than 50 points from that high to the low registered 2 days later. Friday ended inconclusively but very close to that low and still in, what appears to be, a crash channel. That was for sure the best feast the bears had in a while, but from an EWT stand-point it is hard to scream “the top is in”. Because the last wave into the ATH was very choppy and full of overlaps, being difficult to file that off as an impulse. Which means the B wave (into the new ATH) option we were mentioning last week is still alive and well and that does not bode well for bears. If that is indeed what we are dealing with, after this (presumed C) wave is done a new thrust to the highs will follow. Of course, strange impulse waves have been known to happen, so I would not bet the farm we’ll make new highs, but if the market stops in this general area I would keep this option in mind. The more the market continues lower, the less odds for the flat and more weight to the scenario the top is in for a while.
No change on the weekly cycles. ES is getting close to the mcm-MA again, so it would be interesting to see if it will provide support again.

Weekly Cycles

The daily cycles are in an interesting place. ES broke back below resistance, while YM is still above and just met the mcm-MA, which seems to provide support. The up impulse is confirmed on YM, but not on ES, which is an interesting divergence. We do have a fresh new LRE (lower risk entry) for longs on ES which is also pointing up (and in favor of the EWT flat scenario).

Daily Cycles

The 288 and 480min cycles    
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MCM Newsletter – Outlook for Week 2nd week of August

The market did pretty much nothing last week, moving in a very tight range and all inside the limits of the previous Thursday’s range, which we were mentioning last week as important. This sideways move is likely to precede a strong move and it remains to be seen if that will be up or down. From an EWT standpoint this can be either a wave 2/B (part of a move lower) or a wave 4 (part of an up move). I believe the bullish option is favorite, but technically both are possible. The range from the last ATH day (7/27) are still important and good lines in the sand.

No change on the weekly cycles. Directionality didn’t make it to the max level yet, but it is still moving up.

Weekly Cycles

The daily cycles managed to break above resistances. ES in a rather shy manner, but YM did this in a more convincing manner, already confirming a new up impulse. This is a serious warning for bears since another long leg up could ensue. Most likely a back-test of the breakout will come soon and that back-test is all important. If it holds, then bears need to sit on the sidelines for a while; if it fails and market drops back below the resistance level, then the up momentum will be negated.

Daily Cycles

The 288 and 480min cycles    
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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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