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Pushing Towards a Cliff Around 12th/14th – Daily & Weekly MSP

Lots of cross currents and chop. Increasingly poor/aberrant behavior in markets seems to be pushing us into the 12th to 14th cliff discussed in the longer-term market structure projections. All outcomes point to a combustible situation. One of the things to look for is when markets disconnect from structured behavior as this usually indicates a forced changes to market participant behaviors that later turns into a larger market impact. Recently we have had a few days in which daily directional  probabilities were contradicted, they very likely point to this exact type of situation.

One note, if one wished to take the time to review posts and articles here, you can see that even on the day's where daily probabilities were contradicted in MOST everycase, intraday probabilities gave that clue very early and clearly. (The Grid View is great for this and has fast search tools keys at the top of the page) Additionally, e-Tick-Tools emotion analysis made even the most difficult days to understand much clearer. Yesterday, for instance, there was an X-Tick on the opening bar indicating buy capitulation. And at the lows there were a cluster of sell extremes and a capitulatory X-Tick at around  2051 and 12:00 PM...and Accumulation Index (also a form of efficiency and emotion analysis) closed at the high of the day...which have so far led nicely to today's follow on upward movement.

So far this week, market structure has reverted somewhat as discussed below. Looks like a lot of volatility is on deck into next week with a potentially large move up into the week of the 12th to 14th. Additionally, generally, July 4th weekend puts a pause in things. Both this week and next week - momentum peaks on Wed and turns down into the end of the week. This Friday is not projected to be a high volatility day in terms or downside. We will see.

Good luck out there and be careful...longer-term timing approaching. Though this is a dangerous market, it's very easy to get overly bearish (or bullish even) and get chopped up.

July 1st, 2015 Daily & Weekly Market Structure Projections

July 1st, 2015 Daily & Weekly Market Structure Projections

Review of Yesterday & MSP Intraday Today

Yesterday's daily market structure probabilities favored a low in the morning 3:00 AM to 6:00 AM and then a significant change in bias from down to up on a daily basis. For us, daily in this case means morning to morning NOT close to close. The low from the Friday-Monday Session occurred at the 5:15 PM Friday futures close. So, from a trading hours perspective - which is how MSP works, we were around 9 hours early. This is more than normal. However, when is known that a significant change is approaching preparedness is warranted, and we were prepared. So, in that regard no significant retest of the Friday low into the AM hours Monday closed the window on downward probabilities and turned to the upside around 3:00 AM.

Interestingly, the most bearish possibility yesterday would have been if a 7:00 AM high were to have occurred and held. However, this was NOT the favored market structure. As 12:00 pm high was the highest probability, and it occurred within 30 minutes. From there, a 3:3o PM cash session low was implied as highest probability, and this also occurred within 30 minutes.

All in all, it is hard to be more accurate. Additionally, however, e-Tick-Tools and Gap-Tools further refined the cash open, indicating very low probabilities of gap fill and high probabilities of a break upward out of the opening range with stop runs triggering against short position - which was met.

Today, a 5:30 am Low would favor outcomes of a 1:00 pm high with pullback/consolidation into the afternoon and close. Probabilities for a negative cash session are not favorable (does not rule "down" out but odds are not favoring). They would best be supported with a 6:00 am high, and that does not appear to be likely.

June 23th, 2015 Intraday Market Structure Projections

June 23th, 2015 Intraday Market Structure Projections

Daily Bias Positive into Wednesday

Worked on a few small coding issues until 5:00 am yesterday. One small little small rendering bug I thought would take only 2 or 3 hours to fix took 17 hours on a Sunday. Late getting to the charts. One thing that is interesting is that today's action is exactly of the type I have been concerned about.

Friday's weakness was structural IMO and, therefore, more related to normal market structure and expiration than people would want to think. Headlines are always more compelling.

This week overall is fairly upside biased into Wednesday. Monday's low came very early. Earlier than expected. Ideally, a retest of the Friday low would have been most probable. Last night, however, all probable overnight MSP, were upward biased as of the morning with action around 7:00 AM and 12:00 pm being key timing.

Anecdotally, my view has been for quite some time that the negative reaction could come with exhaustion on a positive news announcement and resolution. Projections are indicating a bias upwards into Wednesday overnight. NOT certain if projections are corroborating this type of squeeze, but its does seem that any rise could be Greece related and part of a general squeeze.

Monday CASH sessions are among the weakest of the week presently.  A strong open could pull back pretty well after seeing a 7:00 am or 12 :00 pm high with pullback continuing into timing window around 3:30 pm. Tues and Wed continue upward bias probabilities this week.

June 22th, 2015 Daily & Weekly Market Structure Projections

June 22th, 2015 Daily & Weekly Market Structure Projections

June 22th, 2015 Intraday Market Structure Projections

June 22th, 2015 Intraday Market Structure Projections

Today Could Get Interesting

Friday "Cash Session" activity is biased towards weakness out of an AM session high. The best case probabilities are not strongly bullish. If market makes a lower high around 9:00 am then probabilities dramatically skew towards negative for the intraday session. The positive case is a choppy session with a 10 to 10:30 AM high. A pre 6 AM high strongly increases weak market structure projections.

One thing to keep in mind is that daily MSP (Posted yesterday)  is also downward bias from today's AM session into Monday. I use these tools as an edge, IF the market does not produce a recognizable market structure fingerprint with its AM behavior today's edge is compromised. A bimodal switch to adjust: If market makes new highs much past 6:00 AM then there are increased probabilities for upward biased market structure. This would have probabilities favoring a choppy day session with a high around 10:30 AM. So to reiterate: final cue that downside today would be improbable would be if market is at the AM highs into 9:00 AM. Then market structure projections edge is not clear because there are NO highly probable upside structures today.

June 19th, 2015 Intraday Market Structure Projections

June 19th, 2015 Intraday Market Structure Projections

S&P500 Cash Levels of Consequence

Technically, should have included this chart in the earlier posts. However, like to keep things compartmentalized and also was not sure about posting this. However, to the upside and downside these are key levels as calculated via our market symmetry and wave tools. Each support/resistance is labelled for number of times references were met as support | resistance and the normal reaction in points out of these areas. The implications are simple, a break of one level leads nearly directly to the next before stopping. This is true either to the upside or downside. The reason for posting this now is that there is a hole of thin support below and could be worth know about BEFORE or IF something were to break in EITHER direction.

June 16th, 2015 S&P500 Cash Levels

June 16th, 2015 S&P500 Cash Levels

Daily & Weekly Market Structure Projection Update Probabilities: DOWN

Below are updated daily and weekly market structure projections with extensive notes. There was an mcm Hindenburg Omen on Thursday last week in addition to highly weak performing bias for Friday and Monday. Comments regarding this potential were made on these pages though we were hoping to see market hold up into Friday or Monday. Using our tool set our adaptation for the market true directional probabilities were reassessed each day at around 4 to 5 AM and adjusted correctly for each day. Intraday, market structure has been behaving MUCH more reflective of a bear market tendency which is towards eccentric and unpredictable behavior during the cash session.

One comment regarding the potential for positive biases as NOT reflected as high for the near-term. There are lots of Elliott wave labels possible to indicate this or that upward structure. We find EW most helpful but within what fits in the probability skew of projections NOT in what looks pretty or entertaining. Though all market potentials should NEVER be dismissed, it is most common for a change in direction to drag along the previous mentality and preconceptions even for the best analysts. This is one reason that using probabilities reduces emotions. When the markets do something, not within the probability skew - the edge is compromised, and the next fractal for probability needs to be assessed as we have been doing on these pages. This process creates much less wasted energy or effort. Therefore, consider keeping analysis consistent and simplistic at market turning points where emotions, mental, macro analysis can lead to confusion and drag past behavioral expectations forward.

If the weekly market structure projections are correct, then we should start to see markets take on more traditional behavior during the cash session. Counter-intuitively is "up biased" for most of the cash session into 12 or 2:00 pm with large down moves overnight into the next cash session trapping bearish traders in the live session.

One note regarding what has the potential to become a larger change in character for the markets over the next weeks and months. This has been mentioned previously, but we will reiterate. There is a very high proportion of upwards price bias in strongly down trending markets. Most of the moves happen before the cash session and trap traders for 5 hours or so before relenting back towards downward potential into the close and in the single digit hours overnight.

June 16th, 2015 Daily & Weekly Market Structure Projections

June 16th, 2015 Daily & Weekly Market Structure Projections

For reference, we are including the last post for reference. As can be seen nothing changed in the chart and there was quite a lot of valuable data represented on it.

June 10th, 2015 Daily & Weekly Market Structure Projections (Previous Post Reference)

Live Versus Memorex: Today’s Bi-Modal Intraday Market Structure

Below is the reconciliation of today's real-time calls. From top down on our Weekly, Daily and finally on the Intraday (shown below) with added data from Emotion, Flow and Gap...there were significant and obvious elements that simply eliminated the low probability outcomes.

Bi-modal switching in action real vs analysis reconcilliaton

Bi-modal switching in action real vs analysis reconcilliaton

One note, regarding probability related a Hindenburg Omen. As mentioned in the AM post on the subject, normal Hindenburg Omen's are unreliable and in fact rarely useful. However, as the name implies, there is a tremendous romantic attraction for people to short them...which has the direct effect - even in the rare case that they do work - of going against these traders initially. Given that we got a MCM Hindenburg Omen, the implications are much more bearish than normal, however, the nature of the setup is still in play because of the proximity to standard Hindenburg's, which implies that the lowest possible risk entry is to look for the squeeze that usually occurs and also that the market flow data seems to anecdotally support as well.

A Look Inside this Market Move

A look inside the markets is in order. This is a tool called the MCM Market Ledger. It's comprised of some of the key component elements that creates the Accumulation Index. So, when one hears a mention of "Accumulation Index" this chart shows some color on the implications of that. We calculate very precise real-time cash flows and trade ticket analysis. This is an unprecedented view into the markets activity. Additionally, the Green line over price is the accumulated ledger cash flow into the market plotted for comparison to price. This line is showing a slightly higher swing high...and within a hair's breadth of making new all-time highs.

Always sensitive to capitulatory behavior. It pays to be on the look out for TOO much money going into the market in too short a time. The recent days have NOT shown a tendency towards this and instead would indicate that something is afoot...somebody is putting cash into the markets with some foresight and commitment would be my interpretation. These are certainly influences as to why, to this analyst, the markets have what seems to be a bit more work to do before starting their three months down cycle.

June 12th, 2015 MCM Market Ledger

June 12th, 2015 MCM Market Ledger

Intraday Timing & Comments

Charts will come later when I get back to workstation. Timing for today is for 10:30 AM and 1:30 PM. A 4:30 AM timing for a low was in play and that we met...which significantly increases the probabilities of a generally up biased day today. IF this low gets broken, then Friday probabilities move are negative. It is important to note that this Friday's range potential is the weakest of the week. In fact, Friday's have been one of the weakest days of the week. So, not expecting too much from today overall, but some upwards progress is the edge at this point into 1:30 PM. HOWEVER, we are reaching a point soon (as in day's to a week) where longer-term cycles top, market structure tops and resistance could be in. Market can implode anytime, as we fulfilled the basic market structure and almost all of the systems we monitor closed their long trades Wednesday at the close and Thursday at the open. They are usually early, which is another reason some further price progress is possible. But market is VERY FRAGILE and VERY DANGEROUS at this time and when it turns from these longer-term market structures its not likely to let many bulls out for quite some time.

The chart below is from around 4:00 AM - could not post it due to internet issues at my office.

June 12th, 2015 Intraday Market Structure Projections

June 12th, 2015 Intraday Market Structure Projections

We will be publishing the "IMAGINARY NUMBERS - Part 2" article this weekend and that should also help to put something things in perspective with regards to the quandary the market now finds itself. The data analysis and the article was MUCH more work than we intended...but what is worth doing is worth doing right. In our view, the data that will be presented should stun, shock or dismay just about anyone who sees it. This is of course, unless your name happens to be Bernanke. Important reading and apologize for the delay.

MCM Hindenburg Omen Triggered Yesterday

Had a bunch of charts to post this morning, but some internet connectivity problems that slowed things down to a crawl. Will post them later as am on another computer system.

The MCM Hindenburg Omen is NOT a noisy, unreliable entertainment vehicle that can be employed to sell subscriptions. It's funny, whenever the word Hindenburg is in any post - traffic for that post goes way up. However, Hindenburg Omens are wrong 19 out of 20 times and, therefore, actually useful as a buy signal most of the time. Our tool is much more relevant. It has been designed to produce reliable feedback that fulfills the stated but missed intention of a standard Hindenburg Omen. On the charts, you can see the standard ones marked in yellow and the MCM version marked in Red.

Support over the recent X-Tick held and it does look like the drama will extend over the weekend. Possibly into the Fed schedule early next week. So, the up biased daily market structure is still in play. But it is time to make sure seatbelts are close at hand.

June 12th, 2015 Hindenburg Omen

June 12th, 2015 Hindenburg Omen